SB 833: California Medi-Cal Estate Recovery Limits, Exemptions, and Waivers

California Medi-Cal estate recovery is the state’s process for seeking repayment, after a recipient’s death, for certain Medi-Cal benefits the person received during life. Since SB 833 took effect for deaths on or after January 1, 2017, the state can only recover long-term care costs, can only reach assets that pass through probate, and cannot file a claim at all if a spouse, registered domestic partner, minor child, or disabled child survives the recipient.¹

Whose Estate Can Be Pursued

Two groups of former Medi-Cal recipients are subject to estate recovery. The first is anyone who received covered services at age 55 or older. The second is a recipient of any age who was permanently living in a nursing facility or other medical institution and could not reasonably be expected to return home.¹

If you only received Medi-Cal before turning 55 and were never permanently institutionalized, the state has no estate recovery claim against you. These two categories match the federal minimum that every state must follow.² California used to go further and recover for all Medi-Cal services at any age; it no longer does.

Which Medi-Cal Costs Are Recoverable

For recipients 55 and older, the state can recover only three categories of spending:

Nursing facility care.
Home and community-based services, including those delivered through California’s waiver programs.
Hospital and prescription drug costs incurred while the person was in a nursing facility or receiving home and community-based services.²

That third category is the one that trips families up. A hospitalization that happens during a nursing facility stay is recoverable. A standalone hospital admission unrelated to long-term care is not. Ordinary outpatient care — regular doctor visits, routine prescriptions, lab work, typical emergency room trips — is off the table.

For permanently institutionalized recipients of any age, recovery is limited to costs directly tied to the institutional care itself.¹

When a claim letter arrives, read the itemization carefully. Errors happen, particularly when ordinary medical costs get mixed in with institutional charges.

Survivors Who Block Any Claim

Even when the recipient falls into a recoverable category, the Department of Health Care Services (DHCS) cannot pursue a claim if any of the following people are alive when the recipient dies:

A spouse or registered domestic partner.
A child under 21.
A child of any age who is blind or disabled under federal Social Security standards.¹

The spouse and domestic partner protection is permanent. DHCS cannot defer the claim and come back after the surviving spouse later dies.³ A surviving spouse at the moment of death ends the claim.

The child protections work proportionally. If a disabled child inherits part of the estate but other heirs without an exemption inherit the rest, the state can still pursue the non-exempt shares.

Which Assets Are Safe

DHCS can reach only the probate estate — the property that passes through court-supervised probate under a will or California’s intestacy rules. Assets that bypass probate are protected. The main planning tools:

Revocable living trusts. Property held in a properly funded trust passes to beneficiaries outside probate.
Joint tenancy with right of survivorship. The deceased joint tenant’s interest transfers automatically to the surviving joint tenant.
Transfer-on-death deeds. California allows a recorded, revocable TOD deed that moves real estate directly to a named beneficiary at death.¹

Before SB 833, California defined “estate” broadly enough to reach trust property, joint tenancy interests, and other non-probate transfers. The law now tracks the federal minimum, which is the probate estate alone. That single change is what makes most Medi-Cal planning in California work.

There is one real exception. For permanently institutionalized recipients, federal law lets the state place a lien on real property during the recipient’s lifetime.² That lien attaches to the property itself and must be satisfied before the property can pass free and clear, no matter what non-probate device would otherwise transfer it.

Hardship Waivers and the 60-Day Deadline

Even on a valid claim, DHCS must waive recovery in whole or in part if enforcing it would cause substantial hardship to the deceased’s dependents, heirs, or survivors. The statute is mandatory, not discretionary.³

The law specifically directs DHCS to waive its claim where the estate is a homestead of modest value, subject to federal approval. The statute does not fix a dollar threshold, leaving DHCS some room to interpret “modest value,” but the intent is that ordinary family homes should not be taken to satisfy Medi-Cal debts.

To request a waiver, submit the Application for Hardship Waiver (DHCS Form 6195) within 60 days of the date on the estate recovery claim letter. DHCS sends the application and instructions with the claim.⁴ If DHCS denies the waiver, you can appeal through an estate hearing, and DHCS must tell you about both options when it files the claim.¹

Miss the 60 days and you lose the most direct route to reducing the claim.

Finding Out What the State Could Claim

Current and former Medi-Cal recipients have the right to ask DHCS, once per calendar year, for the amount the state could potentially recover from their estate. The fee is capped at five dollars, and DHCS has 90 days from receiving the request and supporting documents to respond.³

You can submit the request online, by phone, by mail, or electronically through another method. An authorized representative can request it on your behalf. Getting a number while the recipient is alive is what makes real planning possible instead of guesswork.

Steps and Deadlines After Death

Whoever handles the estate must send written notice of death to the Director of DHCS within 90 days, with a copy of the death certificate.⁵

If a formal probate case is opened, DHCS must file its claim within the Probate Code’s creditor deadlines. A creditor generally has until the later of four months after letters of administration issue, or 60 days after receiving direct notice of the probate.⁶ A late claim is barred, though that is not reliable enough to plan around.

What SB 833 Does Not Change

Estate recovery still exists. If you received nursing facility care or home and community-based services after age 55 and your estate goes through probate without a protected survivor, the state will file a claim. Daily skilled nursing costs in California commonly run into the hundreds of dollars, so a stay of a few years can produce a six-figure bill.

The reforms do not reach back in time. Deaths before January 1, 2017 are governed by the older, broader recovery rules. And nothing in SB 833 displaces the federal lien authority against real property owned by permanently institutionalized recipients, which can attach during life regardless of how the estate is otherwise arranged.

1
California Legislative Information. California Welfare and Institutions Code 14009.5
2
Office of the Law Revision Counsel. 42 USC 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets
3
California Legislative Information. California Welfare and Institutions Code 14009.5
4
California Department of Health Care Services. Hardship Waiver Application
5
California Department of Health Care Services. Important Notice Regarding the Medi-Cal Estate Recovery Program for Beneficiaries 55 Years of Age or Older
6
California Legislative Information. California Probate Code 9100