Under federal Medicaid laws and MassHealth regulations, disqualifying transfers of assets (which are usually gifts or below-market sales) disqualify not only the person who makes those transfers, but also that person’s spouse. A prenuptial agreement or postnuptial agreement has no effect on the required disqualification imposed on MassHealth applicants under federal Medicaid law.
Any disqualifying transfers of assets made by a person are problematic because they can disqualify that person’s spouse for the next 5 years, which is the lookback period currently in effect for MassHealth. Therefore, gifts should not be made if a nursing home stay and MassHealth application are likely in the near future, and should especially not be made during the MassHealth application process.
The month after a MassHealth approval for an institutionalized spouse, however, a different set of rules applies. At that point, whatever the community (i.e., at-home) spouse does with real estate and other assets is not treated as having been done by the institutionalized spouse. This letter I received in 2000 from the federal government agency overseeing the Massachusetts MassHealth agency confirms that a community spouse may transfer assets the month after MassHealth approval of the institutionalized spouse.