Medicaid, known as MassHealth in Massachusetts, is a health insurance program for persons who qualify under stringent eligibility rules. Some persons engage in Medicaid planning in an attempt to qualify for their nursing home care to be covered by the program. There are asset and income rules for married and unmarried individuals. Some assets are countable, and some are noncountable. Most types of transfers within 5 years of the application are considered disqualifying, but some types of transfers can be made even after a nursing home stay has begun. A lien can be placed on a person’s home, and an estate recovery claim can be filed against a decedent’s estate.
Sometimes Medicaid planning must be done more than 5 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 be done when the nursing home resident has a spouse or disabled child.
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, and another favorable federal Medicaid law allows those assets to be left behind in a testamentary trust.
Because of the jumble of rules, the key to successful Medicaid planning is knowing what happens during the application process; see 32 Things You Should Know When Applying for MassHealth to Cover Nursing Home Care in Massachusetts.
Most of the important issues in Massachusetts Medicaid planning can be found at Attorney Barreira’s secondary blog, MassHealth.info.