Nursing Home Care & MassHealth – Eligibility Rules for the Single Person
April 24, 2014
As you well know, privately paying a nursing home bill is a very costly undertaking. Should you need nursing home care someday, typically Medicare and your supplemental insurance cover up to 100 days. After that, you either privately pay or look to Medicaid (MassHealth) to pay. This post explains the basic MassHealth rules for a single person needing nursing home care. See this post for the rules where one member of a couple needs nursing home care.
For a single person to receive MassHealth assistance with paying for nursing home care, generally speaking she can have no more than $2,000 to her name in liquid assets and minimal life insurance. She can own a home and be accepted into MassHealth, but the agency will require her to sell the home and use the proceeds towards her care. If the home does not sell during her lifetime, the agency will place a lien on the home and be paid back out of the member’s estate (“estate recovery”).
MassHealth uses a five-year look-back period. From the date of application, MassHealth looks back five years to see if you have made any gifts (typically anything over $100 must be explained). MassHealth disqualifies applicants who have made gifts in the last five years. Read here about what to do if you have over $2000 in assets.
Couples: Protect Your Assets from the Cost of Nursing Home Care
As you well know, privately paying a nursing home bill is a very costly undertaking. Should you need nursing home care, typically Medicare and your supplemental insurance cover up to 100 days. After that, you either privately pay or look to Medicaid (MassHealth) to pay.
For a married person to receive MassHealth assistance with paying for nursing home care, generally speaking, the couple can have no more than $119,240 in liquid assets (technically, the nursing home spouse can keep $2000, and the at-home spouse can hold the remainder) and minimal life insurance. The couple (or just one spouse) can own a home. If the nursing spouse owns an interest in the home, MassHealth will place a lien on the home, to potentially be paid back out of the member’s estate (“estate recovery”).
MassHealth uses a five-year look-back period. From the date of application, MassHealth looks back five years to see if you have made any gifts (typically anything over $100 must be explained). MassHealth disqualifies applicants who have made gifts in the last five years.
For many couples, MassHealth is a double-edged sword. Many at-home spouses are terrified of spending all their savings on their ill spouse’s care – MassHealth spares them that. On the other hand, if a healthy spouse is young and seems to have a long life ahead of her, then reducing her assets to just $119,240 is a very scary proposition. Contact our office for strategies to help the at-home spouse keep more of her assets, so that she is not living in fear of becoming impoverished.
The Single Person: Protecting Your Assets from the Cost of Nursing Home Care
If your loved one is single and would like MassHealth to pay her nursing home bill, then the basic rules are these: (1) She medically requires nursing home level care, (2) she has no more than $2,000 in “countable” assets (that’s money in the bank, retirement accounts, life insurance, etc.), and (3) she has not made any sizeable gifts in the last five years. This post focuses on options if she has over $2,000 in liquid assets.
The most important thing to remember is that you want to do what you can to give your loved one in the nursing home the best quality of life you can – keeping in mind that she is frail, perhaps cognitively impaired, not living in her own home anymore, not really in charge of what she eats and when, and other basic comforts. I usually tell clients to “spend down” on things that their loved one really enjoys – a new tv for her room? Books on tape? New clothes? An iPad loaded with pictures of the grandchildren? One client loved chocolate frappes from Friendly’s – so as part of her “spend down,” her niece bought a few hundred dollars’ worth of Friendly’s gift certificates and brought her aunt frappes at least twice a week. The little things make a big difference.
In addition to spending down on the “little things,” you can place extra assets into a “pooled trust.” This allows you to have a “savings account” for things that will inevitably come up while your loved one is in the nursing home. For example, if there is a family wedding and you want to bring your loved one home for the weekend, you can use the pooled trust to pay for a wheelchair van and 24-hour aides.
Another example is the “bed hold.” If your loved one needs to leave the nursing home, say to go to the hospital, MassHealth will pay to hold the room for only ten days. If your loved one will be out of the nursing home for longer than that, and you want her to be able to keep her room (i.e., not be moved to a new room upon her return), then you can ask the pooled trust to pay for the room until the elder returns. These are just two examples of things that MassHealth doesn’t cover – and the $2,000 that they permit the member to keep in her own name certainly won’t cover, either.
What happens if you own a home and sell it, putting you over the $2,000 limit? Once you sell the home and have more than $2,000 in the bank, you are no longer eligible for MassHealth. One approach often used at this point is to pay for the nursing home privately for some stretch of time, and then spend down on useful things and move some funds into the pooled trust to bring your own account back down to $2,000. Again, having the funds in the pooled trust gives you a savings account for the things that MassHealth won’t cover and that the minimal assets in your own name won’t either.
If you would like to explore whether placing your funds in a pooled trust is right for you, please call our office. We are here to help.
Consider Using a Pooled Trust with MassHealth Nursing Home Planning
If a single person wants MassHealth assistance with paying for nursing home care, but has more than the $2,000 in assets that MassHealth will permit her to keep, one option is to transfer the excess assets to a pooled trust.
A pooled trust is a trust managed by a non-profit for the benefit of disabled individuals. MassHealth regulations permit a single person to transfer assets to a pooled trust and still qualify for MassHealth. Transferring excess assets to the pooled trust would allow you to qualify for MassHealth while having funds held in the trust that you can dip into to supplement your care. For example, MassHealth won’t pay for those new dentures you need, or for a chair car to take you to your grandchild’s graduation. After you pass away, the pooled trust keeps about 25% of the balance (to support its mission of assisting disabled adults), and MassHealth is paid back for whatever it has paid the nursing home on your behalf.
Because of the payouts at the end to the pooled trust and to MassHealth, you can see that this is not a vehicle for preserving all of your assets for your family – but it is still a good planning option. First, MassHealth pays a lower rate to the nursing home than private payers, so in the end, you are paying the nursing home, but less than if you were to pay privately. Second, by transferring the funds to the pooled trust, rather than spending all your assets down to $2,000, you establish a “savings account” into which you can reach for extra expenses that MassHealth does not cover, such as companion care, or a home health aide for visits home. After the pooled trust and MassHealth are paid, your family will receive any balance.
For examples of pooled trusts in our area, check out:
Testifying at the State House
August 5, 2013
Last week, I headed to the State House to once again testify on bills that could plug some holes in the MassHealth nursing home payment system and make things a bit easier for families caring for frail elders.
The shorthand for this bill is the “transfer of assets” bill. It comes down to this: As you probably know, should you need nursing home some day, and if you need MassHealth to pay for it, MassHealth understandably looks through five years of bank statements to see if you’ve given any large sums away in the last five years. After all, it would not be fair if we could just give our money away and then ask our fellow taxpayers to foot our nursing home bills.
But the problem lies in abiding by this principle too strictly. The MassHealth regulations (based on federal law) actually state that you cannot transfer assets within the last five years with the intent of qualifying for MassHealth. The MassHealth regulations indicate that applications should be approved where the assets “were transferred exclusively for a purpose other than to qualify for MassHealth.” The problem is, MassHealth is not following its own regulations.
Quite frequently, nursing home placement is the result of a sudden decline, or an unexpected illness. It is fairly common for a healthy, active elder to do what she has always done – birthday gifts to family, donations to her church, help out a child divorcing or at risk of foreclosure – and a few years later be faced with a sudden turn of events and need to move to the nursing home. These elders should not be punished for not only not knowing about the five-year “look-back” rule, but worse – for being healthy and loving their families.
What happens to you if you are one of these unlucky people? Let’s say you were in good health, your child’s home was in foreclosure, you paid off her debt, and then let’s say four years later, out of the blue, your health fails and you need nursing home care. Well, you might pay down most of your remaining assets to the nursing home, and once you run out of money, you apply for MassHealth assistance. If you run out of money before you get to the five-year mark from making that gift, things are going to be difficult.
Imagine this: You are in the nursing home, you have spent all your savings, and you have no choice but to ask for MassHealth to pay your nursing home bill. It is only at this point – when you have no more money – that they impose the disqualification period that resulted from the gift. Let’s say you gave your kid $33,000 – that amounts to four months of disqualification. So you are in the nursing home, you have no money, and MassHealth won’t start paying for another four months. The nursing home isn’t paid to care for you, so now what? Is it fair that the nursing home should provide 24/7 room, board, and medical attention without being paid? They can’t operate that way. They try to evict you for nonpayment. And then things get ugly. You might bounce from hospital to hospital, or you might end up in your last choice of nursing homes. Not pretty.
The “transfer of assets bill” would make it clear to MassHealth caseworkers (the folks that review and then approve or deny your nursing home application) that transfers in the last five years shall not result in denials if the transfers were made for certain various reasons. These are reasons that you might categorize under “living my life” or “taking care of my family,” such as a pattern of small gifts (monthly donations to church or annual birthday checks); helping a relative in financial crisis, foreclosure, or with medical care; or, whatever the reason for the transfer, at the time of the transfer, there was no reason to think you would need MassHealth in the next five years.
The “transfer of assets” bill is actually two identical bills – one filed in the House by Representative John Fernandes (H1021) and one filed in the Senate by Senator Katherine Clark (S503). Please call your state representative and senator and ask them to support these bills. To find your rep and senator and their contact information, click here. And thank you.
Department of Public Health Survey on Health Needs for People with Disabilities
May 20, 2013
Another Good Reason to Buy Long-Term Care Insurance
November 1, 2012
I talk to a lot of my clients about buying long-term care insurance (LTCI). Many people come to my office asking about “nursing home planning” – how to make sure they don’t use up all of their savings if they end up in a nursing home. And my response is always, “Your nursing home planning is to stay out of a nursing home.” And one key piece to keeping people in their homes with care, and out of the nursing home, is to have LTCI.
After seven long years of advocacy by MassNAELA (that’s the Massachusetts Chapter of the National Academy of Elder Law Attorneys), yesterday Governor Patrick signed a bill that makes LTCI an even better bet for seniors.
Until now, if seniors were lucky enough to have LTCI, they could of course use the policy to pay for care in their homes. But – they’ve had to keep a careful eye on how much of the policy they were using up at home. When home care is no longer medically viable, and the senior needs to go to the nursing home, then the LTCI would protect the value of their home from the cost of nursing home care – but only if they entered the nursing home with a certain amount of money still in the policy. This had the effect of either (1) forcing seniors to leave their homes before they wanted to, or (2) staying at home longer and using up the policy benefits, finally going to nursing home, and losing the house to the cost of nursing home care.
Now things will be different – and better. If a senior has a LTCI policy that meets MassHealth standards at the time of purchase, then she can use as much of that policy as she wants to stay in her own home for as long as she safely can. Then, if she ever needs to move to a nursing home, no matter how little benefit is left in the policy, her home will still be sheltered from the cost of nursing home care. This will help seniors stay at home longer, and will keep MassHealth’s costs down. A win-win for seniors and MassHealth.
Good News on Pooled Trusts
August 9, 2012
When a single person is entering a nursing home, and if she needs MassHealth to assist her with paying for that, then she needs to bring her assets down to $2,000. Elder law attorneys often recommend setting aside a “cushion” in a pooled trust – since $2,000 amounts to bubkes, really. Having a cushion set aside in the pooled trust provides the elder with the opportunity to buy things that MassHealth doesn’t provide, like hearing aides, a better bed, companion care, extra therapies, etc.
In the last few years, states across the county have been trying to shut down this opportunty for seniors, saying that anyone over 65 can’t transfer assets to the pooled trust and then expect MassHealth to help with the nursing home bill. Well, we can now breathe a little easier – the federal court that covers Pennsylvania has ruled that in fact, anyone 65 and over can establish a pooled trust account, and the states cannot say otherwise. This Circuit Court’s opinion is not binding on Massachusetts, but there is a strong tradition of federal courts in the same area of the country taking cues from each other.
To date, MassHealth has still permitted elders to transfer funds to pooled trusts so that they can have cushions while in the nursing home. From time to time MassHealth talks about prohibiting that practice. Now it looks even less likely that they can stop elders from using pooled trusts. That is good news for single seniors who need nursing home care and want to hold on to a little something so that they can pay for things not provided by MassHealth.
Is Your Spouse Moving to a Nursing Home? Are You Scared of Using up Your Savings on the Nursing Home Bill?
August 8, 2012
When one member of a couple needs nursing home care, and if you are asking MassHealth to assist with the monthly bill, then the healthy spouse at home may keep only $113,640 in liquid assets, in addition to her home. For a younger spouse with many years ahead of her, reducing her liquid assets to only $113,640 can be a very scary proposition.
One option for the healthy spouse to hold onto more of her savings is to convert the liquid into real estate, namely, to make improvements to her home. Now is the time to make the repairs you’ve been putting off – new heating system, new roof, etc. Think about what modifications will allow you to stay in your home for as long as possible, like widening doorways and remodeling a bathroom to be easier to use if you have less mobility. And if you are not planning to stay in your home for much longer, then think about what improvements will help you sell your home.
Another option for helping a healthy spouse hold on to more of her savings is an annuity. MassHealth permits an at-home spouse to convert her excess assets to an annuity that meets very particular requirements. You absolutely must work with an elder law attorney if you want an annuity for MassHealth purposes. Most financial advisors are not familiar with the MassHealth annuity requirements. And those advisors that do know the requirements don’t want the liability of advising you themselves.
When one member of a couple is entering a nursing home, it is critical for the at-home spouse to meet with an elder law attorney to understand her options. Adjusting to living alone is hard enough. You shouldn’t also have to learn how to live with the fear of running out of money.
Heard in the Office: “I Don’t Want the Nursing Home to Take My House.”
August 6, 2012
I hear this a lot. Let’s be clear on the very basics. If you’ve watched friends go to a nursing home and “lose the house,” it’s not the nursing home forcing them to sell. Like all medical providers, nursing homes need to be paid.
Your Medicare and supplemental health insurance policy (ex. MediGap) will pay for up to 100 days – after that, you are on your own. At that point, some people have the ability to privately pay, and they use their savings, and perhaps even sell the home to pay the monthly bill. Other people don’t have savings or even a home to convert, and they ask the state to pay the bill (that’s MassHealth, also called Medicaid).
And there is a third category of folks, where there is a spouse living at home who simply can’t afford to use her savings to pay $10,000 – $12,000 per month to the nursing home if she is going to be able to continue supporting herself at home. She may do some planning so she can ask MassHealth to pay for her spouse’s nursing home care while also being able to retain enough of her assets to support herself at home without living in fear of poverty.
If you are living at home and your spouse needs nursing home care, contact our office so we can help you protect yourself while also making sure your spouse receives the medical care he needs.