Have you ever wondered how you would pay for long-term nursing home care (at a cost of $350 to $500 a day or more)?  Medicaid, also known as MassHealth in Massachusetts, pays for nursing home care for those who do not have assets to pay for their care.  An individual applicant can have no more than $2,000 of countable assets to qualify for Medicaid benefits.  A married individual’s spouse who lives in the community may own up to approximately $120,000 of countable assets.  The home of a Medicaid applicant is considered a non-countable asset, and may be owned by an individual, or a married couple, without impacting eligibility.

Under current law, if a Massachusetts resident over the age of 55 receives Medicaid benefits, whether for care in the community or to pay nursing home costs, the Commonwealth may recover those costs from the recipient’s probate estate at death.  This is called “estate recovery.”  Probate assets do not include assets that are owned jointly with another person, or are owned by a trust, or a home in which the Medicaid recipient may have a life estate interest.

Governor Baker’s Fiscal Year 2017 budget includes a proposal that would expand estate recovery to allow Medicaid claims to be made against any asset in which the deceased owned an interest at the time of death.  This would include jointly held bank accounts, real estate owned jointly by the deceased and the surviving spouse, and real estate in which the deceased owned a life estate interest or which was held in an irrevocable trust. This proposal is a serious and significant departure from previously settled Medicaid law and will have wide-ranging impact on surviving spouses and families of Medicaid recipients.  The proposed law would apply to any Medicaid recipient who becomes eligible for benefits after July 1, 2016, even if planning was done years ago.

Governor Romney made a similar proposal in 2003, which was enacted but repealed a year later after attempted implementation resulted in recognition that the law was seriously flawed and had significant unintended consequences.  More recently, New York State had a similar experience.  For more information about this proposal and how to reach out to your state legislators to register your objection, visit our Proposed Changes to MassHealth Estate Recovery Rules page.