Category Archives: MassHealth Application Process

Should You Get a Second Opinion Before Buying Annuities?

October 1, 2013 – 11:32 am

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?

 

By Brian E. Barreira | Also posted in Annuities, Preserving Assets & Income for the Spouse | Tagged , , , | Comments (1)

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

September 19, 2013 – 2:48 pm

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.

By Brian E. Barreira | Also posted in Gifts & Disqualifying Transfers, MassHealth Denials and Appeals, Permissible Transfers | Comments (2)

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

September 5, 2013 – 11:22 am

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.

By Brian E. Barreira | Also posted in Fair Hearings, MassHealth Denials and Appeals | Tagged , , , , | Comments (2)

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

August 20, 2013 – 10:47 am

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.

By Brian E. Barreira | Also posted in Gifts & Disqualifying Transfers, Protecting the Home, Real Estate Liens, Tax Issues | Tagged , , , , , , | Comments (0)

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

August 6, 2013 – 12:20 pm

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

By Brian E. Barreira | Also posted in Preserving Assets & Income for the Spouse | Tagged , , , , | Comments (1)

What Is a Pooled Trust?

July 16, 2013 – 11:08 am

by: Brian E. Barreira, Esq.

A pooled trust is a special needs trust where the funds of many people are pooled in one account for investment purposes. The overall goal of a pooled trust is to provide financial security to all people with disabilities, and a higher quality of life. A pooled trust can provide for the future needs of disabled persons while allowing them to remain eligible for government benefits such as MassHealth and Supplemental Security Income (SSI). Placing money into it is not considered to be a disqualifying transfer under MassHealth or SSI law, and a pooled trust account can be funded even after a MassHealth application has been filed.

Some governmental benefit programs, including MassHealth, will only pay for a person’s primary living needs, such as food, housing, and basic medical care. Where MassHealth only allows a nursing home resident to keep $2,000 in assets, it can be difficult to maintain a dignified lifestyle in the nursing home. A pooled trust account can be used to pay for extra things for the nursing home resident.

A person with a disability who receives even a modest amount from a gift, inheritance or court settlement may no longer be eligible for MassHealth or other government benefits, but if those funds are quickly placed into a pooled trust, those government benefits can be preserved.

After the pooled trust account is funded, it is then the responsibility of the trust to ensure that the funds will not be spent in a way that could jeopardize the beneficiary’s eligibility for government benefits. The pooled trust can provide a source of funds that can be used to pay for supplemental needs. Some of the types of special, supplemental, non-support disbursements that are appropriate can be: health and dental treatment and equipment for which there are not funds otherwise available; rehabilitative and occupational therapy services; medical procedures, even though not medically necessary or lifesaving; medical insurance premiums; supplemental nursing care; supplemental dietary needs; diapers; eyeglasses; travel; entertainment; companionship; private case management; cultural experiences; vacations; movies; telephone service; television and cable equipment and services; radios; stereos; training and education programs; and reading and educational materials.

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

Minimum Monthly Maintenance Needs Allowance for Nursing Home Resident’s Spouse Is Now $1,939 until 6/30/2014

July 5, 2013 – 9:17 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 $1,891 from July 1, 2012 until June 30, 2013, and it will increase from $1,891 to $1,939 from July 1, 2013 through June 30, 2014.

If certain basic household expenses are more than 30% of the MMMNA, which amounts to $582, 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 $2,898 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 $2,898 of the married couple’s total income.

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 for the Community Spouse When Applying for MassHealth in 2013 to Help Pay for the Unhealthy Spouse’s Nursing Home Bills in Massachusetts.

By Brian E. Barreira | Also posted in Annuities, Fair Hearings, Preserving Assets & Income for the Spouse | Comments (1)

Should an Appeal Be Filed If a Denial for MassHealth Long Term Care Is Received?

August 21, 2012 – 10:24 am

by: Brian E. Barreira, Esq.

Usually when a MassHealth denial is received, it makes sense to file an appeal within 30 days of the denial date.  To have proof that you appealed timely, it is advisable that the appeal be sent via fax to the Board of Hearings.

In many cases, receiving a MassHealth denial means that the MassHealth eligibility worker requested something (known in MassHealth lingo as a “verification”) and did not receive it on a timely basis.  In those situations, submitting a missing verification during the following 30 days is treated as a new application for MassHealth.  Since a MassHealth application is retroactive for no more than 3-4 months, it is important to determine whether the new application will go back far enough.  If not, an appeal should be filed, and if all of the missing verifications are submitted at an appeal, the original application date will be preserved.

If a denial is received for any reason other than missing verifications, filing an appeal may or may not help the situation.  If there were disqualifying transfers, sometimes an appeal would be futile and a return of the assets to the MassHealth applicant makes more sense.  Sometimes, the denial refers to excess assets and there are financial steps that can be taken to “spend down” the excess assets.

What I have been seeing a lot of lately is a denial that is the result of an overworked MassHealth eligibility worker’s mistake.   This is also a just plain ridiculously stupid MassHealth process now in place, where you send your documents to MassHealth on a timely basis, then MassHealth sends the documents out to be scanned for electronic storage and doesn’t let the eligibility worker know when the documents were received, so the worker issues a denial because the worker doesn’t receive the scanned documents back on time.

When a denial is received and you file an appeal, MassHealth’s own regulations require that most appeals be heard and decided within 45 days.  Unfortunately, at present, it now takes the Board of Hearings 4-5 months just to schedule an appeal.  Nursing homes, which are not being paid during that time, are sometimes filing lawsuits against MassHealth applicants and their families before they even get a chance to have their appeal heard.  Thus, when you receive a MassHealth denial for any reason whatsoever, attaining the services of an elder law attorney within the following 2-3 weeks is now extremely important.  It shouldn’t be that way, but the MassHealth system seems to be out of control at this point.

By Brian E. Barreira | Also posted in MassHealth Denials and Appeals | Tagged , , , , , , , , | Comments (1)

When Are a MassHealth Applicant’s Intentions Considered in Determining Whether a Disqualifying Transfer Occurred?

June 15, 2012 – 11:53 am

by: Brian E. Barreira, Esq.

There are many exceptions to disqualifying transfers in federal Medicaid law that the MassHealth program has been required to implement.   If a potential disqualifying does not fit into the categories of permissible transfers, then MassHealth is required to determine what the MassHealth applicant’s intentions were when the transfer occurred.

One exception to a disqualifying transfer occurs when the MassHealth applicant had made the transfer exclusively for a purpose other than obtaining MassHealth eligibility.  This one situation where ignorance of the law can be an excuse for what was done.  Unfortunately, anybody can claim that he/she didn’t know about the law, so hearing officers expect a compelling case to be made, and if there is even a hint of MassHealth planning or knowledge, they can easily rule against the MassHealth applicant.

Another expectation to a disqualifying transfer involves an attempt to receive fair market value or other valuable consideration.

By Brian E. Barreira | Also posted in Gifts & Disqualifying Transfers, MassHealth Denials and Appeals, Permissible Transfers | Tagged , , , , , , , , | Comments (1)