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July 20, 2006
HOW THE NEW MEDICAID RULES AFFECT YOUR HOME
Last week I told you about MassHealth issuing “emergency” regulations to implement the changes brought about by President Bush signing the Deficit Reduction Act (DRA) and Governor Romney’s veto of Section 58 of the fiscal year 2007 budget. This week we’ll take a look at how these changes affect your home if you ever need nursing home care.
But first, I urge you to contact your Senators and Representatives and ask them to support overriding the veto of Section 58. This section would restore the amount of money that a spouse could keep if their spouse needed nursing home care to the pre-2003 levels. Here’s an example:
Example: Mary and Bob are married. They own a home and have $40,000 in savings. Bob has a stroke and needs nursing home care.
Current Rule: Mary has too much money to qualify Bob for MassHealth. She is only entitled to one-half of her assets and must spend down $20,000 in order to qualify.
Proposed Rule: Mary could keep all $40,000 and Bob would be eligible for MassHealth. This rule, that was in effect prior to 2003, was much simpler. A married couple could keep the 1st $99,000 of their assets instead of one-half, up to $99,000.
MASSHEALTH AND YOUR HOME What happens to your home if you need nursing home care? This is a frequent question that I often hear. The answer depends upon whether you are married, who continues to live in your home and now, under the new regulations, how much your home is worth.
Regulation 520.007(G)(3) says that for long term care applications filed after 1-1-06, if the equity in your home exceeds $750 thousand you are not eligible unless one of the following resides in your home:
· Your spouse,
· A child under age 21 or permanently and totally disabled.
Regulation 520.007(G)(8) adds three additional occupants of your home that can make your home non-countable, they are:
· A sibling who has an ownership interest in the home and has been living there for at least one year prior to going to a nursing home.
· A caregiver child. A caregiver child is a child that has lived with the elder for at least 2 years and has provided care that has kept their parent out of a nursing home.
· A dependent relative. A dependent relative is a relative who has any kind of medical, financial or other dependency.
Let’s take the simple case first, a single person with their home as their only asset. If it is going to be a short stay in the nursing home and you have the expectation of returning home, the home is a non-countable asset. The new regulations add an extra test, and that is, if the home is worth over $750 thousand, you are not eligible. If it is going to be a long stay in the nursing home, your home would have to be sold. Once you had spent down to less than $2,000 you would be eligible.
If you are married and your spouse lives in the home, it is a non-countable asset, even if the equity in the home is more than $750,000. Thus, for married couples, the rules have not changed the protected status of the home when one spouse continues to live there.
Next week I will review the drastic changes to the rules dealing with gifts.
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 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