Long term healthcare and nursing home care are topics of concern for many with aging parents or grandparents. A hot-button in the Commonwealth of Massachusetts, including the North Shore and towns such as Wakefield, Reading, Lynnfield, and Saugus, is MassHealth (Medicaid) and senior benefits. MassHealth is the government run health insurance plan in MA which combines Medicaid and CHIP (State Children’s Health Insurance Program) into one program. Qualified MassHealth members may be able to get doctor visits, prescription drugs, hospital stays, and many other important services.
A recent court ruling from the Supreme Judicial Court (the highest court in Massachusetts) presents some good news in determining qualification for certain benefits under MassHealth that may have an important impact on seniors. Daley v. Secretary of the Executive Office of Health and Human Services (Mass., No. SJC-12200, May 30, 2017) and Nadeau v. Director of the Office of Medicaid (Mass., No. SJC-12205, May 30, 2017).
For seniors to qualify for MassHealth, the general rule is that individuals must have assets of less than $2,000.00; and couples living together less than $3,000.00. This limit often requires individuals and couples to “spend down” or deplete their resources in order to qualify for Medicaid long-term benefits when they enter a nursing home. One practice has been for seniors to engage in “‘Medicaid planning’ in an attempt to transfer or dispose of assets long before they need long-term care so that, when the need arises, they may satisfy the asset limit and qualify for Medicaid benefits.” The purpose of Medicaid planning is essentially to give individuals whose assets exceed the aforementioned “limit” and would make them ineligible for long-term care benefits, the opportunity to qualify for Medicaid benefits. Some transfer their assets to their children or other loved ones to meet the asset threshold and avoid using their own assets to pay for long-term care. Medicaid rules enacted by Congress impose two restrictions on Medicaid planning, in an effort to prevent individuals from taking advantage of MassHealth benefits. The first is the “look back” rule, which “imposes a penalty for any asset transfer for less than fair market value made by an individual within five years of the individual’s application for Medicaid benefits”. For example, if elderly parents convey their home to their children for less than the fair market value. The “look back” rule provides that if such a transfer were to occur within that five year period, the applicant would be “ineligible for Medicaid benefits for a period of time determined by dividing the value of the transfer by the average monthly cost of the nursing home facility”.