State reaches into grave for funds

When his days run out, Leonard Ratzman of Bellflower will go into the ground with very little to his name. But, as the 74-year-old retiree recently discovered, that won’t keep state agents from burrowing six feet under and rifling through his pockets.

“Every penny paid to medical institutions since I was 55 and until my death must be paid back to the state out of my estate when I pass away,” Ratzman alerted me in an e-mail that he wrote after reading a notice from the Medi-Cal Estate Recovery Program.

This “leaves me speechless,” said the retired computer analyst, a widower with a daughter who lives in Corona. If he was poor enough to qualify for Medi-Cal, he asked, why would the state think his estate had the funds to cover years’ worth of medical bills?

Ratzman was under the impression that Medi-Cal was a benefit, not a loan. And as he saw it, he had more or less earned the benefit through 40 years of working and paying taxes.

Then came the notice in the mail, and up went his blood pressure. Would the state try to get its grubby paws on the small life insurance policy he took out to cover his burial costs so his daughter doesn’t get stuck with the bill?

“Estate is defined as any real or personal property owned by the Medi-Cal beneficiary,” said the form letter from Sacramento. It ended with instructions for Ratzman to “please share this notice with family members,” so they’ll know he’s still on the hook even in death.

If the policy was news to Ratzman, it was news to me as well. But a quick couple of phone calls revealed that sure enough, if Medi-Cal reimburses a doctor, clinic or hospital for medical treatment of one of its recipients from the age of 55 on, it wants that money back when the patient is dead and gone.

Ratzman wondered if I could write about it, in case many of the 6.6 million Medi-Cal members were in the dark, just as he was. So I drove down to Bellflower to meet him.

Ratzman, who has a much thicker head of hair than I do, doesn’t appear quite ready to shuffle off this mortal coil. He had some bounce in his step as he greeted me at the door of his nothing-special town house, which he has rented for 27 years. An old photo of his family is on the living room coffee table, but his wife died of cancer many years ago at the age of 33, and then one of his two daughters died of cancer, also at age 33.

We sat at the kitchen table, where Ratzman had all his paperwork spread out, including copies of a letter to state and U.S. officials asking them to explain “what appears to be an illogical, unfair . . . state policy.”

Ratzman said he was advised to sign up for Medi-Cal about five years ago to supplement his Medicare coverage and a very limited Kaiser plan left over from his last job. He takes the blame for not reading the fine print on the estate recovery program at the time he enrolled, but who can blame him?

The U.S. healthcare system is a mind-numbingly aggravating, incomprehensible mess thanks to political abdication and corporate profiteering, and the fact that a 74-year-old man has to juggle three complicated plans is but one of many affronts to logic and civility.

For all his frustration over his estate recovery notice from Medi-Cal, Ratzman told me he hasn’t even used the coverage because his monthly deductible is $1,100. Yes, that’s his monthly deductible.

Given his annual Social Security and pension income of $20,000 a year, there’s no way he can afford that much in deductibles. Ratzman would have trouble surviving, he said, if not for the loan he took out against his one asset: a 1980 Corvette. Selling the car would pay back the loan, but then he’d be broke and without transportation.

I told Ratzman I’d see if I could find out more and get back to him, so the next day I called Stan Rothstein, chief deputy at the state Department of Health Services.

Medi-Cal is a state and federal program designed as a safety net for the poorest Californians, Rothstein said. You must have less than $3,000 in assets to qualify, and your house, your car and your wedding ring are not figured into the total.

Rothstein said the policy actually benefits older Californians who’ve hit hard times, allowing them access to government-supported healthcare even if they own homes. But why should the state be paying the bills for somebody who may be sitting on a big chunk of equity? Upon death, if no spouse is still in the house, the state will put a lien on the property to get reimbursed for its Medi-Cal payouts. Each year, Rothstein said, the state collects about $70 million that way.

Why stop at dunning seniors? Why not garnish the future wages of poor children enrolled in Medi-Cal?

As for Ratzman’s contention that he already paid enough in taxes during his career and shouldn’t be double-taxed in death, Rothstein said Medi-Cal doesn’t operate as an entitlement the way Medicare does.

Rothstein said there are two reasons Ratzman should hold onto his Medi-Cal membership, even though he can’t afford the deductibles.

One is that Medi-Cal pays his $80 monthly Medicare premium, and the other is that if he ever ends up in a nursing home, Medi-Cal will cover the costs but Medicare won’t.

Rothstein said it doesn’t sound like Ratzman is the kind of person the state will chase beyond the grave.

“I don’t think this gentleman has anything to worry about,” he said.

Maybe not, but like I said, Ratzman’s confusion is a symptom of a sick healthcare system.

With 47 million people uninsured, healthcare lobbyists bankrolling political campaigns and a debate underway over a White House proposal that could reduce the number of poor children with coverage, the obvious fix is ever more clear:

A single-payer system that covers everyone, keeps private and public service options in place, streamlines care and gets the profiteering out of medicine.

No comment on that, Rothstein said. That’s for the politicians to deal with.

Yeah. Don’t we know it.

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steve.lopez@latimes.com