Gov. Brown signs bill that limits seizure of assets of many Medi-Cal recipients

Jerry Brown on Monday signed into law a bill that limits the state’s seizure of assets from the estates of low-income residents ages 55 to 64.

Beginning Jan. 1, 2017, California will join many other states in the country that only recover the costs of enrollees’ long-term care and related costs after they die.

“They can still come after me if I end up in a nursing home or need home care,” said the 64-year-old Richmond resident. “But other than that, the standard stuff I was so up in arms about will no longer exist. My home will go to my kids.”

The new law, signed as part of the 2016-17 state budget, also would prohibit recovery from the estate of a deceased Medi-Cal member who is survived by a spouse or registered domestic partner. And it prohibits estate recovery if a home is of “modest value” — with a fair market value of 50 percent or less of the average price of homes in the county where it’s is located.

Darling once labeled Brown “the Tin Man of California” with “no heart” after the governor vetoed a previous version of the bill in September 2014 over its costs. Yet Brown’s signing message at the time did not completely close the door on an issue that has riled many Medi-Cal recipients between 55 and 64 years.

Since 2014, millions of people joined Medicaid, called Medi-Cal in California, under a special provision in the nation’s new health care law that expanded the program to low-income adults ages 18 to 64 without children if they earn up to 138 percent of the federal poverty level.

In 2016, that amounts to $16,394 a year for an individual or $22,107 for a couple.

Many of the 735,000 California homeowners ages 55 to 64 who have been laid off and are now getting by on dwindling savings said they did not realize that signing up for the expanded health care program for the poor came with a catch: The state could recover a broad array of costs and assets — including homes — from Medi-Cal recipients 55 and older after they die.

The logic behind the rule is simple: It may be fair for low-income Americans to take advantage of the program, now expanded to 32 states under Obamacare, without having to sacrifice their home or other investments. But when they die, so the thinking goes, the government ought to get reimbursed for its contribution to their medical care.

The provision to dock the estates of older recipients didn’t start with Obamacare; it kicked in when Medicaid was signed into law by President Lyndon Johnson in 1965.

Then, the rule was originally optional and applied only to people 65 or older. But in 1993, the law was changed to require all states to recoup the expenses of long-term care for Medicaid recipients 55 or older. States also were given the option to recover all other Medicaid costs, and California jumped in.

Yet the fear of losing their homes to the state led many low-income Americans to shy away from the health plan of last resort.

Legislation introduced in early 2014 by state Sen. Ed Hernandez , D-West Covina, sought to limit Medi-Cal recovery only to what’s required under federal law: the cost of long-term care in nursing homes.

California Gov. Jerry Brown gestures to a chart showing the unpredictable capital gains revenues as he discusses his revised 2016-17 state budget plan

California Gov. Jerry Brown gestures to a chart showing the unpredictable capital gains revenues as he discusses his revised 2016-17 state budget plan released Friday, May 13, 2016, in Sacramento, Calif.(AP Photo/Rich Pedroncelli) (Rich Pedroncelli)

But in 2014, Brown’s budget advisers balked, warning him that California would lose $15 million annually in general fund revenues as a result.

The federal government is paying 100 percent of the cost for these newly eligible Medicaid recipients until 2017, and 90 percent starting in 2020. But Brown’s advisers feared the state couldn’t afford to cover the rest of the bill in 2020 without getting reimbursed by estates.

Brown’s advisers say that today’s $171 billion spending plan can now accommodate both the costs of Medi-Cal expansion to 3.5 million Californians, and the costs associated with the new law on estate recovery, estimated to cost the general fund $5.7 million in 2016-17 fiscal year, and $28.9 million annually thereafter.

“It is a huge victory that this year’s budget limits estate recovery so that people with modest family homes can pass it on to their children,” Hernandez said in a statement.

Still, Department of Finance spokesman H.D. Palmer cautioned that if budget circumstances change going forward the state would have to “revisit a whole host of issues.”

Contact Tracy Seipel at 408-920-5343. Follow her at


Starting Jan. 1, 2017, Medi-Cal will limit estate recovery to only what the federal government requires. It will:

Prohibit estate recovery for costs of Medi-Cal services other than long-term care services

Prohibit estate recovery for a deceased Medi-Cal member who is survived by a spouse or registered domestic partner.

Allow a hardship exemption from estate recovery for a home of modest value (fair market value is 50 percent or less of the average price of homes in the same county).

Source: California Department of Finance

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4 Ways Men and Women Approach Finance Differently by Maria Cornelius

Anyone familiar with John Gray’s Men Are from Mars, Women Are from Venus knows the premise that men and women communicate very differently. Perhaps this explains why most female investors prefer to work with a female adviser and most married women leave a male adviser after the husband dies. Starting with the first conversation, women want, need and deserve distinct treatment in financial advice.

Old-fashioned gender roles designate the man of the house as responsible for personal finances. That changed over the past few decades but, if you’re a woman, your adviser must understand the role money played in your early life. Another concern: Women constitute more than half of financial planning or investment clients, yet less than a quarter of certified financial planners are women.

As a wealth manager with a large female client base, I notice four differences in how men and women approach financial decisions:

Communication and learning styles. Eleanor Blayney’s Women’s Worth: Finding Your Financial Confidence points out that women and men absorb and process information differently. Fundamentally, women learn through interaction with others, neurologically wired to be social and seek out relationships.

Especially if you’re a woman, find an adviser you connect with on a personal level. Talking openly about what matters most to you helps your adviser create a plan to prioritize and achieve your financial goals.

I also find that even highly accomplished and intelligent women (with expertise outside finance) can feel uneasy amid complex projections and financial jargon. Most prefer an adviser who can find a way to communicate in plain English.

While male clients may be more interested in charts and graphs that illustrate a point, women may take to an adviser who can connect financial advice with real-life examples. Competitive terms possibly motivating to men, such as “beating the market,” may not persuade women as deeply.

Confidence. Although this is shifting slowly, women’s greatest financial challenge remains lack of confidence in decision-making. The 2013-14 Financial Experience and Behaviors Among Women Prudential Financial survey, for instance, finds that “while women are taking control of household finances, they are no more prepared to meet long-term financial goals than they were a decade ago.”

The previous year’s survey also found only 23% of female breadwinners describing themselves as “very well prepared” to make financial decisions (compared with 45% of male counterparts) and that women are twice as likely to describe themselves as financial beginners (15% of women, 7% of men).

Due to this lack of confidence or experience in financial matters, many women want education from an adviser — and asking professional advice from a man may actually intimidate them.

Risk. Women’s generally lower tolerance to financial risk often reflects this lack of confidence. Many women lean toward more-conservative investing since greater risk might lead to failure. Women are also more likely to view money in terms of security.

I see this in female clients holding large amounts of cash in money markets or bank accounts. Although intuitively they know that in the long run investing is far more beneficial, fear of making a bad decision and losing the money influences them more. Find an adviser to explain the effects of not keeping up with inflation and that you can invest conservatively for long-term goals in many ways.

Life expectancy. Conservative investing isn’t bad, but if you take too little risk early you may barely keep up with inflation and won’t accumulate as much over your lifetime — which will likely be longer than a man’s. Research shows that in the U.S. women live, on average, almost five years longer than men; more than 975,000 American women are widowed annually, according to the latest U.S. Census data. Widows are also more likely than widowers to suffer a drop in income after the death of a spouse; almost half (more than 48%) of poor elderly in the U.S. are widows. (Women are also more likely than men to take career breaks or work part time for a variety of reasons.)

Median age for new widowhood is 59, which, combined with a high divorce rate, means that most women bear sole responsibility for finances at some point.

Identifying an adviser who wants to do more than just manage your investment, one who listens to and understands your goals and priorities, educates you on important concepts and encourages you to ask questions can lead you to a greater security and focus on your own long-term goals.

Tip: Your advisor should love gardening. Invest like a girl. Talk your financial emotion with your financial advisor. Learn from the mistakes of your parents. Do not use your house as your retirement plan. Contact Connie Dello Buono for a team of financial advisors, and other experts. 408-854-1883 CA Life Lic 0G60621 in 50 US states.

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————–The following video “Dangers of Needs Based Planning” shows the common financial, “My financial plan will meet all of my needs.” The message of this videos is, how traditional planning, “Needs Analysis” forgets to focus on how the world is not a static place and individuals don’t have a “number”. Depicts that a financial plan is out of date as soon as it is printed and how The Living Balance Sheet philosophy does not set parameters and is ever changing, and helping individuals prepare for those unforeseen life events. Throughout this video it highlights how living by a set of parameters set out in a financial plan (e.g., rate of return, expected income in retirement, etc…) is not possible due to unexpected life events, changes in tax rates, or a higher tax bracket in retirement, etc…

The Living Balance Sheet® and the Living Balance Sheet® Logo are registered service marks of The Guardian Life Insurance Company of America (Guardian), New York, NY. The graphics and text used herein are the exclusive property of Guardian and protected under U.S. and International copyright laws. Guardian, its subsidiaries, agents or employees do not give tax or legal advice. © Copyright 2005-2011, The Guardian Life Insurance Company of America