Nursing Home Eligibility

IMPORTANT CONSIDERATIONS IN THE MASSACHUSETTS MEDICAID RULES FOR NURSING HOME ELIGIBILITY

Medicaid (or MassHealth) is the primary method of paying for nursing home care in the Commonwealth of Massachusetts. Unlike Medicare, Medicaid is not an entitlement program. Eligibility for benefits occurs only when the Commonwealth considers an applicant to be impoverished. This is because payment is based on the standards that are applicable to welfare benefits.

The Quandary faced by most families facing the institutionalization of a family member in a nursing home is how to preserve ones hard earned assets while still becoming eligible for Medicaid.

While every situation is different – through the use of the basic Medicaid Rules there is often much that can be done to achieve our client’s goals.

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PERHAPS MOST IMPORTANTLY – THE EARLIER YOU PLAN THE MORE YOU CAN SAVE

Because of Medicaid’s “look-back” rules, the flexibility available to you in taking steps to preserve your assets diminishes as you get closer to needing nursing home care. While there are still steps that can be taken – sometimes even after a nursing home admission, the options become more limited as time passes.

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WHAT ASSETS CAN A MEDICAID APPLICANT POSSESS?

The answer is no more than $2,000.00 in countable assets.

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WHAT ARE COUNTABLE ASSETS?

Maybe the best way of defining countable assets is to tell you what assets are not counted by the Division of Medical assistance in determining Medicaid Eligibility. Countable Assets include everything except:

1. The applicant’s personal residence if located in Massachusetts

(unless the value exceeds $750,000.00);

2. One automobile or other motor vehicle (the value may not exceed $4,500.00, but the value may be any amount for a community spouse);

3. Personal possessions (jewelry, furnishings, etc…);

4. Inaccessible assets (assets held in irrevocable trusts, etc…).

Again, when considering what is meant by “non-countable assets,” what is important to remember is that these assets are not even considered by the DMA when determining Medicaid eligibility.

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THE PRINCIPAL RESIDENCE

The asset that most concerns the vast majority of our clients is the principal residence. As noted, in almost all cases it is not countable as long as:

1. The community spouse or other dependent relative continues to reside in the home; or

2. The applicant intends to return home after his nursing home stay (it does not matter that the institutionalized spouse may never actually return to the home – it is only the intent as expressed upon applying for Medicaid).

The bottom line – since the home is usually non-countable - it does not have to be sold in order to qualify for Medicaid.

Recent law changes have changed the way the principal residence is considered.

The first change occurred in July, 2003. Prior to that time the Commonwealth was entitled to recover monies it paid through the probate estate of the institutionalized spouse. Principal residences are often outside of the probate estate because it passes by law based on the manner of ownership. For example, if a husband and wife own by tenancy by the entirety, the property automatically passes to the surviving spouse.

Now the law allows the Commonwealth to seek recovery against any legal interest owned by the institutionalized spouse at the time of his/her death. If you own or have any interest in the principal residence, including through life estates or trusts, it can be the subject of state recovery procedures.

In 2006 the federal government passed the Deficit Reduction Act which, as part of the law’s provisions, held that equity in a home in excess of $500,000.00 could be considered countable. In some states this figure is $750,000.00.

The bottom line is that, for the most part, the principal residence still remains a non-countable asset, but it can be subject to a state lien after the death of both spouses.

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THE COMMUNITY SPOUSE – ADDITIONAL PROTECTIONS

The spouse of a nursing home resident is entitled to additional protections over and above the $2,000.00 in countable assets. The specific entitlement depends upon the particular circumstances of each situation.

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