With so much at stake, planning — and paying — for long-term care services such as assisted living or nursing home stays can be a confusing and anxiety-ridden process. Medicaid (known as MassHealth in Massachusetts) provides coverage for long-term care costs, including comprehensive coverage for skilled nursing home care and supplemental coverage for the cost of assisted living and home health care, but there are some common misconceptions about what MassHeath does and does not cover and who is eligible.
Here are five of the most common misconceptions we hear from our clients about MassHealth:
Myth #1 – My house is in a trust, so it’s protected from a MassHealth lien and estate recovery.
Reality: A house that is in an irrevocable trust designed by an attorney specifically to protect the property for MassHealth planning purposes that was executed recently may be protected from a MassHealth lien and estate recovery.
Very often, people create revocable trusts or realty trusts for their homes. These types of trusts are designed to reduce estate taxes and simplify estate administration by minimizing probate. Although these trusts can be useful estate planning tools, they do not protect your house from a MassHealth lien or from estate recovery. In addition, the agency has changed its policy on how it views irrevocable income-only trusts over the past ten years or so. So, even if you have created an irrevocable trust and transferred your home into it, the agency may try to treat the home as countable even after five years if the trust contains certain provisions.
If you have a revocable or realty trust, it is likely that your house is not protected for MassHealth planning purposes. And, if you created an irrevocable trust before 2010, or did not use an elder law attorney to draft the irrevocable trust specifically for MassHealth planning purposes, you should have it reviewed.
Myth #2 – I won’t get to choose from the best, top-rated nursing homes if I enroll in MassHealth because MassHealth only covers care in certain nursing homes.
Reality: Nearly every nursing home in Massachusetts accepts MassHealth. However, it is important to be able to pay privately for at least a few months to facilitate placement while you’re applying for MassHealth.
Myth #3 – MassHealth only covers the cost of a nursing home and there is no assistance for in-home care.
Reality: Massachusetts offers many programs that can provide assistance with the cost of care at home, including programs that pay family members to care for their parents. There are also several programs available to assist with the cost of assisted living. The rules for eligibility and the programs available depend on many factors, including where the individual lives and her clinical needs. The rules for eligibility are also entirely different from those for MassHealth coverage of a skilled nursing facility.
Myth #4 – My spouse needs to go to a nursing home, but I know he will not qualify for assistance because we have too much money in savings to be eligible for MassHealth and there is a five-year lookback.
Reality: People who haven't done any MassHealth or long-term care planning should always consult with an elder care attorney before making a move to a nursing home with such significant financial ramifications. For example, it may be possible to use a MassHealth qualifying annuity to create immediate eligibility for the spouse moving to a nursing home with no “five-year lookback,” or your family could have a circumstance that qualifies for an exception to the transfer rules, such as a transfer to a disabled individual.
Myth #5 – I’ve given up my job and lived and cared for my mother for several years. Now that she needs to go to a nursing home, I’ll be forced to sell our home to pay for her care and I will have nowhere to live.
Reality: Although there is a five-year look back for transfer of assets to a non-spouse, there’s a possibility you could qualify for the “caretaker child” exception if you’ve been taking care of your parent for at least two years and you have helped to keep him out of a nursing home. If you do qualify, your parent can transfer the house to you with no penalty and become eligible for MassHealth.
Bottom Line: If you or your loved one needs long-term care in a nursing home or in the community, it is well worth the small investment to consult with an elder law attorney, so you are well-informed about your options.