Qualifying for Medicaid - A Massachusetts Guide to Medicaid Asset Protection Techniques
I admire Roto Rooter. Few other businesses are so financially successful using a single tool - such as the spiraling drain cleaning tool. As an elder law and Medicaid attorney in Massachusetts I am starting to feel like Roto Rooter. New Medicaid regulations and qualifications have made it nearly impossible at the time of nursing home admission to protect an elder's assets. Despite the strict guidelines and pre-planning requirements of the Deficit Reduction Act and interim state and federal regulation, we are still winning the battle of family asset protection. If you are facing the spectre of paying the outrageous costs of a Massachusetts nursing home from your own funds please call Law for Life for a free telephone consultation to review your Medicaid asset protection options. Our phone number is (toll free) 877-325-6746 or 781-782-6000. We have offices throughout Massachusetts (Boston, Hingham, Wellesley, Winchester and serve the Worcester, Springfield, New Bedford/Fall River, Barnstable and Pittsfield areas through satellite and in-home appointments.
Often our only tool in Massachusetts is the Medicaid Qualifying Immediate Annuity, also called Single Premium Immediate Annuity (or SPIA). Although pooled income trusts have their place, we are not convinced that they will be available much longer as an emergency planning tool. These annuities are quite simple, the Medicaid applicant or their community spouse contributes a lump of funds to an annuity account with an insurance company and the insurance company returns the money to the annuitant over a fixed period of time consistent with their life expectancy under the HCFA life expectancy tables. When the annuitant dies then either the family or the Commonwealth of Massachusetts Division of Medical Assistance gets the funds depending very specific rules.
But there are several other options for elders and their families facing long term care financing and Medicaid qualification. There are exception for the principal residence where the nursing home resident's spouse is still living in the home. Same with siblings, minor, blind or disabled children. The other major exception is for children who are caregivers for their parents (the "caregiver exemption") in the two years prior to the elder's nursing home admission.
From an estate planning perspective and for non-real estate assets, our choices are more limited. There is the Medicaid Annuity (for which Law for Life is recognized as a Massachusetts source for the design and implementation of annuity based plans), but also the use of Special Needs Trusts that can be establish without disqualification for anyone in the Medicaid applicant's family. Disqualification for Medicaid is the term used by the Massachusetts Division of Medical Assistance (MassHealth) to describe the time period for which a Medicaid applicant or nursing home patient is ineligible for Medicaid benefits.
Of course, advance estate planning can solve a lot of these Medicaid qualification issues. If an elder client has good health, is generally under 80 years of age and has the wherewithal to pay annual premiums then Long Term Care Insurance is a great option. Premiums can be costly on a cash basis, but I have never had an elder law client that went on claim with Long Term Care Insurance complain about the benefits. The benefits are generally cash payments for home care and nursing home care. Many people call Long Term Care Insurance "nursing home insurance", but it is really much more than that as it includes a home care benefit that can be even more important to elders in need of services.
With the same foresight as an insurance applicant, elder law clients at Law for Life are often advised when they are healthy (I like to say "when you are still buying green bananas") to set up irrevocable trusts that preserve the step-up in tax basis and remove the elder law client's assets from inclusion in their resource calculation by MassHealth. The "trick" is that after setting up and funding these types of Medicaid trusts, the elder cannot qualify (or apply) for Medicaid for five years. At one time the waiting period was much shorter on transfers and trusts, but now it is a uniform five years before the trust's Medicaid protections kick in.
That's about it for asset protection and Medicaid qualification. It is imperative to speak with a competent elder law attorney such as us experts at Law for Life (our phone number is 781-782-6000 or toll free at 877-325-6746) regarding your personal situation as the regulations are very complex and change often during the year. Whatever you do, do not apply for Medicaid without speaking with an elder law attorney, no matter how much the nursing home pushes you to sign papers or an application company, such as Medi-Services encourages you to 'just get it done' - keep your pen in your pocket until you speak with an elder law attorney.
