Massachusetts Medicaid – Mass Health Eligibility
(Massachusetts Medicaid Rules – Rules in other states may be different)

When Medicare will no longer pay for the cost of a nursing home, patients and their families are often faced with difficult decisions. If it is not possible for the patient to return to their home, remaining in the facility may be the only option. The issue then becomes: how to pay for the cost of the nursing home.

Although many patients would prefer to private pay, the high cost of nursing home care can make this impossible. View the 2016 Genworth Financial Cost of Care Survey. Many people turn to Medicaid for assistance. Medicaid is called Mass Health in Massachusetts.

Qualifying for Mass Health
for Long Term Care in a Nursing Home

There are separate rules for Mass Health eligibility for married couples and single individuals. Assuming the person residing in the nursing home is medically approved, the following is a general summary of the applicable Mass Health rules in Massachusetts.

Note: Since Medicaid is a joint federal and state program, the rules and dollar amounts for other states may be different.

Married Couples: when one spouse is living in a nursing home

Assets: A married couple is allowed to keep a total of $121,220.00 (2016) in countable assets. This amount is adjusted every year for inflation.

Noncountable assets, which are not included in the $121,220.00 calculation include:

  • The applicants primary residence, if located in Massachusetts and the spouse of the applicant is living there;
  • Household belongings and personal property, including clothing, furniture, and jewelry;
  • A burial plot and pre-paid funeral plan;
  • Life insurance if the face value is less than $1,500.00;
  • A car of any value if the applicant or the spouse need the car for transportation.

If a couple has countable assets that exceed the allowed amount, strategies may be available to protect the additional assets. The perception that there is no possibility to protect assets is simply incorrect. Although the laws changed dramatically in 2006 when President Bush signed the Deficit Reduction Act, there remain viable options for protecting assets and for maintaining a quality of life for both the applicant in the nursing home and the spouse living in the community.

Single person living in a nursing home

Single people are allowed to have $2,000.00 in countable assets. Almost the same list of noncountable assets applies. The biggest exception is the principal place of residence. Whether the home is countable for Mass Health eligibility depends on a number of factors:

  • Is there a person to whom the home may be transferred without any penalty? For example, a child who lives with the parent, a sibling who may co-own the home, a disabled child, or a child under the age of 21 years. Additionally, if the applicant has Long Term Care Insurance, the home may be completely protected. If the applicant can establish any of these, the home may not be counted as an asset.
  • Does the applicant intend to return home?
  • Is the property rented?

Transfers, The Lookback Period, and Pre-Planning

In 2006, with the signing of the Deficit Reduction Act, the lookback period was changed from 3 to 5 years. In Massachusetts, this extension is being phased in over a period of years. The general rule is that if an application is made to establish Mass Health eligibility, the state has the right to “lookback,” and review financial records extending back 5 years. If the applicant’s records show that assets were simply given away, the state will refuse to pay for the cost of the nursing home. If the assets are able to be returned, that will “cure” the penalty, and the state will approve nursing home payments.

Pre-planning generally means setting up documents enough in advance of any anticipated nursing home placement. Pre-planning strategies may include Irrevocable Trusts, purchasing funeral plans, establishing Supplemental Needs Trusts for disabled children, or possibly purchasing Long Term Care Insurance. Which option may best suit a person depends on their personal wishes and individual goals. A consultation with a qualified elder law attorney to review options for preplanning for nursing home costs would be the best place to start.

In Massachusetts there may also be options to transfer excess assets of an applicant even if that person is entering or already living in a nursing home. It may be possible to transfer funds to a trust, already in existence, that will hold and dispense the funds for the benefit of the applicant. These trusts, called “Pooled Trusts,” have been established and are administered by a trust administrator – not a family member. These trusts accept funds from scores of individuals, and the funds transferred are protected, while achieving Mass Health eligibility. If the applicant is found to be disabled, the transfer of these funds should not be considered a disqualifying transfer. If the nursing home resident has funds remaining in the Pooled Trust at his or her death, the state is entitled to be reimbursed for any money paid to the nursing home. If there are additional funds remaining, those funds may be distributed to the heirs. Remember, the rules in your state may be different, so please consult with your attorney prior to transferring any assets.

Paying Back the State: Estate Recovery

By law, Mass Health must attempt to recover any money they may have paid to a nursing home on behalf of the applicant. Generally, Mass Health will seek repayment from assets that pass through probate – assets owned by the applicant in his or her name alone. If proper Mass Health planning and post Mass Health eligibility approval paperwork has been completed, there may be no asset that has to pass through the probate court.

As part of the planning process, it is important to review the Wills of married couples to make sure that assets are not given to the spouse living in the nursing home. New documents may be drafted for the spouse living in the home that would allow the house to be placed into a trust for the benefit of the nursing home spouse. This area of the estate recovery law is very changeable. Since Mass Health is allowed to develop and enforce their own regulations – within the federal guidelines for Medicaid – new procedures could become effective. Again, please consult with a qualified elder law attorney to review any changes in the law.

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