Medicaid

Medicaid (MassHealth) Estate Recovery Recent Updates

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Did you know that Medicaid (MassHealth) is entitled to reimbursement from your probate estate after your death if you received benefits to cover your long-term health care expenses in a skilled nursing facility during your lifetime? Medicaid recently updated the regulations regarding estate recovery, which attorneys from the Massachusetts chapter of the National Academy of Elder Law Attorneys (MassNAELA) discuss in this short video. Watch here.
To learn more about these recent estate recovery updates, you are invited to register and attend MassNAELA’s webinar on Wednesday, July 28, 2021 at 10:00 a.m. Registration link here.
**Last Chance to register to attend our Smart Counsel webinar about this summer’s hot real estate market with Attorney Suzanne Sayward and a panel of realtors on
Thursday, July 22, 2021 from 6:00 p.m.-7:30 p.m.
Join us to learn tips and tricks for buyers and sellers. Attendees will have the opportunity to ask questions.
Contact Victoria Ung at 781-461-1020 or ung@ssbllc.com to reserve a spot for you and a friend.  The program is free but registration is required.

 

What Happens After the Death of a Person Who Received Medicaid Benefits?

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Medicaid, also known as MassHealth, is the joint federal and state program that provides public benefits to pay for the care of individuals who are medically and financially eligible because they do not have sufficient assets to cover the costs themselves.  If the individual was age 55 years or older and received MassHealth benefits during his or her lifetime, the MassHealth Estate Recovery Unit (“ERU”) is responsible for collecting reimbursement for the costs paid by the Commonwealth.  Reimbursement comes from the deceased person’s probate estate. Under Massachusetts law, the ERU must be notified when probate pleadings are filed with the probate court. Thereafter, the ERU files a claim against the probate estate to reserve the right to be paid from the estate. As the recipient’s house is typically the largest asset remaining to be probated, the ERU is often reimbursed from its sale proceeds.

A recent decision by the Supreme Judicial Court of the Commonwealth of Massachusetts highlights the importance of understanding what happens when a person who has received Medicaid benefits during his or her lifetime passes away.  In the Estate of Jaqueline Ann Kendall (SJC-12881, December 28, 2020), the Supreme Judicial Court held that the Commonwealth was not entitled to reimbursement from Ms. Kendall’s probate estate (consisting of 50% ownership of a house) because the ERU waited too long to file its claim.  While it may seem that the decision favors procrastination for families whose loved ones were MassHealth recipients, this is not necessarily the case. The ERU is permitted under the law to file probate pleadings if no one else steps forward, and may become more aggressive in doing so following the Kendall case.  

A better strategy for protecting your assets from nursing home costs is to be proactive and undertake long-term care planning.  This may mean conveying property subject to a retained life estate, or crafting a so-called “Medicaid Trust” or “Irrevocable Income Only Trust”, or other options that best fit your needs and goals.   

At Samuel, Sayward & Baler LLC, an elder care attorney knowledgeable in long-term care planning will guide you through the advantages and disadvantages of your long-term care planning options. Our estate planning attorneys can help you to avoid probating your house and the subsequent MassHealth claim, and preserve its value for the benefit of your children, in the event you require MassHealth benefits during your lifetime.

Attorney Abigail V. Poole is an associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of trust and estate planning, estate settlement and elder law matters. She is an active member and current Vice President of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA).  This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781/461-1020. 

January, 2021

© 2021 Samuel, Sayward & Baler LLC

 

Five More Important Numbers to Know When Applying for Long-Term Care Medicaid Benefits

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Back in December, I wrote about in the event you require Medicaid (MassHealth) benefits to pay for long-term nursing home care expenses. To remind you, Medicaid is a federal/state government health care benefits program available to those who meet its medical and financial eligibility rules.  Here are five more important numbers to keep in mind if you are applying for long-term care Medicaid benefits in Massachusetts.

  1. An Account with $1,500 for Burial or Funeral Expenses is a Non-Countable Asset.

As you are preparing to apply for MassHealth benefits you may “spend down” your assets in certain ways and still qualify.  One way of spending down your assets is converting countable assets into non-countable assets. For example, MassHealth permits you to have a separate bank account of up to $1,500 for funeral and burial expenses.   This is in addition to the $2,000 a single person is permitted to own to qualify for MassHealth benefits. For example, let’s say you have a checking account with a balance of $3,500, which results in your ineligibility because you are over the $2,000 limit. Now let’s say you open a burial and funeral expenses account and deposit $1,500 into it. As you have only $2,000 remaining in your checking account you now meet the financial eligibility requirements to receive MassHealth benefits, and, bonus, you have put aside funds to assist with expenses after your death.  This account is in addition to any prepaid irrevocable funeral arrangements you may make.

  1. Your Principal Residence’s Equity Up to $893,000 is a Non-Countable Asset (for 2020).

Is my home considered a non-countable asset for Medicaid? If your principal residence is located in Massachusetts and your equity interest in the residence does not exceed $893,000 (for 2020), then it will be considered a non-countable asset for Medicaid benefits eligibility purposes. This equity interest amount typically changes each year. If your equity interest in your home is greater than that amount, it may cause you to be ineligible for Medicaid benefits, and you may need to sell your home or spend down the equity prior to or while your eligibility for Medicaid benefits is determined. However, if you make a good faith effort to sell your home Medicaid may exempt it from being countable for a period of nine (9) months, which time period may be extended.  Further, MassHealth may waive the period of ineligibility due to your home’s excess equity if it may cause undue hardship.

Let’s say your home has a tax-assessed value of $1,000,000 and you own it free and clear.  In that case, MassHealth would consider you ineligible for benefits because your home equity exceeds $893,000. Now let’s say you have a $250,000 mortgage on your $1 million home resulting in the equity interest in your home being $750,000. You are eligible for MassHealth benefits. Note that your home may be a non-countable asset immediately, regardless of your equity interest in it, if your spouse resides with you, or you have a child who is under age 21 or blind or permanently disabled, a sibling with ownership interest, or an adult child who is taking care of you and meets specific requirements residing with you. There are other things to know about Medicaid benefits for seniors and your home that are discussed here.

  1. You May Keep $72.80 of Monthly Income as Your Personal-Needs Allowance (PNA).

In general, your monthly income will be paid to the nursing home (the “Patient Paid Amount”) once you begin to receive MassHealth benefits, with some permissible deductions.  One permissible deduction is the Personal-Needs Allowance of $72.80, which amount has not changed in several years. You are permitted to keep the Personal-Needs Allowance in Massachusetts (PNA) to be used for any personal expenses not covered by Medicaid. You can pay for clothing, salon visits, etc. from your PNA account.

Other typical permissible deductions from income are health or medical insurance premiums and support for children, parents, siblings or your spouse remaining at home who meet certain criteria.

  1. 4 to 6 Months (or Longer) from MassHealth Application Submission to Approval.

It can take a few months to prepare a MassHealth application and gather the information you need to submit along with the application.  Once you have submitted the application and documentation to MassHealth it may take 4 to 6 months, or longer depending on your circumstances, to obtain approval to begin receiving Medicaid benefits.  During that time period you will receive correspondence from MassHealth requesting additional information to be provided to them.  The initial determination you receive from MassHealth on your application may be favorable or unfavorable.  If the determination is unfavorable an appeal may be filed with the Board of Hearings.

  1. There Are 26 Aging Services Access Points (ASAPs) in Massachusetts.

Aging Services Access Points (ASAPs) are private, non-profit agencies that contract with the Executive Office of Elder Affairs and cover 26 separate geographical regions in Massachusetts. They provide home care services, investigate elder abuse and assist with health insurance benefits, including Medicare inquiries and MassHealth applications. The local ASAP is Health and Social Services Consortium, Inc. (HESSCO) which covers the towns of Canton, Dedham, Foxborough, Medfield, Millis, Norfolk, Norwood, Plainville, Sharon, Walpole, Westwood and Wrentham.  Although ASAPs are a great source of information, it is always best to consult with an experienced elder law attorney before having anyone prepare a MassHealth application on your behalf, to ensure you are receiving appropriate advice about the timing of the submission of the application as well as any planning steps you may wish to take to achieve eligibility.  In many cases, having an elder care or long-term care attorney prepare the application will be in your best interest, and give you the greatest chance of success.

Meeting the financial eligibility criteria to receive Medicaid benefits to pay for long-term nursing home care expenses can be confusing and difficult depending on your assets, health and family relationships. An experienced long-term care and elder law attorney can assist you with advance planning to preserve your assets, address your questions and concerns, and prepare you and your family to navigate the eligibility process.

Attorney Abigail V. Poole is an associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. She is an active member of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA).  This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781/461-1020. 

March, 2020

© 2020 Samuel, Sayward & Baler LLC

Five Important Numbers to Know for Long-Term Medicaid Benefits

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“What happens if I need long-term care in a nursing home and I can’t afford to pay for it?” I hear this question frequently from clients who are concerned about long-term care because the cost of nursing home care is so high. In Massachusetts, nursing home care costs anywhere from $11,000 to $17,000 per month ($132,000 to $204,000 per year) and continues to increase regularly. The short answer is Medicaid (MassHealth), a joint federal/state government benefits program, will cover your long-term care nursing home expenses so long as you meet the medical and financial eligibility criteria for the program. Here are 5 important numbers to keep in mind with respect to eligibility for long-term care Medicaid benefits in Massachusetts.

You Must Be 65 Years of Age or Older. 

The first hurdle to apply for and receive Medicaid long-term care benefits is that you must be 65 years of age or older.

You May Not Have More Than $2,000 of Countable Assets. 

Medicaid has strict limitations with regard to the value of assets an individual may own and qualify for long-term care Medicaid benefits to pay for nursing home care.  Assets may be deemed to be “non-countable,” “inaccessible” or “countable.”  Countable assets include assets such as bank accounts, investments, most retirement accounts and the cash value of life insurance, to name a few.  An individual may have only $2,000 in countable assets in order to be eligible for long-term Medicaid benefits.  Non-countable assets include pre-paid burial accounts, one automobile and a primary residence.  Inaccessible assets are less common and include things like the proceeds from a lawsuit that has not yet settled or an anticipated inheritance during the estate administration phase and before distribution. Countable assets above that $2,000 threshold must be spent down (in permissible ways) before eligibility will be achieved.

A Spouse Living in the Community May Keep an Additional $126,420 of Countable Assets.

If the individual who is residing in the nursing home and applying for Medicaid benefits has a spouse who is living in the community (i.e. not in a nursing home) that community spouse has asset limitations, too.  The spouse is allowed to own only $126,420 of countable assets for 2019.  This amount, called the Community Spouse Resource Allowance (CSRA), is typically increased every year. This means that a married couple living in Massachusetts may have a combined total of $128,420 in countable assets (2019).  If they have additional countable assets, such as an investment account or an IRA worth $100,000, then those funds must be spent down before the nursing home spouse will be eligible for Medicaid benefits.  An experienced elder law attorney can advise a married couple of options for dealing with excess assets in this situation.

Beware the 5-Year Look Back Period!

An important thing to remember about Medicaid benefits eligibility is that Medicaid will review any transfers of your assets made within the five years (60 months) prior to the Medicaid application.  This is often referred to as the 5-year look back period. Medicaid can request copies of account statements for the last five years to check for gratuitous transfers.  For example, if you gifted $15,000 to your child three years prior to applying for Medicaid benefits, Medicaid will view this as a disqualifying transfer of funds because you could have otherwise utilized that money to cover a month of your nursing home expenses. Disqualifying transfers made within the 5-year look back period will result in a period of ineligibility.

The Applicable Divisor is Currently $367.21 Per Day.

Medicaid determines the period of ineligibility for Medicaid benefits due to a disqualifying transfer by dividing the value of the asset transferred by the average daily cost of a nursing home as determined by the state. As of November 1, 2019, this transfer divisor is $367.21 per day in Massachusetts. This means that $15,000 you gifted to your child three years ago will result in 41 days of ineligibility for Medicaid benefits to you now.  But here’s the kicker – the disqualification period only begins to run once you have no more than $2,000 of countable assets.  This means that after all of your funds are spent, you will then be ineligible for Medicaid benefits for 41 days. This is a serious ‘trap for the unwary’ and why long-term care planning is so important.

Another trap for the unwary can occur when someone has made a large gift, such as putting the house in the children’s names, and then applies for Medicaid benefits prior to the expiration of five years.  In that case, the ineligibility for Medicaid benefits can extend well beyond five years from the gift.

The financial eligibility rules for long-term Medicaid benefits are complex and everyone’s situation is unique.  The elder law and medicaid planning attorneys at Samuel, Sayward & Baler LLC can assist you with planning in advance to preserve your assets for your family in the event you require Medicaid long-term nursing home care benefits and can help you prepare to navigate the Medicaid application process.

Attorney Abigail V. Poole is an associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters such as long-term care planning. She is an active member of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA).  This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781/461-1020.

December, 2019

© 2019 Samuel, Sayward & Baler LLC

Medicaid and Staying in Your Home versus the Nursing Home- 5 Things to Know

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One of the most frequent concerns I hear from clients in my estate planning and elder law practice is the fear of losing their home to the nursing home if they need long-term care.  This is a valid concern when it comes to Medicaid and estate planning.  Long-term care can cost upwards of $14,000 per month.  If the long-term care recipient is not able to pay those costs, then Medicaid (sometimes called MassHealth in Massachusetts) will pay. However, there is a cost associated with having MassHealth pay long-term care costs.  First, in order to be eligible for Medicaid benefits to pay for that care the applicant must meet the strict financial criteria imposed by the program.  Second, to the extent a Medicaid recipient owns assets at his death, the state can seek reimbursement from those assets for the funds it expended on the Medicaid recipient.  So, what happens to the home when the owner needs long-term care?  Here are five things to know about Medicaid and the home.

  1. You don’t have to sell it, but there will be a lien. Many people think that they must sell their home in order to be eligible for MassHealth benefits. Sometimes they believe this because they have been told so by the long-term care facility caring for their loved one.  This is not the case. The home is a so-called ‘non-countable’ asset (up to $878,000 of value in 2019) for purposes of determining Medicaid eligibility.  That means that a person can receive Medicaid benefits to pay for nursing home costs and still own his home.  However, the Commonwealth will file a lien against the property with the registry of deeds unless the owner’s spouse or a child or sibling who meets specific requirements is still living in the home.  The amount of the lien is the amount the state pays on behalf of the Medicaid recipient. As such, the house cannot be sold during the owner’s lifetime without re-paying the state.  In addition, the applicable MassHealth regulations require that the lien be satisfied within 9 months of the appointment of a Personal Representative following the death of the homeowner.
  1. Keeping the home can be challenging. Although the regulations permit a Medicaid recipient to own her home, this can be challenging since all but a small amount of the recipient’s monthly income must be paid to the nursing home each month.  As such, there is no income available to pay the real estate taxes, insurance, utility bills and the cost of upkeep on the home.  In some cases, family members will pay these expenses and hope to be reimbursed when the home is eventually sold. In other cases, the home will be rented and the rental income used to pay the property expenses.  Both of these options present challenges and should be thoughtfully considered before embarking on either and require proper Medicaid planning with an attorney that specializes in long-term care matters.
  1. Transferring ownership of the house to the spouse in the community is usually advisable. Many married couples own their home as tenants by the entirety which is a special form of joint ownership for married couples.  This form of ownership means that when one spouse dies, the house belongs entirely to the surviving spouse without the need for probate.  Although the house is a non-countable asset and the state is not permitted to file a lien against the property if there is a spouse residing in the home, it is usually prudent to transfer the home into the name of the community spouse when one spouse needs long-term nursing home care.  The reason for this is to protect the home from a lien (see #1 above) in the event the community spouse predeceases the nursing home spouse. There is no ineligibility period imposed for transfers of assets between spouses (see #4 below).
  1. Special rules for certain transfers of the home and the look-back period.   The general rule for long-term Medicaid benefits eligibility is that if the applicant (or his or her spouse) gave away assets within the 5-year period preceding the application for benefits, he or she will not be eligible for benefits.  This is sometimes referred to as the Medicaid look-back period. This penalty applies to transfers of the home as well as other assets even though the home is a non-countable asset.  However, there are some exceptions to this transfer penalty rule.   The most commonly used exception is the exception for transfers between spouses.  The Medicaid regulations permit assets, including the home, to be transferred between spouses without the imposition of any penalty period.  Taking advantage of this exception is a good way for a married couple to protect the home from a Medicaid lien or claim when one spouse needs long-term care.  Other exceptions to the transfer penalty include transfers to a blind or disabled child, to a child who has provided care to the applicant (subject to a variety of requirements), and to certain types of trusts.
  1. Long-term care insurance can help. Long-term care insurance is insurance that pays for care at home, in assisted living, or in a nursing home.  This type of insurance can be expensive, however, there is a lot of flexibility in the type of policies available and the amount of coverage that can be purchased.  Massachusetts has a law preventing the state from filing a lien or claim against the home if the Medicaid recipient has a long-term care insurance policy which meets certain minimum criteria.  In order to protect the home, the policy must:  1) have a minimum benefit of $125/day; 2) provide coverage for a period of at least 2 years; and, 3) still be in place at the time of admission to a long-term care facility. (Note that long-term care policies issued prior to March 15, 1999, need only provide for $50/day of coverage in order for the owner to be eligible for the lien exception.)

The prospect of losing one’s home to long-term care costs is scary.  However, there are steps that can be taken to reduce the risk that this will happen.  If you or a loved one are faced with the prospect of long-term care or entering a nursing home and want to protect your home or other assets from loss to future long-term care costs, seek advice from an experienced elder law attorney to learn about your options for doing so.

Attorney Suzanne R. Sayward is a partner with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. She is certified as an Elder Law Attorney by the National Elder Law Foundation, a private organization whose standards for certification are not regulated by the Commonwealth of Massachusetts.  This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781/461-1020. 

June, 2019

© 2019 Samuel, Sayward & Baler LLC

Proposed Expansion of Medicaid Estate Recovery

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Maria_144pxHave 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.

Proposed Expansion of Medicaid Estate Recovery

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Maria_144pxHave 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.  The home exemption is a long-standing component of the Medicaid laws and regulations, intended to ensure that the spouses or minor or disabled children of nursing home residents will never lose their home just because a spouse or parent requires nursing home care.

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.  It 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.  As such, if you transferred your home to your children 10 years ago reserving a life estate and you become eligible for Medicaid after July 1, 2016, your home will be at risk under the Governor’s proposed budget. If this proposal becomes law, it will significantly impact the planning Massachusetts residents are able to do in the future to protect the family home for the benefit of the surviving spouse or children.

Governor Romney made a similar proposal in 2003, which was enacted but repealed a year later by the legislature after a year of 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.  The Massachusetts chapter of the National Academy of Elder Law Attorneys (MassNAELA) is working diligently to defeat Governor Baker’s current proposal, which MassNAELA believes will have significant negative impact on the spouses and family members of Medicaid recipients.

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.

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