These rules apply when applying for MassHealth in anticipation of a nursing home placement or when the applicant lives in a nursing facility and applies for MassHealth when nearing the limit of their assets. See: Senior Guide to Health Care Coverage for seniors and for persons of any age needing long-term-care services.

Long-Term Care ASSETS Rules

Many of our patients who are facing many decisions related to nursing home care may have many misconceptions about applying for Medicaid/MassHealth. All of what follows, as complex as it is, is a simplification. Individual situations vary.

Anyone with significant assets should be encouraged to consult an attorney who specializes in MassHealth law.  One place to start a search is the National Academy of Elder Law Attorneys (520) 881-4005 or http://www.massnaela.com.

Assets Basics

Assets include cash, savings, investments and certain things one owns that have value.

• For most applicants under age 65, there are NO asset limits.
• For most people age 65 years or over, and people who are institutionalized or who would be institutionalized without community-based services, there is an asset limit.

• countable assets cannot be greater than $2000 for an individual (for couples see "community spouse" section) for MassHealth
• (countable assets cannot be greater than $4000 for an individual and $6000 for a couple for MassHealth Buy-In- which does not cover long-term care.)

  What assets are counted?

  MassHealth will give you a complete list of countable and noncountable assets. For long-term care:

  • Assets that are not counted include:  
    • prepaid funeral or burial arrangements
       
  • Assets that are counted include:
    • vehicles
    • real estate (see The Home for details about the primary residence)
    • cash, bank accounts, securities
    • pensions, annuities, retirement accounts
    • cash surrender value of life insurance policies
    • certain other countable assets

      (This section adapted from www.massresources.org)

  Trusts

Whether or not they are countable as assets depend on specifics about how they are written. In this area patients should be referred to a lawyer. Simplistically, revocable trusts are considered available assets. Irrevocable trusts, depending on the specific legal language used to set them up, may be deemed available or unavailable. Generally if one is expecting an imminent admission to a nursing facility it is too late to set up a trust to protect assets.
 
The Home - Protecting from Estate Recovery

Good primer: MassHealth Planning and Real Estate- Margolis & Bloom blog post, October 11, 2016.

The biggest concern most people who are going into a nursing facility have is about whether or not they have to sell their home (the primary residence. Second homes are not afforded the same protections outlined below). In general MassHealth will place a lien on a home if they have paid nursing facility or other long-term-care charges. The state may seek repayment of MassHealth outlays after that person’s death ("estate recovery"). There are some exceptions that protect the home:

• Long-Term Care Insurance Policies & The Home- If the applicant had an qualified long-term care insurance policy in place on the date of admission AND notifies MassHealth of this and that she/he does not expect to return home, MassHealth will not seek repayment of nursing facility costs or other long-term-care expenses. To qualify for this exemption, the Long-term-care policy, if issued after issued March 15, 1999 must meet the following criteria :
  • It must cover nursing and custodial care in a nursing facility licensed by the Department of Public Health.
  • The LTCI policy must provide a benefit of at least $125 a day for at least two years. Until 2013, MassHealth required that the policy be qualifying at the time the applicant moved to a nursing home, meaning that at least two years of coverage remained at that time. Many advocates felt that this policy was perverse, since it both reduced the incentive for seniors to purchase LTCI and encouraged them to move to nursing homes and seek MassHealth coverage sooner than they might have done otherwise. After significant advocacy, the legislature passed a law (M.G.L. c. 118E, sec. 33) permitting qualified policies to be partially spent down paying for home and assisted living prior to the beneficiary entering a nursing home and still qualify for the estate recovery exemption. MassHealth issued a letter in June 2013 clarifying that there must be at least one day of benefits remaining when entering a nursing home. (See the full newsletter article.)
  • Policies can't have an elimination period (days of institutionalization before policy begins to pay benefits) longer than 365 days. If the insured is discharged to the community and re-institutionalized he/she is not subject to another elimination period unless he/she has received no benefits for a period of at least 180 consecutive days. In lieu of an elimination period, the policy may have a maximum deductible of $54,750.
  • Those plans issued prior to March 15, 1999 have a lower standard to meet.

• Permissible Transfers of the Home:
  Applicants are allowed to transfer title of the home (whether a single- or multi-family) to specific people without jeopardizing MassHealth eligibility.

Those people are:

• a spouse,
• a minor child,
• a disabled adult child,
• a "caretaker child" (an adult “child” who has lived in the home for at least 2 years while providing care that allowed the applicant to remain in the community),
• or a sibling who has equity interest in the house who has also lived in it for at least 1 year prior to date of applicant's admission to nursing home.

From the time of application the applicant has 90 days to make such allowable transfers of the property into the name of one of these family members.

• American Indians & Alaska Natives may be Exempt from Estate Recovery
• Note: These groups may also be exempt from cost-sharing (co-pays or premiums), see following bullet for detail.
• See details: "MassHealth Estate Recovery- American Indian and Alaska Native Exemptions", MGH Community News, February 2010
• See Hardship Waiver forms for American Indians & Alaska Natives - scroll down to "Hardship Waiver Application" section.
• Other situations & the Home:
  • Also see Will MassHealth Take My House? For a summary article/advocacy tips.
  • Single-Family Homes:  If none of these situations apply, then, IF it is a single-family home AND IF the applicant expects to return home, it can be protected at least temporarily.  However under the Deficit Reduction Act of 2005 (DRA) rules, only the first $840,000 (in 2017) of home equity is a non-countable asset.  If the house is worth more than that, then the applicant needs to find a way to spend-down the difference.  Some possibilities: sell the home and spend-down the proceeds, borrow the difference to reduce the equity to $840,000, challenge the valuation of the house, or work out a deal with the nursing home – in effect a loan – where the facility will provide the difference in coverage in exchange for a mortgage/lien on the property.

  • Single-family homes, IF it is clear the applicant will not be returning home, (and there is no family member eligible to transfer the propterty to) the applicant is expected to sell the home.  Once he/she has declared intent to sell the home at fair market value the asset is exempt from consideration in the asset base for 9 months (with the possibility of an extension if after 9 months they are still actively trying to sell).

  • Multiple-family homes may not need to be sold.  Multiple-family homes are treated somewhat differently; they are viewed like a business, and therefore as a potential cost-offset for MassHealth. Therefore, unlike single-family homes, IF it is income-generating the multi-family dwelling does not have to be sold.  “Income-generating” is defined as garnering income in excess of expenses and capital expenditures. In this case MassHealth would not require it be sold, but would put a lien on it to be exercised at the time of the applicant's death.  This income would become part of the "patient paid amount" (what the patient pays the nursing facility), and therefore lowers the MassHealth portion of the bill.

    Advocacy tip:  MassHealth doesn't set a threshold for how much income the property must generate.  Some families who previously were providing free or low rent to relatives/friends have calculated the expenses and capital expenditures and by setting rents just above that amount (as little as $1/month above that amount) have made a multiple-family home meet the definition of “income generating”.  By doing this they have kept the house from being sold and these tenants from being evicted.

• Estate Recovery- Hardship Waivers

Federal law requires MassHealth to have an estate recovery program. This program requires MassHealth to recover assets from the estates of certain MassHealth members after their death, unless exceptions apply. Estate Recovery applies to members who are:

• 55 years old or older
• Any age and living in a long-term care or other medical facility

Note: Estate recovery may apply to MassHealth members whether or not they enrolled in a health plan, such as a Managed Care Organization, Accountable Care Organization, Senior Care Options (SCO), PACE, or One Care.

MassHealth amended regulations at 130 CMR 501.000 and 515.000 effective May 14, 2021 to update and expand its definition of undue hardship to waive estate recovery. The regulation changes include:

• No longer filing estate recovery claims on probate estates valued at $25,000 or less. (This change was initially a pandemic response, but was made permanent with this regulation update.)
• An expansion of the existing criteria for undue hardship to qualify for a waiver:
  • Eliminates the requirement that the waiver is conditional for a two-year period. Previously, MassHealth waived its estate recovery claim if at the end of the two-year conditional period all criteria and circumstances for the waiver were still met. These amendments eliminate the conditional period and MassHealth will waive recovery upon its initial determination that the criteria and circumstances for the waiver are met.
  • The creation of two new hardship waivers – Care Provided Hardship Waiver and Income-Based Hardship Waiver.
    • Care Provided Hardship Waiver
      MassHealth will waive its estate recovery claim upon application by the personal representative or public administrator of the estate and a determination that all of the following criteria are met:
      (1) the heir resided in the home for two years prior to member’s admission to an institution or death;
      (2) during that time, the member needed and the heir provided a level of care that avoided the member’s admission to a facility;
      (3) the heir continues to live in the home at the time the notice of claim is filed;
      (4) the heir was left an interest in the property under the member’s will, inherited the property under laws of intestacy, or the member’s legal title or interest otherwise passes to the heir by operation of law;
      (5) the sale of the property is required to satisfy the claim; and,
      (6) the heir is not being forced to sell the property by other devisees or heirs.
    • Income-Based Hardship Waiver
      The personal representative or public administrator of a member’s estate may apply for a waiver of estate recovery due to financial hardship based on the income of heir(s) who inherited an interest in the member’s estate. If MassHealth determines that the family group of the heir(s) had a gross income below 400% of the federal poverty level for two years prior to the date of the MassHealth notice of claim being filed, MassHealth will waive recovery in an amount equal to the value of each qualifying heir’s interest in the estate up to a maximum of $50,000 per qualifying heir. If there is more than one qualifying heir in an estate, the total amount of the waived amount will be limited to a total of $100,000.
  • Hardship waiver forms: at www.mass.gov/estaterecovery.
  • To learn more and review the MassHealth Estate Recovery FAQ: www.mass.gov/estaterecovery.
  • MassHealth members with questions about Estate Recovery can call MassHealth at 1-800-841-2900 (TTY: (800) 497-4648).
  • Source: MassHealth Estate Recovery, Massachusetts Health Care Training Forum, May 14, 2021 and MassHealth Eligibility Letter 238 May 14, 2021.
• MA Estate Recovery Changes - Fall 2024.

  For years, Massachusetts had one of the nation’s most aggressive approaches to seeking reimbursement for Medicaid expenses from the estates of people who received coverage.

  Federal law requires states to seek reimbursement for some Medicaid coverage, but Massachusetts was among 23 states that went well beyond those requirements with policies that allowed the state to essentially bill the estates of the dead for much of the coverage they received in life.

  That changed when Governor Maura Healey signed legislation that significantly limits the practice of estate recovery in Massachusetts.

  Estate recovery is a federally mandated practice requiring states to seek reimbursement from the estates of the deceased who received long-term care from age 55 or older, including those who lived at home, or people of any age who permanently lived in a long-term care or medical facility. Massachusetts went beyond the federal requirements and sought to recover, with some exceptions, all Medicaid expenses, including preventative procedures and care for chronic conditions. Also vulnerable were participants in a MassHealth program called CommonHealth, which gave benefits equivalent to Medicaid to people who earned too much to qualify for public health coverage. CommonHealth members pay hundreds of dollarsa month to participate.

  The new law exempts CommonHealth members from estate recovery and restricts the state to conducting estate recovery only for long-term care expenses, aligned with the federal minimum requirements.

• Opinion: Mass. Burdens Poor by Overly Aggressive Policy to Recoup Medicaid Costs After Death, MGH Community News, February 2024.