A common misconception is that Medicaid is only an option for people with lower incomes and smaller estates. However, with proactive financial planning, it’s possible to protect hard-earned assets and secure Medicaid funding for your long-term care needs.
Medicaid, or MassHealth as it’s called in Massachusetts, is a jointly funded federal and state health care program. While people of all ages are eligible and several different programs exist, we’ll focus on residents 65 and older planning for long-term care in a nursing home.
Medicaid income and asset limits
Eligibility requirements can be complicated for receiving Medicaid. It’s advisable to consult with an experienced elder law attorney who understands the process. Below is a brief guide of criteria for qualifying for Institutional / Nursing Home Medicaid in Massachusetts:
- Single: Monthly income of $1,073 or less and a limit of $2,000 in total assets.
- Married (both spouses applying): Monthly income of $1,452 or less and a limit of $3,000 in assets.
- Married (one spouse applying): Monthly income of $1,073 for applicants and a limit of $2,000 in assets for the applicant and $130,380 for the non-applicant spouse.
Under Medicaid rules, income includes employment wages, pension payments, alimony, Social Security Income as well as disability payments, IRA withdrawals and stock dividends.
The five-year Medicaid look-back period
When applying for MassHealth long-term care services, the state reviews the past five years of an applicant’s financial records to make sure that no assets were given away or sold for less than market value so that they can meet program requirements.
Without strategic planning, if you or your spouse have to spend time in a nursing home, your entire estate may have to be depleted to pay for care until your assets fall within the Medicaid requirements. The good news is that it doesn’t have to come to that.
Asset planning strategies
Each person’s needs are unique, and a knowledgeable lawyer can advise you which strategy or strategies may be a good fit to spend, transfer or gift your assets to receive MassHealth benefits. These include:
- Medicaid Asset Protection Trust
- Spousal refusal
- Lady bird deed, also known as Enhanced Life Estate Deed
- Spend down plans
- Spousal asset transfers
Many experience peace of mind by crafting a comprehensive estate plan, one that considers Medicaid assistance to cover potential long-term healthcare costs while protecting you and your family’s future financial health.