Under federal Medicaid rules, Medi-Cal expenditures for individuals in institutional settings and those aged 55 and older are subject to what?

The correct answer is asset recovery. Under federal Medicaid rules, states have the authority to recoup costs incurred for long-term care services provided to individuals aged 55 and older, especially when these individuals receive care in institutional settings. This process is known as "estate recovery," and it is designed to ensure that Medicaid funds are paid back to the state from the estate of the deceased beneficiary after their death.

The rationale behind asset recovery is to minimize the financial burden on taxpayers by allowing states to recover costs for services provided to individuals who utilized Medicaid benefits. This means that if a beneficiary has assets or an estate after passing away, the state can pursue recovery efforts to reclaim some or all of the expenditures made on their behalf.

Other options, while related to financial considerations in Medicaid, do not accurately describe the process for recovery of expenditure in this specific context. Income recovery refers to seeking repayment from a person's income rather than their estate, benefit adjustment doesn't necessarily convey the idea of recovery in the context of expenditures, and cost recovery is a broader term that may not specifically address the recovery of assets related to Medi-Cal expenditures for institutionalized individuals.