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May 11, 2006
Mass House Ignores Rights of Seniors
On Thursday, April 27, 2006 the Massachusetts House of Representatives voted in favor of this year’s budget omitting virtually all amendments favoring seniors. Why is it, that since 2003 our legislators have made one cut after another slashing at the heart of the finances of seniors? Could it be that our current population of seniors is unwilling or unable to make waves about all the cuts against seniors? Have you ever called your Senator or Representative and told them that you are sick of the unyielding attack on the finances of seniors? Here’s the latest;
For seniors, the killer part of the budget passed by the Massachusetts House was the omission of the proposed increase in the Community Spouse Resource Allowance(CSRA).
WHAT IS THE CSRA? – The CSRA is the amount of money a married couple may keep if one of them needs nursing home care. A few years ago we had a much better rule, It said that if one spouse needs nursing home care, they could keep about the first $90,000 of assets. Under the rule of our kind and caring Governor Romney, this amount has been reduced drastically. In order to keep all of your assets you must have less than $19,000. If you have more than $19,000, you are entitled to keep one-half of your assets up to about $99,000. This maximum amount is adjusted each year for inflation.
WHY IS IT IMPORTANT? – Seniors face a never ending cost of living increase. Gas, oil, water, taxes… the list goes on, a difficult proposition when living on a fixed income. The idea that a married couple who has about $40,000 is considered to have too much money if one spouse needs nursing home care is upsetting to me. The spouse remaining at home not only has to pay the normal and routine living expenses but also has to pay for many of the household chores that her husband used to take care of.
The victims are seniors that can no longer afford to stay in their home. For seniors facing a negative monthly cash flow, it is only a matter of time until they can no longer afford to keep their home. Once this happens, some seniors end up entering nursing homes sooner, rather than later.
THE CHANGE REQUESTED – What we had requested is plain and simple. If one spouse needs nursing home care, let the healthy spouse keep the first $99,000. This was the rule in effect prior to 2003 and we wish to go back to it.
THE NEXT STEP – The Senate will now take up the budget. We are hopeful that the Senate will adopt the CSRA increase in their budget. Now is the time for you to call your Senator and ask that the CSRA increase be included in the budget.
More MassHealth News
Massachusetts has not yet adopted the most recent federal Medicaid changes. On May 3, 2006 a legislative briefing was held at the State House by MassHealth regarding when the new Medicaid regulations will be adopted by MassHealth. These changes relate to transactions occurring after February 8, 2006, the date that President Bush signed the Deficit Reduction Act.
Medicaid is a federal law that is administered by each state. In order for this federal law to become effective in a particular state, that state must adopt regulations to implement the law. At the May 3rd meeting, MassHealth said that they intend to issue “emergency” regulations within the next two weeks to adopt the transfer of asset regulations that affect seniors who make gifts within 5 years of needing nursing home care.
The worst provision of the Deficit Reduction Act says that any gifts made by a senior within 5 years of entering a nursing home must be returned to the senior and paid over to the nursing home. These new transfer of asset regulations increase the look-back period from 3 years to 5 years and establish a delay in the start date for the disqualification period for having made a gift. Together, these two provisions mean that gifts made within 5 years of entering a nursing home must be given back and paid to the nursing home.
The other part of these new “emergency” regulations will add a new restriction for seniors saying that if your spouse enters a nursing home, he will not be eligible for benefits if the fair market value of your home exceeds $750,000. This will particularly hit hard here in the east where skyrocketing home values have pushed the value of many homes over $750,000.
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