Medicaid Planning
Medicaid, known as MassHealth in Massachusetts, is a health insurance program for persons who are eligible depending on income, assets and marital status. A primary reason people apply for MassHealth is for help covering the costs of nursing home care. Ideally, Medicaid planning can be done more than five years in advance of filing a MassHealth application. In some cases, however, Medicaid planning can take place even after the nursing home stay has begun; last-minute Medicaid planning is often done when the nursing home resident has a spouse or disabled child. Whenever your planning is done, it is important to know about MassHealth’s rules.
MassHealth has stringent eligibility rules, including:
- Asset and income rules for married and unmarried individuals. Some assets are “countable,” meaning they are considered when eligibility is determined. Countable assets include cash, stocks, bonds, investments, retirement accounts, savings, and checking accounts, and real estate in which one does not live. “Noncountable” assets include things like personal belongings, a personal vehicle, and often one’s primary home.
- Most types of transfers within five years prior to the application are considered disqualifying. For example, transferring the family home to an adult child within the five years prior to applying can be disqualifying if you do not receive fair market value for the home. Some transfers are not disqualifying and can even be done after a nursing home stay has begun. (For more information, see “Despite Medicaid Transfer Restrictions, Some Transfers of the Home are Always Safe.”)
Because the rules are complicated, the key to successful Medicaid planning is knowing what happens during the application process. Denied applications lead to stressful appeals and delays, so experience with the MassHealth application process is helpful to deal with the advance planning process. Attorney Barreira has over thirty years of experience and can share his knowledge with you.
For example, the federal Medicaid law has some especially favorable rules for married couples. The spouse-at-home, known as the community spouse, even if living in an assisted living facility, receives asset and income allowances, which are indexed for inflation, and is even allowed to convert excess assets into an investment that yields protected income. One important Medicaid planning consideration for the community spouse is ensuring that if the community spouse dies first, the protected assets do not end up being inherited directly by the spouse in the nursing home, which would give MassHealth access to the funds; one favorable federal Medicaid law allows those assets to be left behind in a testamentary trust. MassHealth can place a lien on a person’s home and can file an estate recovery claim against a decedent’s probate estate in order to recover some of their costs, so it is important to plan carefully in order to protect your assets including your family home.
For more information, check out Attorney Barreira’s blog post: 32 Things You Should Know When Applying for MassHealth to Cover Nursing Home Care in Massachusetts. You can also find most of the important issues in Massachusetts Medicaid planning at Attorney Barreira’s secondary blog, MassHealth.info.
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For questions on Medicaid Planning, please use the Contact Form below or call the office of Brian E. Barreira at 508-747-8282 to schedule a personal appointment and, if travel is a problem for you, he can conduct a Zoom meeting with you.
