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LEGISLATIVE BILLS AFFECTING SENIORS
Right now our legislators have before them several bills that affect the finances of the seniors in Massachusetts. Some of these bills serve to reverse some of the cuts that were made in 2003, while others, if passed, will make technical corrections that are long overdue. Over the next few weeks, I will discuss these bills in more detail and keep you advised of the progress in the legislature.
The following is the current list of bills which have been introduced before the legislature, together with the name of the sponsors. I have asked all of your legislators to “sign on” to each of these bills and to support their passage through the legislature. I am asking that each of you take a few minutes out of your day to call your legislators and ask them which, if any, of these very important bills they will support.
· Income First - Representative Doug Peterson and Senator Mark Montigny
· Community Spouse Resource Allowance - Representative Frank Smizik and Senator Mark Montigny
· Transfer of Assets Waiver Repeal - Representative Frank Hynes and Senator Robert Creedon
· Long Term Care Insurance & Estate Recovery - Representative Kathleen Teahan
· Personal Needs Allowance Restoration - Representative Ann Paulson and Senator Steve Panagiotakos
· Long Term Care Public Education Program - Representative Ruth Balser
SUMMARY OF THE PROPOSED BILLS:
Income First - On September 1, 2003 Massachusetts changed from an asset first state to an income first state. This change affects primarily elderly women who have placed their spouse in a nursing home. The change has made it extremely difficult for these women, who have very little income, to be allowed to keep additional assets in order to be able to afford to continue to live in their home. To make matters worse, it is being applied in a manner that has been deemed to be illegal by a federal court in New York. There is a pending law suit against the Commonwealth of Massachusetts by several member lawyers of the Massachusetts Chapter of the National Academy of Elder Law Attorneys. This new bill would revert Massachusetts to an asset first state and would allow elderly women who have placed their spouse in a nursing home to be allowed to keep additional assets to allow them to afford to remain in the community.
Community Spouse Resource Allowance - On January 1, 2003 the Commonwealth of Massachusetts changed from allowing the maximum amount under federal law to be retained by someone who needs to place their spouse in a nursing home to the minimum amount. In round numbers, the law prior to January 1, 2003, said that if you needed to put your spouse in a nursing home, you could keep the first $90,000 of your assets. After January 1, 2003, if you needed to put your spouse in a nursing home, you can only keep one-half of your assets, up to $90,000. Under this new law if you have $90,000, you may only keep $45,000. The purpose of this new bill, currently before the legislature, is to restore the limits to the pre January 1, 2003 level and allow the spouse at home to go back to being able to keep the 1st $90,000 of their assets.
Transfer of Assets Waiver Repeal - On August 28, 2003, your Governor Mitt Romney requested a waiver from the Federal Government concerning Medicaid rules. He basically said that he does not like parts of the Federal law concerning Medicaid and wants to make up his own rules. The purpose of these new rules would be to severely punish anyone who makes a gift and later needs nursing home care. Under his proposed plan, any gifts you make during the five-year period (ten-years if you use a trust) prior to entering a nursing home will be treated as though you made them after entering the nursing home. Since the gifts are treated as though you just made them, you will be disqualified from benefits from that date forward. It doesn’t matter whether the gift was use by your grandson for college and is no longer available to be returned to you. You will be disqualified and have to private pay for your nursing home care. Where will the money come from? This is different from the current rules that say the disqualification period starts on the date of the gift.
Long Term Care Insurance & Estate Recovery - This is a bill that needs to be passed. On October 2, 2003 I reported about a trap for the unwary who purchase long-term care insurance. The Public Policy department of the Massachusetts Chapter of the National Academy of Elder Law Attorneys has been working on this for over a year, with no results, at least up to now. One of the main incentives for purchasing a long-term care insurance policy is that it will protect your home if you need to go to a nursing home. To protect your home, your long-term care insurance policy must provide benefits for at least a two-year period. Many long-term care insurance policies offer home care as well as nursing home care. Here is the problem, if you use one day of home care and then go to the nursing home, your long term care insurance policy will not protect your home because on the day you enter the nursing home, you will have already used one day of your two year benefit, and as already stated, you must have two years of coverage remaining to be protected. This bill would ensure that your home is protected if you purchase long-term care insurance.
Personal Needs Allowance Restoration – When someone needs to go to a nursing home they are allowed to keep $60.00 per month out of their income to pay for their personal needs such as clothes, shoes, dental and podiatry. The $60 amount has been in place for over a decade and has not been increased, but over the last ten years the purchasing power has obviously been decreased due to inflation. The request is that it be increased to $72.80 with a cost of living increase each year. Adjusting the original $60 amount for inflation arrives at the $72.80 figure.
Long Term Care Public Education Program – The workings of the Medicare and MassHealth (Medicaid) programs are difficult for many people to understand. My experience is that many families get their information from other families at a nursing home and unfortunately, many times this information is not correct. Under this program, the Department of Elder Affairs will develop a program of public education designed to inform elders of their options for long-term health care coverage. Said program shall include information about the following topics: Medicare plans, benefits and coverage; MassHealth institutional care and the alternatives for receipt of community-based care; income and asset criteria for MassHealth long-term care, including information about home ownership, estate recovery and transfer of assets; and long-term care insurance policies including limits on coverage, suitability standards and protection of assets from MassHealth estate recovery.
This article gives general information and not specific advice on individual matters. Persons wanting individualized advice on matters discussed should contact an advisor experienced in those matters. To the extent this article provides information on legal matters, it is based on law in effect in Massachusetts on the date of posting (laws in effect in other states are often quite different).
Ronald H. Surabian is a CPA and attorney who works at the Elder Law Center in Saugus, Massachusetts. He also holds a masters in accounting and a masters in tax law. He currently serves on the board of directors of the Massachusetts Chapter of the National Academy of Elder Law Attorneys. If you have any questions please call me at the Elder Law Center, One Essex Street, Saugus, MA 01906 (781)233-4444. To view this or any prior article, please visit our web site at www.elderlawcenter.org