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MassHealth (Medicaid) is what pays for nursing home and long-term care. Applying for MassHealth can be a very time consuming process. Timing is critical in order to get coverage for the desired date. If you are financially eligible, you may go back for up to three months for retroactive coverage.
For a list of the documentation that you need to provide to us in order to prepare a MassHealth (Medicaid) Long-Term Care Application, Click Here
Frequently, entrance to a nursing begins after an elder has been hospitalized. If there is a three night stay in the hospital, the first part of the nursing home bill will be paid by Medicare. Medicare will pay for up to 100 days of nursing home care. Day 1 through 20 are paid in full and day 21 through day 100 are subject to a $124 per day co-payment($119 is the co-payment/day for 2006). Many times other insurance, like Blue Cross Blue Shield/Medex will pay the co-payment. If you have a supplemental health insurance plan, you should call them and ask if they cover the skilled nursing home co-payment under Medicare. Medicare will pay for up to 100 days as long as the patient shows signs of improving. A steady or declining health status can immediately stop the Medicare benefits, at which time you either start privately paying or seek MassHealth (Medicaid) coverage.
If an elder enters a nursing home directly from home, they must either private pay or apply for MassHealth. If they have applied for MassHealth they are what we call, Medicaid pending. Although the nursing home may not bill for this period during which the application is pending, we in many cases calculate what we feel is going to be the patient paid amount and have the elder pay this amount monthly, until the application is approved.
The patient paid amount is the amount of the elders monthly income that will end up being paid to the nursing home for each month or part thereof that the elder is in the nursing home. In general this monthly amount is calculated by subtracting from the elder's MONTHLY GROSS INCOME, $72.80 (known as the personal needs amount) and any health insurance premiums for secondary health insurance, if any.
EXAMPLE: Tom is going to a nursing home. He has $800 per month social security and a pension. His gross monthly pension is $300 but he has $100 withheld for income taxes and $50 for health insurance. His monthly patient paid amount would be calculated as follows:
Gross Monthly Income:
Social Security $800
Pension $300
subtotal $1,100
Less:
Personal Needs allowance $72.80
Health insurance $50
Patient Paid Amount $977.20
($1,100-$72.80-$50=$977.20)
For many years the asset limit for a married couple was about $90,000, plus the home and a car. Your Governor decided that that was too much, so he reduced it effective January1, 2003 to the lesser of one-half of your assets or, about $90,000. For the year 2005, the amount as adjusted for inflation is $97,100. If a married couples assets amounted to $90,000, they were allowed to keep one-half or $45,000. The asset limit for a single individual has been frozen at less than $2,000 for many years. Currently, married couples may keep the first $104,400 instead of the prior rule of one-half.
Don't forget to check for life insurance. If an elder has a life insurance policy (or policies) and the total face value of those policies are more than $1,500, their cash surrender value is counted as an asset.
Once you look at the verification checklist available above, you need to get to work and start looking for all of the documents mentioned. Usually the most important things are the financial ones. MassHealth can ask for bank statements for the last five years. Any large deposit or withdrawal over $500 must be explained with documentation, also know as a verification. Some MassHealth workers are now asking for copies of EVERY check written for the last 5 years, regardless of the amount. They are looking for birthday gifts, Christmas gifts..., with the intent to disqualify the applicants for any gifts that they find that are dated after February 8, 2006. Take a look at my August 2, 2007 article Santa Claus Is Dead for more information.
When looking for financial verifications, be sure to value all of the assets at the "Snapshot Date". This is the first date of constant institutionalization. For many, this is the day that they went into the hospital prior to entering the nursing home. For married couples this date is very important because it is the amount of assets on that date, that will determine how much important. What is important for single people is that they have less than $2,000 to be eligible for MassHealth.
Once the total assets are determined, we now turn out attention to the income and expenses of the applicant. For single people, accurately knowing the income, expenses and assets of the person will allow us to develop a plan of gifting that will allow the maximum amount of transfers to be made to family members, while still leaving enough assets behind to pay for the disqualification period for having made the gifts. In the trade, we call this a "half-a-loaf". Please note, efective Februrary 8, 2006, the Half-A-Loaf is no longer an accepted method of gifting and will result in the elder being denied for MassHealth benefits.
For married couples who have one spouse in a nursing home, the planning gets a little more involved. For couples that have excess assets ( more than $104,400) our goal is to allow the spouse living at home to keep as much of those assets as possible. Historically, this meant that we would file for a hearing to allow her to keep additional assets in excess of what is allowed under the regulations. If we are unable to keep additional assets, something needs to be done with those excess assets or they will end up being paid to the nursing home.
Parents who try to get money to their children by making loans that are really gifts because of unrealistic repayment terms including self-canceling notes upon death are affected by the changes made by the DRA. Click Here to learn more.
Currently, one of the most popular methods of protecting the excess assets involves the use of annuities. What in effect is happening is that excess assets are being converted into income of the spouse that is living at home, and income of the spouse at home is disregarded for eligibility purposes. The DRA has also impacted the use of annuities requiring the state to be named as a secondary beneficiary, unless the annuity is owned by and being paid to the community spouse. The community spouse is the spouse that remains living in their home, when the other spouse has been place in a nursing home (institutionalized spouse).
Please be advised that there are many rules and exceptions to the rules that I have not mentioned in this introduction to MassHealth. The rules are constantly changing and when they change, there is no grandfathering. If you have an old trust that used to be fine and the law changes, the law will be applied retroactively, and that may produce unexpected results.
NEW MASSHEALTH REGULATIONS
On July 1, 2006, the new "emergency" regulations were issued by the Division of Medical Assistance. The regulations state that they will be applied retroactively and will affect many individuals that have transferred assets after February 8, 2006, the date the Deficit Reduction Act (DRA) was signed.
To read the new DRA regulations issued on July 1, 2006 that show what the old regulations were and how they were changed, CLICK HERE. I am in the process of analyzing these new regulations and will have a summary prepared within the next week.
July 27, 2006 - The Federal Government, through the Centers for Medicare and Medicaid Services (CMS), has issued guidance on the implementation of the Deficit Reduction Act (DRA) to the states.
States are bound to follow these guidance materials that cover items such as:
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What happens when you make a gift?
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What happens if you buy an annuity?
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What happens if your home is worth too much?
To view these CMS transmittals, choose one of the following:
Transmittal letter to state Medicaid Directors