No, at least if you are on MediCal–the California version of Medicaid–they cannot take your entire recovery. The law in California is that the most MediCal can take out of your recovery is 50% of your net.
So to give an example, let’s say you’re in an accident where the other person has $100,000 worth of insurance, and I recover that $100,000 for you, and let’s say that MediCal payed $400,000 for your treatment. MediCal is not going to take your entire $100,000. Under the California formula, if your lawyer takes a third, MediCal will take half of the remainder, so that you get $33,000, MediCal gets $33,000 and your lawyer charges $33,000.