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In the case of the Linfoots, the state went after the piece of dirt under a mobile home where an impoverished woman had spent years tending to her mother.
Unable to pay the money, Art and Gail Linfoot filed for a hardship waiver. State officials ignored the request and sent letters telling Art to pay up, always mentioning that interest was accruing at 9 percent. Only after Pat McGinnis of California Advocates for Nursing Home Reform wrote letters, attended hearings, and filed petitions did the state drop what turned out to be an invalid claim for the land.
"I had to spend hours of very precious time to fight $3,000 on a mobile home. I had to go to two hearings. They said they couldn't find my appeal. I send them a copy, and the woman representing the Attorney General's Office said I sent it after the fact. Can you imagine -- all of a sudden they "lose' my hearing appeal," says McGinnis. "I know they spent more than $3,000 to send that woman down from the AG's Office."
The state's zeal tends to be focused on the poorest heirs of the indigent elderly; the poor, after all, don't usually hire attorneys to advise them how to protect their assets from state seizure. Obtaining this protection is no big trick. It's usually just a matter of transferring the assets to heirs before a parent dies. But the state takes no steps to advise Medi-Cal recipients of these rights.
A pending lawsuit alleges that the state has been extracting money from survivors of Medi-Cal beneficiaries without any public guidelines on the procedures it uses.
In one case, the 78-year-old, disabled daughter of a deceased Medi-Cal beneficiary was talked into signing a "voluntary" lien on her home. The daughter had lived in the home for more than 10 years, providing in-home care to keep her mother out of a nursing home. The state filed an estate claim to recoup $14,000 paid to her under a state program that provides minimum wages to in-home care workers, including family members.
"The problem is that people who are elderly, poor, who cannot read or speak English, who do not know their rights, who were given misinformation by the Medi-Cal eligibility worker, or who simply can't afford to pay an attorney $200 per hour, tend not to transfer their homes during life," McGinnis, the nursing home activist, says. "If you know your rights and can afford to hire an attorney to do estate planning, you won't end up with an estate claim. All of my cases are against retired people on fixed incomes, poor people whose only asset is the home their parents left to them, or non-English-speaking people who didn't know their rights."
The state has already lost three lawsuits that claimed it had illegally filed estate recovery claims. The suits resulted in permanent injunctions against the state and millions of dollars in reimbursements and attorneys' fees.
Vivian Able, acting chief of the state's Department of Health Services Third Party Liability Branch, says that, in response to the 1999 federal review, California has decided to make more efforts to inform Medi-Cal recipients about the state's asset recovery program.
So will the state work on doing a better job informing the heirs, who are the actual victims of the abuses described in the federal report? Will the state agency make a habit of telling family members that, unless they transfer property out of the Medi-Cal beneficiary's name, they stand to lose it?
"We have no obligation to tell the heirs," Able says. Besides, she adds, "We don't know who the heirs are. When a beneficiary dies and we initiate an applicant package -- we don't have their names, there's no way for us to have that information."
Presumably, asking the Medi-Cal beneficiaries who their heirs are is beyond the state's capabilities.
In San Francisco the pain of a state Medi-Cal asset seizure can be especially great, given that Laguna Honda Hospital, the city's most prominent facility serving the indigent elderly, is reimbursed by the state at twice the rate of ordinary nursing homes. Because Laguna Honda has facilities providing acute medical care, it is able to charge the state $6,500 per month per patient, more than twice the $2,700 charged by ordinary private nursing homes.
So this means that May Stubblefield, a former 25-cent-an-hour railway worker, a daughter of slaves who dreamed of bequeathing her children her Western Addition home, could have been held to owe the Department of Health Services $340,000 when she died. The house she'd hoped to leave to her kids was worth $360,000 at the time.
"This was the only thing she had in her whole life. She'd worked her whole life for this house, and she really wanted to give it to her grandchildren," says Elizabeth Arnold, attorney to Mary Stubblefield, May's daughter.
The state eventually settled for $130,000; the house eventually sold for $410,000. So the Stubblefields came out OK.
And with McGinnis' help, Art Linfoot finally got the state to back off. His sister and her children have a place to stay, and they've got the land.
Linfoot's still angry, though.
"They are beating up the poor, and there are other people in our area who have been pressured into paying," Linfoot says.