FAQs - Questions about Elder Law

Hoping to find explanations regarding Medicaid law, which falls under the jurisdiction of MassHealth in Massachusetts, or looking for help when it comes to planning around nursing home costs for your loved one? Elder law issues directly affect the wellbeing of your loved ones, and it’s important to enlist the help of someone who can make sense of these complicated documents and procedures. As an elder law attorney, Michael T. Baker can help when it comes to answering the tough questions and figuring out what’s the next step for your elder law proceedings. Read our Elder Law FAQs to learn more about Medicaid laws, MassHealth eligibility and how you can plan to make sure that the best programs and facilities are there for your support.

Frequently Asked Questions about Massachusetts Elder Law and Asset Protection:

1.  What is the difference between Medicare and Medicaid (known as MassHealth in Massachusetts)?
2.  How much in countable assets can one have and be eligible for MassHealth to assist with nursing home payments?
3.  What income is available to a spouse that is not in need of MassHealth for long-term care benefits?
4.  How does the five year look-back period work in Massachusetts?
5.  What is the penalty or disqualification period for transferring property?
6.  What are the consequences of transferring one’s home to children to protect it from the costs of long-term care?
7.  What should one consider when developing a plan for long-term care services?
8.  Does MassHealth or Medicaid pay for long-term care services outside of a nursing home?
9.  Is property held in an applicant’s revocable living trust a countable asset?
10.  What is respite care?

1.  What is the difference between Medicare and Medicaid (known as MassHealth in Massachusetts)?

The major distinction between the programs is that Medicare is a federal health insurance program for individuals age 65 and older, as well as, many with disabilities.  Medicaid is a combined state and federal needs based social welfare program.  In Massachusetts, Medicaid is known as MassHealth.  Medicare is composed of three primary parts known as Parts A, B and C. Medicare Part A covers hospital bills, Medicare Part B covers medical insurance and Medicare Part D covers prescriptions.

Eligibility for Medicaid/MassHealth is determined by meeting certain financial requirements, including income and/or asset limits.  If eligible, Medicaid covers a wider array of health services than Medicare to a broader spectrum of the population. 

Many qualify for both Medicaid and Medicare.  So in addition to seniors and those disabled, Medicaid is available to eligible children, pregnant women, parents of eligible children and to those who cannot afford insurance.  Note that while Medicare may pay for up to 100 days in a skilled nursing facility, an extended stay in a long-term care facility is not covered by Medicare. Medicare covers skilled health care, from providers with specialized training and experience to address medical needs.  Medicaid is the primary payor of nursing home care.

2. How much in countable assets can one have and be eligible for MassHealth to assist with nursing home payments?

When applying for MassHealth for long-term care services, the applicant’s assets are determined to be countable or non-countable.  If married, the spouse who will remain in the community is allowed $109,560 in countable assets and the spouse applying for benefits is allowed $2,000 in countable assets. A single person or a married person with a spouse already on MassHealth is allowed $2,000 in countable assets. 

3.  What income is available to a spouse that is not in need of MassHealth for long-term care benefits?

It is not an uncommon event that the primary earner (recipient of a pension and Social Security) of the household is also the spouse in need of long-term care benefits from MassHealth. Typically, this person’s income is used to offset the costs of nursing home care. However, this would often leave the spouse remaining in the community with little income to survive. MassHealth allows income of a member to be applied to the community spouse, instead of towards the cost of care, so that the community spouse has a minimum of $1,750 and a maximum of $2,739.

4.  How does the five year look-back period work in Massachusetts?

MassHealth with a few exceptions will impose a penalty period when a person 65 or older transfers assets to a person other than a spouse and applies for MassHealth benefits within five years of the transfer. As a result, the applicant is denied MassHealth benefits while the penalty is in effect.

5.  What is a penalty or disqualification period?

Most transfers made within the 5 year look back subject an applicant to a penalty or disqualification period of benefits. Two factors impact the length of the penalty period: (1) the value of the asset transferred; and (2) the penalty divisor set by MassHealth, which is currently $274 per day or $8,220 per month.  For example, transferring $300,000 of property will result in a penalty period of more than 36 months (300,000 ÷ $8,220= 36.496).  

6.  What are the consequences of transferring my home to my children to protect it from the costs of long term care?

New laws make it more difficult to give away assets when it is determined that nursing home or long-term care is necessary.  Penalties may be imposed on all transfers made within five years of applying for Medicaid (in Massachusetts Medicaid is MassHealth). In short, transferring your home to your children or another person other than your spouse will likely trigger a penalty or disqualification period for MassHealth Benefits. 

Additionally, giving away your home may result in some unintended consequences, largely loss of control and exposure to creditors of the person to whom the gift was made. Consider the situation where a parent at the age of 65, in good physical and mental health, deeds their home to a child who is married. Fifteen years later, the child and his spouse file for divorce. Is the home, which you technically no longer own, part of a divorce settlement?  What happens if the recipient of your generosity dies?  In addition there may be adverse tax consequences to giving assets away even if you do not have a taxable estate.

7.  What should one consider when developing a plan for long-term care services?

Whether it is asset protection, tax planning or both, the earlier a plan is developed to address future long-term care needs, the more options there are available. A one size fits all approach does not work and various factors including the age, health, income, assets and personal care goals should be considered. There are typically three common sources for paying for long-term care services:

a.)  Long-term care insurance;
b.)  Personal funds; and 
c.)  Medicaid (known as MassHealth in Massachusetts).

In addition, planning for long-term care has more than a financial planning component. When developing a plan, consideration should also be given to where the care will be provided.  The options typically include in the home, an assisted living facility, and or a nursing home. If the person plans to relocate to a warmer climate consideration should be given to the logistics of coordinating long-term care services and who will be impacted, i.e. a spouse and children. Further complicating the issue, everyone has their own wishes as to how they want to be cared for when and if long-term care services are needed.

8.  Does MassHealth or Medicaid pay for long-term care services outside of a nursing home?

For many, the primary goal as it relates to long-term care planning is to remain independent as long as possible and to stay in one’s home.  There are many in home services available to seniors needing long-term care services in the home and Community MassHealth covers certain in home services. The services may include personal care services ranging from bathing, dressing, feeding, meal preparation, and other social services to elders so that they can live in their communities instead of in nursing homes. For those who cannot remain in the home 24 hours a day, adult day centers or residential programs may be viable solution. The elder for certain periods of time during the week goes to an adult center, for activities while a caregiver works or tends to his or her personal responsibilities. Some caretakers are eligible for to receive a stipend as an incentive to care for one needing long-term care services in the home.  To be eligible for MassHealth services in the community, one must meet certain income and asset limits.

9.  Is property held in an applicant’s revocable living trust a countable asset?

While property held in a revocable trust will typically accomplish an estate planning goal of avoiding probate, assets held in a revocable trust are accessible to a Medicaid applicant and therefore are generally categorized as countable assets when applying for Medicaid.  For more on avoiding probate and estate planning, click here.

10.  What is respite care?

When a loved one needs long-term care services, most often the focus is on the one in need of long-term care services and not the caregiver. Providing care to a spouse, parent, aunt, uncle or other loved one is a demanding and often stressful responsibility. Since the caregiver is likely to have other responsibilities – a career, children, a spouse of their own -- ensuring that the caregiver receives a certain level of respite care is essential. Respite care can take many forms but the general goal is to provide breaks to the care giver that promote balance, rejuvenation and relieve stress in a caregiver’s life. Examples of respite care include the following:
a.)  Adult day centers
b.)  Residential programs
c.)  Planned overnight services
d.)  Caregiver retreats
e.)  Education and Support Programs

Contact an experienced Massachusetts Elder and Medicaid Attorney for Your Needs

If you need assistance of a Massachusetts elder lawyer to plan an estate or determine MassHealth eligibility or other estate planning services, contact us for a complimentary consultation or call: 508.429.6000 ext. 13 or 800.701.0352.