Category Archives: MassHealth Application Process

Minimum Monthly Maintenance Needs Allowance for Nursing Home Resident’s Spouse Is Now $1,966.25 until 6/30/2015

by: Brian E. Barreira, Esq.

When one spouse is living in a nursing home and the other spouse is living anywhere else, the spouse who is not living in the nursing home (who is known under MassHealth law as the “community spouse”) is allowed by MassHealth to keep some (or sometimes all) of the nursing home resident’s income through an income allowance known as the Minimum Monthly Maintenance Needs Allowance (MMMNA).  Every July 1st, this figure changes based on federal poverty level guidelines.  The MMMNA was $1,939 from July 1, 2013 until June 30, 2014, and has been increased to $1,966.25 from July 1, 2014 through June 30, 2015.

If certain basic household expenses are more than 30% of the MMMNA, which amounts to $589.66, the community spouse is entitled to keep extra income, known as the Excess Shelter Amount (“ESA”).  Between the MMMNA and the ESA, the community spouse can now be entitled to as keep as much as $2,931.00 of the married couple’s total income.  If even more income is needed, such as where the community spouse is living in an assisted living facility, the community spouse can request a fair hearing and attempt to prove the need for more than $2,931.00 of the married couple’s total income.  In some cases, the community spouse would need more than $2,931.00 due to the costs of an assisted living facility, but would be required at the fair hearing to prove the need to live there.

Utilizing the MMMNA provisions in Medicaid/MassHealth law is always better than purchasing an immediate annuity, since all payments from the annuity are treated as income, and taking that step ends up reducing the amount of the married couple’s retirement income that the community spouse could otherwise keep.  Unfortunately, due to the asset rules under Medicaid/MassHealth, in many situations the community spouse has no choice but to purchase an immediate annuity with excess assets. See Protecting Assets and Maximum Income in 2014 When Applying for MassHealth to Help Pay for the Unhealthy Spouse’s Nursing Home Bills.

 

What Is the Difference Between the MassHealth Lookback and Disqualification Periods?

by:   Brian E. Barreira, Esq.

The MassHealth lookback period is not the same thing as the MassHealth disqualification period. The MassHealth lookback period is a flat five (5) year period. When a MassHealth application is filed, the state MassHealth agency looks back at financial transactions for the five (5) years preceding the application date. Based on whatever the state MassHealth agency finds in the lookback period, a disqualification period can be imposed by the agency.

The MassHealth disqualification period is not five (5) years, but rather is calculated by the state MassHealth agency based on the facts of the application. The disqualification period is based on how much was given away during the lookback period, and is also based on how much the average Massachusetts nursing home costs at the time of the MassHealth application.

When a MassHealth application is filed, the lookback period is created. In some cases, there is a lengthy MassHealth disqualification period that could be avoided if the filing of the MassHealth application were delayed. Thus, a thorough understanding of the interaction between the MassHealth lookback and disqualification periods is needed before deciding when to file a MassHealth application.

What Is Considered to Be a Cure or Partial Cure by MassHealth?

by:   Brian E. Barreira, Esq.

When a disqualifying transfer (such as a gift) is made, a period of ineligibility from MassHealth can be caused. If the transfer is undone, and assets are returned, the period of ineligibility goes away. The return of gifted assets is known under federal Medicaid law and MassHealth regulation as a “cure.” If only part of what was given away is returned, that return of gifted assets is known as a “partial cure.”

Since the lookback period when filing a MassHealth application is five (5) years, any gift or below-market sale is not safe for the following five (5) years. Therefore, no gift or below-market sale should be made without considering whether a cure will be possible during that timeframe.

Under a peculiar wording of the MassHealth regulation that allows cures, there is a possibility that a cure or partial cure to a married couple can be done the wrong way. The regulation states that the return of the assets must go to the MassHealth applicant. A return of assets to the community (i.e., at-home) spouse can therefore be treated as an invalid cure, even if it was the community spouse who originally made the gift.

What Income Is Considered to Be Noncountable in the MassHealth Application Process?

by:   Brian E. Barreira, Esq.

Although most types of income are considered countable in the MassHealth application process, and are therefore required to be spent on the applicant’s care, there is a small category of income known as noncountable income that is not considered. Any income in this category of noncountable income must still be disclosed during the MassHealth application process, and failure to provide information can be grounds for a MassHealth denial.

Common examples of noncountable income are SSI benefit payments, Veteran’s Aid and Attendance benefits and Holocaust reparation payments. Often missed in the MassHealth application process is that accumulated savings of these types of noncountable income are considered noncountable assets that the MassHealth applicant is allowed to keep over and above the $2,000 that other MassHealth applicants are allowed to have.

Also included in the category of noncountable income are payments from reverse mortgages.

Should You Get a Second Opinion Before Buying Annuities?

by: Brian E. Barreira, Esq.

Many of my clients have been sold annuities that they thought helped their financial situation if nursing home care was needed in the future. Unfortunately, very few annuities help the situation, and some of them turn out to be financially disastrous. My opinions about the overannuitization of older persons in Massachusetts can be found on another blog of mine in the following posts:

Is It a Good Idea for an Elderly Person to Purchase a Deferred Annuity?

Is a Deferred Annuity Helpful from a Medicaid or MassHealth Standpoint?

You should take special caution whenever you walk into a bank, where they seem to be especially clueless (or commission-driven; make sure you ask how much the salesperson is making on the sale), so see the following posts:

Should You Buy a Deferred Annuity at a Bank?

Should You Ever Buy an Immediate Annuity at a Bank?

 

Should You Prepare and File a MassHealth Application on Your Own?

by: Brian E. Barreira, Esq.

Many people can file a MassHealth application on their own, but sometimes it makes sense to get help. The more complicated the applicant’s financial situation, the more it makes sense to get help from an independent professional.

For a person who is under age 65 and not in need of nursing home care, MassHealth eligibility is mostly based on the person’s income, so that type of MassHealth application process is usually fairly easy. If the MassHealth applicant is not under age 65, or if long-term care is needed, getting help is often necessary. In many cases, getting the assistance of an elder law attorney can be important.

A MassHealth applicant is limited to $2,000 in countable assets for some programs, and while it may be possible to transfer assets above that amount in order to become eligible, the transfer could make the applicant ineligible for nursing home coverage for 5 years. Thus, elder law advice can be important due to the mishmash of MassHealth programs that have different rules.

Elder law advice can also be important due to confusion about MassHealth rules among facilities and home care agencies. For example, the GAFC program that can help pay for assisted living can be accessed with a 6-month income deductible period, yet many assisted living facilities seem not to know about that possibility.

Submitting a MassHealth application to help cover nursing home costs without elder law advice can often be a bad idea. I often describe the MassHealth application process for nursing home care as “guilty until proven innocent.” MassHealth applications are closely scrutinized, with a lookback period of 5 years on all financial records. Gifts, below-market sales and unexplained financial transactions can cause problems; any unexplained or poorly-explained expenditure can be treated as a disqualifying transfer of assets, delaying MassHealth eligibility at a time when there are no remaining funds to pay for nursing home care. Trusts are often rejected without explanation. The application process can take several weeks or even months, while the MassHealth eligibility worker keeps asking questions and demanding further verifications.

Many elder law attorneys offer assistance with MassHealth applications as part of their services. Going this route can help you deal with difficult eligibility problems that can come up along the way and allow you to get advice on how to obtain MassHealth as quickly as possible. Payment for the elder law advice is often made with funds that would otherwise have been paid to the nursing home, so there is often no net loss to the family, and, in some cases, the elder law attorney can point out exceptions in the MassHealth law that allows assets to be preserved for the MassHealth applicant and the family.

Some nursing homes offer free help with the MassHealth application, or refer families to non-lawyers or companies that offer help for a fee. In those cases, you should not expect that the matter will be handled appropriately in all situations. One of my clients used a company that was referred by the nursing home, and learned that the company saw a problem with the application and overreacted; the company called the nursing home administrator, who then immediately sent out a discharge (i.e., eviction) notice to the nursing home resident who was not in debt and had enough funds to pay for a few months.

What Is a Fair Hearing under MassHealth, and Can You Really Expect It to Be Fair?

by: Brian E. Barreira, Esq.

If you apply for MassHealth (i.e., Medicaid in Massachusetts) and receive a denial, you are entitled to an “independent” review of the denial through a scheduled “fair hearing.” You have to file a written request for the fair hearing, and there are strict deadlines for you to file for it, usually within 30 days. There are also strict deadlines for the Board of Hearings to issue a decision on your case. Unfortunately, the time limits in MassHealth regulations are strictly held against you as the appellant, yet the Board of Hearings routinely and callously fails to issue timely decisions.

The deadline under MassHealth regulations for a decision to be rendered is usually 45 days from the time of filing the appeal. I recall having cases during the 2010-2012 time period where it took 4-5 months just for an appeal to be scheduled. Apparently, regulations are meant to be followed by MassHealth applicants, but not by the people involved in running the MassHealth program.

Not only is the fairness lacking in the strict procedures required under MassHealth regulations, but many Massachusetts elder law attorneys feel the deck is stacked against people who appeal MassHealth denials. While the MassHealth lawyers who defend fair hearing decisions in court often make a point of telling the judge about the independence of the Board of Hearings, the fact remains that the hearing officers work for the Office of Medicaid, which runs MassHealth, and their decisions are subject to review by the Director of the Office of Medicaid, who can order a rehearing. (That means you can win your appeal, and the person in charge of MassHealth can decide to overturn your victory.) Does it sound like the hearing officers are truly independent?

Fortunately, unfair decisions rendered by hearing officers can be overturned by the Superior Court in a further appeal commonly known as a 30A, but new evidence usually cannot be added after a fair hearing decision is written by a hearing officer. On appeal, the weight or amount of the evidence that was placed into the fair hearing record can be important. Therefore, if you are appealing a MassHealth denial, you need to place as much evidence as possible into the record to prove your point. You cannot assume that the hearing officer will write a decision that is fair, so you have to prepare for the fair hearing based on the assumption that you may later have to take the case to Superior Court and prove to a judge that the “fair hearing” decision was unfair.

How Does MassHealth Treat a Sale of a Life Estate in 2013?

by: Brian E. Barreira, Esq.

When a person who has a life estate wants to sell the real estate, the life tenant is legally entitled to a share of the proceeds.  The amount of the proceeds that the life tenant is supposed to receive is based on his/her life expectancy and interest rates at the time of sale.

To calculate the value of the life estate, you must first determine what the applicable interest rate is.  The interest rate in the month of the sale can be found at http://www.tigertables.com/7520.htm.  Once you have this figure, you then go to IRS Book Aleph at http://www.unclefed.com/IRS-Forms/2001/p1457.pdf and look in Table S for the page displaying tables with that interest rate.  Looking up the life tenant’s age on that page will get you the breakdown between the life tenant’s percentage interest in the proceeds and the other parties, who on that page are referred to as the “Remainder.”  For further explanation, including an example, see MassHealth Eligibility Operations Memo 07-18.

If the interest rates required to be used are below 2.2, different IRS tables need to be looked at, so in that situation go to http://www.irs.gov/irb/2011-38_IRB/ar06.html.

The life tenant’s share of the proceeds can be eligible for the $250,000 capital gains exclusion under Internal Revenue Code Section 121, but often the persons receiving the remainder do not live there and their proceeds are subject to capital gains taxation without the ability to use that exclusion.  Thus, it can often be advisable to wait until the life tenant’s death before selling real estate, so that the real estate will receive a step-up in basis under Internal Revenue Code Section 2036.

Note that the failure of the life tenant to receive the life tenant’s full share of the sale proceeds is considered a disqualifying transfer of assets under federal Medicaid law and MassHealth regulations, and is subject to the 5-year lookback period.

What Is the Excess Shelter Allowance When Filing a MassHealth Application in 2013-2014?

by: Brian E. Barreira, Esq.

When applying for MassHealth, the at-home spouse, known as the community spouse, is allowed to keep all of the community spouse’s own income, no matter how much that amount may be.  If the community spouse’s own income is below $1,939, however, the community spouse is allowed to divert income from the institutionalized spouse to get up to the $1,939 requirement of the current law.  (Note:  the $1,939 minimum monthly maintenance needs allowance —MMMNA— will likely increase on July 1, 2014.)

The $1,939 in income currently allowed for the community spouse can be increased if the community spouse’s housing expenses are high.  That increase is known as the Excess Shelter Allowance.   If the community spouse’s housing expenses are more than 30% of the MMMNA, (i.e., 30% of $1939, which comes to $582), then the additional income needed is referred to as the Excess Shelter Allowance, and ends up being an additional income allowance for the community spouse.

For some spouses, the increased income allowance can mean an increase in the community spouse resource allowance, which is the total amount of assets that the at-home spouse is allowed to keep. See Protecting Assets and Maximum Income for the Community Spouse When Applying for MassHealth in 2013 to Help Pay for the Unhealthy Spouse’s Nursing Home Bills in Massachusetts

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