They're already on the hook for all the care of the body since she died up to the point where the body was released to the Alameda County Coroner, as well as all the legal bills. I doubt any insurance would have paid for all this, and Medi-Cal certainly wouldn't have.
Children's Hospital Oakland actually loses money every year, and all these bills make that bottom line worse. Most of their patients are either indigent or on Medi-Cal. They've had issues after Stanford's Lucille Packard Children's Hospital set up a clinic in Emeryville, claiming that it would siphon off paying or well-insured patients who might not want to take their kids to CHO because of their patient base. I've been at various hospitals where I sensed being around poorer patients, including CHO. If you've ever spent time around a hospital (especially an emergency room) it's pretty easy to see people who are uncouth, using poor grammar, and act belligerent with the hospital staff. While it is a different experience, there are some who might seek another option because it can be unpleasant. We took our kid to CHO once, and while we were well-insured, they have a policy that they don't turn away anyone.