For Caregivers, Bill Hits Home

Susan Gollas inherited her family’s farm in Sacramento County when her father died, recompense for the 13 years she cared for him while his health deteriorated.

Seven months later, Gollas opened her mail to find a bill for $120,000 from the state to repay Medi-Cal for subsidizing her father’s final two years in a nursing home.

Dorothy Muscari’s mother, deaf and mute, begged her to move west from Illinois after Muscari’s father died in 1963. The two women bought a house together in Salinas.

When her mother died more than 30 years later, Muscari got stuck with a $48,000 state claim for three years of nursing home care.

Gollas, 37, and Muscari, 71, made the same mistake: not gaining full possession of the homes before their parents died--a process that can be as simple as filling out a job application.

When Medi-Cal recipients die, their homes are considered assets against which costs of care can be collected. Now, for the second year in a row, a state legislator is trying to exempt people like Gollas and Muscari--as a majority of states do--because they save California money by keeping their ailing parents out of nursing homes as long as possible.

SB 1032 by state Sen. Teresa Hughes (D-Inglewood) would grant exemptions to those who lived with a parent and provided care for at least two years.

It also would exempt siblings who lived with a patient for a year and would require the state to create consistent criteria for granting hardship waivers to heirs who are poor, old or unemployed.

At least 30,000 Medi-Cal estate claims are pending before the state Department of Health Services, and cases involving 181 unpaid bills have been referred to the state attorney general for prosecution.

So far, the state has not weighed in on Hughes’ legislation, but last year officials opposed a similar bill. Health department spokesman Ken August said that until Gov. Gray Davis appoints a new health director, no formal position is likely to be taken on recovery practices, which he estimated brought in $35 million during the past year.

But in its denial of Gollas’ request for a waiver, the department made its position clear: Medi-Cal services, in essence, are a loan.

“The Medi-Cal program is not insurance, it is a welfare program,” wrote the hearing officer. “To maximize benefits to the largest numbers of needy people . . . the law requires the state to recover amounts paid from the estates of deceased beneficiaries.”

Soon after November’s election, advocates for the elderly raised the issue of caregiver exemptions at a meeting with newly elected Atty. Gen. Bill Lockyer. But his office took no action on the issue.

Lockyer declined to comment, on the grounds that the health department sets the policy. “We’re just the lawyers,” said his spokeswoman, Sandra Michioku.

Are some of the targeted heirs cheaters? No doubt. But some speak little English, many are poor and few were aware of the 1995 change in law that invited the state claims department into their lives.

“The only people who end up getting screwed under this system are poor people; people who don’t know what their rights are,” said Pat McGinnis, executive director of California Advocates for Nursing Home Reform.

In 1993, the federal budget act required states to seek repayment of the cost of nursing home care that is financed through Medicaid--called Medi-Cal in California--and that is issued to those with assets of less than $2,000, excluding their homes, cars, wedding rings and burial expenses.

Under federal law, states that use property liens to pursue recovery claims also must provide exemptions, including one for sons and daughters who moved in with their parents to take care of them.

For more than a decade, California had its own recovery program that routinely exempted offspring. But after 1995, when state officials stopped using a lien process, they did away with the exemptions too.

A federal Medicaid official in Baltimore said he believes California to be the only state that both aggressively pursues estate claims and does not excuse caregivers from payment.

“It’s not really rational,” because the caregivers save the government money “at the front end,” said the official, who spoke on condition of anonymity.

Medi-Cal routinely files claims when a recipient dies, but some people do obtain a state waiver on appeal. Last year, about 400 waiver requests were submitted and 44 were granted for a variety of reasons.

Bill Stritzel moved in with his mother in 1975, soon after his father died. She was losing her eyesight and suffered several strokes, but spent just a few days in a nursing home before she died 19 years later.

When Stritzel, now 49, received a $13,600 bill from the state, he fought it. After three years and nearly $5,000 in legal fees, he got the state to withdraw its claim--although he was never able to find out why.

Waiver decisions often appear to be a matter of how the hairs are split. In Oakland, a disabled man who cared for his grandmother for 22 years had his waiver request denied because state law allows disabled children--but not grandchildren--to keep their dead parents’ homes.

In Gollas’ case, Sacramento attorney Catherine Hughes expected to beat the state through an exemption for family farms. But an administrative law judge turned down the appeal because Gollas had leased out the farmland in 1998 to pay her property taxes.

Gollas was still a teenager when her mother died of cancer, leaving her diabetic father, Sadao Norita, with no one to care for him. She and her sister stepped in and, when Norita took a turn for the worse in 1990, Gollas moved her own young family into the farmhouse near the tiny town of Freeport.

Increasingly, Norita needed full-time care. Gollas and her husband, Mario, provided it--cooking for him, driving him to the doctor, carrying him to the bathroom.

As Norita’s savings and Medicare funds ran out at the end of 1993, doctors told him to apply for Medi-Cal. Mario Gollas said the eligibility worker told him they would not risk losing the farm “as long as we lived there.”

In 1995, Norita entered a nursing home. He died there in April 1997, leaving Susan Gollas his only significant possession: a rundown stucco home on 20 acres of farmland, appraised at $200,000.

When Gollas got the state bill months later, she talked to one attorney, then another, sure a mistake had been made. With a monthly income of $1,600 from Mario’s work in a rice mill and $1,400 in monthly expenses, they could not pay the $120,000 bill.

Attorney Hughes filed an appeal. Gollas’ years of full-time care were worth more than the claim, Hughes told the state, and the family would be forced onto public assistance if they had to sell the farm.

None of that information swayed the hearing officer, who denied the appeal Jan. 6 on grounds that the Gollases’ income exceeds their expenses and that the value of the property exceeds the amount of the claim. Gollas, who has three children, including a 3-year-old, could find work, the state suggested.

Susan Gollas remains philosophical, preparing to plant corn this year while hoping that the Hughes legislation will pass and prevent the state from taking her case further.

If the bill does pass, the exemptions would come too late for Dorothy Muscari, who gave up and refinanced her Salinas home to pay the state a year ago.

She and her husband, Peter, are both retired and on fixed incomes, so the near tripling of their mortgage payment overnight--from $237 to $613--has been devastating.

They got into the bind because 26 years ago they put Muscari’s mother’s name on the deed for the large house they built to accommodate all of them. It was both recognition of the $5,000 her mother put toward the down payment and security that, if something happened to Muscari, her mother would not be homeless.

The home cost $30,000 and is now worth more than $200,000, but that appreciation happened under Muscari’s meticulous watch. She and her husband made all the mortgage payments while depleting their savings paying for many of her mother’s living and medical costs, according to the 300 pages of documents in their appeal.

Muscari had sought legal advice before she helped her mother apply for Medi-Cal in 1992, on the eve of admitting her to a nursing home that cost $3,000 a month. Attorneys said that because she had cared for her mother for years, the house would be safe. Only after her mother’s 1995 death did Muscari discover that the law had changed.

When the state rejected her claim, Muscari considered filing a lawsuit. But she panicked over the 9% interest accruing on the state bills sent regularly to her home.

“First it was $48,000, then it was up to $58,000,” she said. “I thought, ‘Oh, my God. I will never get out of this hole.’ ”