Category Archives: MassHealth Application Process

Preserving Assets and Maximum Income for the Community Spouse When the Institutionalized Spouse Enters a Nursing Home

January 1, 2022 – 12:01 am

by: Brian E. Barreira, Esq.

When one spouse enters a nursing home and may be applying for MassHealth, the spouse who remains at home or in assisted living often has some important choices to make with an unbiased legal advisor.

One of the biggest mistakes that many spouses make when the other spouse enters a nursing home is not getting legal advice from an elder law attorney about Medicaid, known in Massachusetts as “MassHealth.” The “free” information that many community spouses (which under MassHealth law  means any spouse who is not in a nursing home) often rely on can turn out to be quite costly to them.

There are different layers in MassHealth law, and many persons only seem to know about the bottom layer, so let’s go over that one first. Under 2022 law, just about everything other than the home and car are totaled, and the community spouse supposedly can keep only the first $137,400.00.

Unfortunately, this lower layer is where the knowledge of many persons ends, and two other upper layers of the law effectively override the lower layer. One upper layer is that the community spouse can enter into certain types of annuity agreements with the spenddown (that is, excess) assets.

Before even thinking about using the annuity layer, however, the community spouse should keep three things in mind: (A) not every annuity will work; (B) the published regulations and unpublished internal procedures and policies which now allow such a move can change with little advance notice, so it is often not advisable that an annuity be purchased until the institutionalized spouse’s nursing home stay has already occurred; and most importantly (C) some community spouses can keep everything without needing an annuity, and are better off without an annuity, due to the other upper layer of MassHealth law that protects income for the community spouse.

At present, the community spouse has the absolute right to an income of at least 2,177.50 per month. This is known as the Minimum Monthly Maintenance Needs Allowance (“MMMNA”). If shelter expenses exceed 30% of this figure, or $653.25, or if a disabled child lives at home, the community spouse is often entitled to keep a higher MMMNA. If the Social Security and pension payable in the name of the community spouse is less than the $2,177.50 figure, at the end of the MassHealth application process the community spouse is allowed to keep some or all of the institutionalized spouse’s income to be brought up to the MMMNA.

If the needs of the community spouse are greater than $3,435.00 per month, a higher amount of income can sometimes be preserved for the community spouse via the fair hearing appeal process, where the need to keep the other assets has to be proved to maintain the financial ability to remain in the community.  A common situation where need can be fairly easily proved is where the community spouse is living in an assisted living facility and needs to be there due to frailty, medical condition or other special needs.   Once the need to be in assisted living is established, the appeal is primarily about numbers and prevailing interest rates, so the elder law attorney can often handle it alone without the community spouse having to go to the hearing.

Another option to retain greater income for the community spouse is a Probate Court procedure known as separate support.  Since both spouses need legal representation in court, it is important that the institutionalized spouse have a durable power of attorney that allows the appointed agent or attorney-in-fact to hire a lawyer.

When spenddown and appeal options are determined by an elder law attorney as potentially unsuccessful, the community spouse can often purchase certain types of immediate annuities, where the assets used to make the purchase then change character and are treated as the community spouse’s protected income.

One other option available to the community spouse, but not often done in Massachusetts, is known as spousal refusal, where the community spouse refuses to cooperate in the application and payment processes.

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By Brian E. Barreira | Also posted in Annuities, Preserving Assets & Income for the Spouse | Tagged , , , , , , , | Comments (0)

Minimum Monthly Maintenance Needs Allowance for Nursing Home Resident’s Spouse Is Now $2,002.50 until 6/30/2017

July 1, 2016 – 12:27 am

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 federal Medicaid 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 has now been increased to $2,002.50, effective July 1, 2016 and continuing through June 30, 2017.  (This MMMNA figure is the same in 48 states; Alaska and Hawaii have higher figures.)

The income calculation  for the community spouse does not end there.  If certain basic household expenses are more than 30% of the MMMNA, which is $600.75, the community spouse is entitled to keep an extra amount of the couple’s income.  This extra income is 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 $2,980.50 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 $2,980.50 of the married couple’s total income.  In some cases, the community spouse would need more than $2,980.50 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 with excess assets, since all payments from the annuity are treated as income, and taking that step ends up reducing the amount of the married couple’s 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.

 

By Brian E. Barreira | Also posted in Annuities, Fair Hearings, Preserving Assets & Income for the Spouse | Comments (0)

Lawyers at the Office of Medicaid Attempt to Mislead Hearing Officers and Judges about Federal Medicaid Trust Law

November 19, 2015 – 5:45 pm

by: Brian E. Barreira, Esq.

The Office of Medicaid makes a willful, reckless misrepresentation of law to the extent that it suggests that all state trust law is to be ignored in the determination of eligibility for Medicaid benefits for long term care.  Current federal Medicaid law (42 USC §1396p(d)) and Massachusetts MassHealth regulations (130 CMR 520.021-520.024) address the treatment of trusts in the Medicaid arena, and they do not state or even imply that all state trust laws or the common law of trusts are to be ignored.

Under the 1985 changes in federal Medicaid trust law, a door had been left open whereby a provision could be placed in the trust limiting trustee discretion in some circumstances; the 1993 federal Medicaid law at 42 USC 1396p(d)(2)(C) corrected that problem, and specifies four (and only four) aspects of state trust law (often referred to by the Defendant as the “common law of  trusts”) that may be ignored in determining an applicant’s Medicaid eligibility:

“(i) the purposes for which a trust is established,

(ii) whether the trustees have or exercise any discretion under the trust,

(iii) any restrictions on when or whether distributions may be made from the trust, or

(iv) any restrictions on the use of distributions from the trust.”

These 1993 changes in federal Medicaid trust law ended the tactical usage of shifting trustee discretion to obtain Medicaid coverage. The 1985 Congressional intention of authorizing scrutiny of irrevocable trusts under state debtor-creditor laws remained unchanged when the 1993 changes were made, and there have been no further changes in federal Medicaid trust law since that time.

Other than these four exceptions in 42 USC 1396p(d)(2)(C), all Massachusetts trust law applies to an Irrevocable Trust in a MassHealth application.  The United States Court of Appeals for the Third Circuit has already examined Congressional intent in this context, and concluded:  “Congress rigorously dictates what assets shall count and what assets shall not count toward Medicaid eligibility.  State law obviously plays a role in determining ownership, property rights, and similar matters.” Lewis v. Alexander, 685 F.3d 325, 334 (3d Cir. 2012) “[T]here is no reason to believe [Congress] abrogated States’ general laws of trusts.  … After all, Congress did not pass a federal body of trust law, estate law, or property law when enacting Medicaid.  It relied and continues to rely on state laws governing such issues.” Lewis at 343.

The Office of Medicaid continually attempts to mislead hearing officers at MassHealth fair hearings and judges in Superior Court appeals by emphasizing yet decontextualizing the phrase “any circumstances” in the 1993 federal Medicaid trust law, when in fact since 1993 these four circumstances in 42 USC 1396p(d)(2)(C) have been the only “circumstances” addressed by the federal Medicaid trust law wherein state trust law is to be ignored.

By Brian E. Barreira | Also posted in Fair Hearings, Irrevocable Trusts, MassHealth Denials and Appeals, Superior Court and Appeals Court Appeals | Tagged , , , , , , , | Comments (0)

Does the MassHealth Program Have a Home Equity Limitation?

November 14, 2015 – 2:47 pm

by: Brian E. Barreira, Esq.

In general, a MassHealth applicant can keep ownership of the person’s home (although it will be subject to a lifetime lien, allowing MassHealth to get reimbursed on a sale during lifetime, and the person’s probate estate will be subject to an estate recovery claim, making MassHealth reimbursement very close to first in line after the probate estate’s sale of the home). Under 2006 changes in federal Medicaid law, some applicants can keep a home of any value, including the MassHealth applicant’s spouse. There is, however, a limit on how much home equity a MassHealth applicant can retain.  When this law took effect, the limit in Massachusetts was $750,000.00, but due to being indexed for inflation, the 2015 limit is now $828,000.00.

If the MassHealth applicant’s home equity exceeds the annual limitation, the equity limit can be dealt with through bank mortgages and personal loans, which must meet stringent MassHealth requirements.

By Brian E. Barreira | Also posted in Estate Recovery, Real Estate Liens | Tagged | Comments (0)

What Is the Excess Shelter Allowance When Filing a MassHealth Application in 2015-2016?

November 10, 2015 – 10:39 am

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 $1,991.25, however, the community spouse is allowed to divert income from the institutionalized spouse to get up to the $1,991.25 requirement of the current law.  (Note:  the $1,991.25 minimum monthly maintenance needs allowance —MMMNA— will likely increase on July 1, 2016.)

The $1,991.25 in income currently allowed for the community spouse can be increased beyond that figure 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 $1991.25, which comes to $597.38), 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.

By Brian E. Barreira | Also posted in Fair Hearings, Preserving Assets & Income for the Spouse | Tagged , , , , | Comments (0)

Minimum Monthly Maintenance Needs Allowance for Nursing Home Resident’s Spouse Is Now $1,991.25 until 6/30/2016

November 5, 2015 – 6:26 pm

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 is $1,991.25 from July 1, 2015 through June 30, 2016.

If certain basic household expenses are more than 30% of the MMMNA, which amounts to $597.38, 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 $2,980.50 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 $2,980.50 of the married couple’s total income.  In some cases, the community spouse would need more than $2,980.50 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 purchasing an annuity 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 realistic choice but to purchase an immediate annuity with excess assets.

By Brian E. Barreira | Also posted in Annuities, Fair Hearings, Preserving Assets & Income for the Spouse | Tagged , , , , , , , , , | Comments (0)

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

August 27, 2014 – 8:50 pm

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.

 

By Brian E. Barreira | Also posted in Annuities, Fair Hearings, Preserving Assets & Income for the Spouse | Comments (0)

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

November 4, 2013 – 12:59 pm

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.

By Brian E. Barreira | Also posted in Gifts & Disqualifying Transfers | Comments (1)

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

October 29, 2013 – 8:55 pm

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.

By Brian E. Barreira | Also posted in Gifts & Disqualifying Transfers | Tagged | Comments (1)

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

October 28, 2013 – 2:23 pm

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.

By Brian E. Barreira | Tagged , , , , | Comments (2)