MassHealth eligibility has steadily become a hot topic for an increasingly aging population. Clients come to us seeking assistance for their own MassHealth eligibility or that of an elderly family member. With proper estate planning and documented substantiation, the MassHealth application period can be relatively smooth. However, there are many peculiar rules concerning MassHealth eligibility and application filing. The following brief FAQ touches on the more common questions raised by clients. However, for a more in-depth explanation of MassHealth eligibility and planning for potential MassHealth assistance in the future you should contact Lake Shore Legal and speak to one of our attorneys.
What is the asset limitation for MassHealth eligibility?
The asset limitation for MassHealth eligibility for long-term care services is $2,000 for an individual and $3,000 for a couple if both are in a nursing home and reside in the same room. Eligibility is achieved as of the date the applicant’s assets are either reduced to the program limit, or the date the assets would have been reduced to the limit had the medical bills incurred during the three months prior to the date for which MassHealth eligibility is sought been paid, provided that within thirty days of the notification of excess assets, those excess assets are spent.
Is the applicant’s personal residence a countable asset on a MassHealth application?
The residence is a countable asset if the applicant’s equity in the residence exceeds $828,000. Further, if the applicant intends to return home, this is a subjective test, then the residence should not be countable. The home will still be noncountable regardless of value and intent to return home, if any of the following relatives resides at the property:
Applicant’s child under age twenty-one or a blind or permanently disabled child;
A sibling of the applicant who already has an ownership interest in the house and has lived there since at least a year before the MassHealth applicant’s move to a nursing home;
A caretake child (a child of the applicant who lived in the house for at least two years before the MassHealth applicant moved to a nursing home, and who provided care that enabled the applicant to live at home rather than move to a nursing home); or,
Any other relative who is dependent on the applicant
More information concerning the personal residence can be found here.
Can I place my home in a trust and protect it from MassHealth attachment?
There are different rules for specific trust types:
If property is placed in a revocable trust for the benefit of third parties, then the trust is subject to a five year look back. MassHealth can also lien assets within a revocable trust because the property can be accessed by the applicant.
In practice, the Office of Medicaid considers any and all property placed into a nominee trust to be countable assets.
There is protection in an irrevocable retained interest trust. If the trustee has the power to distribute principal to the applicant, then the principal will count as an available asset of the applicant. However, if the applicant is only able to access the income of the trust, then the principal will be a non-countable asset after the five year look back period ends. The applicant should not be named as a beneficiary of an irrevocable retained interest trust.
What are the transfer of asset rules and penalties?
To discourage applicants and their spouses from transferring resources to achieve MassHealth eligibility for nursing home services, the law imposes a period of ineligibility for transfers of the principal place of residence and of countable assets. By transfer, the law refers not only to gifts, but to changes in ownership, paying the debts of others, transferring a stream of income, not accepting an asset, and other transactions benefiting people other than the applicant.
The period of ineligibility is one day of ineligibility for every $300 of value transferred. There is a five-year lookback by the Office of Medicaid concerning such transfers. Therefore, any transfer of an asset, other than for fair market value, within the last five years, from the date of the application, will be considered an improper transfer by the Office of Medicaid.
There are some exceptions to the transfer penalty. These exceptions include:
Transfer to a spouse for the sole benefit of the spouse;
Transfer either directly or into trust for the sole benefit of a child who is blind or permanently and totally disabled; or,
To a separately identified burial account.
What happens if the Office of Medicaid declines a MassHealth application?
Any person receiving an adverse decision regarding MassHealth eligibility may appeal for a fair hearing with the Office of Medicaid within thirty days of receiving the notice. The hearing will be held by a hearing officer within 90 days, however in most instances this hearing period is substantially longer. Hearing officers often exercise more discretion than Office of Medicaid intake workers in determining eligibility. An adverse fair hearing decision may be appealed to the Superior Court.
The expense of long-term skilled nursing home assistance is steadily increasing. Many clients are shocked when they see the costs of uninsured care and how quickly an individual’s hard earned assets are lost due to the cost of care. With proper estate planning, you can begin the process of protecting and isolating certain assets from MassHealth liens and ineligibility. Lake Shore Legal can assist you in preparing an estate plan that will begin the five-year look back period on certain assets in the event you later need MassHealth eligibility. Additionally, our attorneys have experience in preparing MassHealth applications in a complete and accurate manner so that intake workers will receive the proper information and substantiation. In the event that an application is denied, Lake Shore Legal can assist and represent your interests before the Office of Medicaid’s appeals office.