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September 22, 2005
JUST SAY NO
Back in 1988 Congress passed the Medicare Catastrophic Coverage Act of 1988 to overhaul the manner in which federal law treated the situation where one spouse needed nursing home care. The legislation sought to end the pauperization of the healthy spouse “by assuring that the community spouse has a sufficient-but not excessive- amount of income and resources available to her while her spouse is in a nursing home at Medicaid expense.”
Medicaid in Massachusetts is called MassHealth. This is a federal law that is administered by each state in a slightly different fashion. These Medicaid funds are available to each state that complies with the federal law. In the case of conflict between the federal law and the state regulations, federal law governs.
When one spouse needs nursing home care, the assets of both spouses are counted to determine eligibility for Medicaid. Currently in Massachusetts, the healthy spouse is allowed to keep one half of her assets up to about $95,000. Excess assets must be spent down before the institutionalized spouse is eligible for MassHealth benefits.
The 1988 Act also made a provision for when the nursing home spouse is unable to provide information regarding his assets. In this case, the nursing home resident will be eligible for benefits, even if his assets are not disclosed as long as any of the following three conditions are met:
Ø The nursing home spouse assigns any rights of support from his wife to the state.
Ø The nursing home spouse lacks the ability to assign his rights due to physical or mental impairment, or
Ø The denial of MassHealth benefits would cause an undue hardship
Just a month ago, Massachusetts Superior Court Case #04-1418 was decided. It is the first case in Massachusetts about something called “Spousal Refusal”, also known as “Just Say No”.
The issue of the case was: What happens when one spouse enters a nursing home and is denied MassHealth (Medicaid) coverage because the spouse at home refuses to cooperate in providing financial information needed to determine his eligibility? She just says no.
In this case, the husband had advanced dementia and was in a nursing home. An application for MassHealth (Medicaid) was filed that contained just about all of their financial information except for their bank accounts. The wife invoked her right of spousal refusal, meaning that she refused to disclose any of her cash assets. The husband was denied coverage for MassHealth and appealed.
At the 1st hearing the husband was again denied for MassHealth (Medicaid) coverage for his nursing home stay. The hearings officer said that even if the wife refused to cooperate, the husband should have cooperated by disclosing joint bank accounts between himself and his wife. I guess the hearings officer forgot the testimony that the husband was in a nursing home with dementia so advanced that he no longer recognized his stepson, no longer spoke in English and could not provide the most basic information about his finances. The wife requested a rehearing that was denied. An appeal to the Massachusetts Superior Court followed.
The Superior Court case declared that a spouse may refuse to cooperate as long as “the government has the right, by assignment or otherwise under state law, to proceed against the spouse at home to recoup it’s costs in an action for support”. This language is included in the small type just before the signature line on all MassHealth applications for long-term care.
Superior Court Justice Billings found that the applicant husband provided all of the information that he could and that he did not fail in his duty of cooperation. MassHealth’s denial of benefits and the hearing officer’s decision upholding it were reversed.
What does this mean for the residents of Massachusetts? Well, I guess it means that if your husband goes into the nursing home, you do not have to tell them about your assets. But then what? Your husband may be approved for long term care benefits but now the state may go after the spouse at home for support. How this amount of support will be determined, we don’t know. Our guess is that the state will go after the spouse at home for a division of assets similar to what would happen if this were a divorce case.
Who might benefit from this case? I think that married couples that were married late in life or short term second marriages would be appropriate candidates to just say no. Couples who never got divorced but lived separately for an extended period might also benefit from this case. When there is a divorce in these types of cases, generally, the spouses take back what they brought into the marriage. This means that if the poor spouse goes to the nursing home, the spouse that had all the assets gets to keep them.
If the spouses had a long-term marriage, invoking spousal refusal or just saying no, is really rolling the dice. The spouse at home that is refusing really doesn’t know how much she could be liable for. Spouses in long-term marriages have many other planning options available for protecting their assets if one of them get sick and need nursing home care.
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