At some point during your retirement years there is a strong likelihood that you and/or your spouse will need some type of long-term care services. If that care includes nursing home care, the cost of that care will be high, particularly if you are in Massachusetts. Many seniors find themselves turning to Medicaid for help paying for the high cost of long-term care. The need to qualify for Medicaid, however, can put your retirement nest-egg at risk. To help protect your assets and ensure your Medicaid eligibility, the attorneys at Legacy Care Law Firm offer a Massachusetts guide to Medicaid for seniors.
Will You Need Medicaid Coverage as a Senior?
As a retiree, you will likely rely predominantly on Medicare to cover healthcare expenses during your “Golden Years.” Although Medicare will cover most healthcare costs, it does not pay for long-term care services, and there is a good chance you will need that type of care. In fact, when you enter your retirement years (around age 65), you already stand about a 70 percent chance of needing some type of LTC services before you reach the end of your life – and that care will be expensive. While the national average for 2023 was just over $100,000, Massachusetts residents paid over $160,000, on average, for a year of long-term care (LTC) and almost $80,000, on average, for assisted living. Even if you retain private health insurance coverage, it is unlikely to cover the costs associated with LTC which is why over half of all seniors turn to Medicaid for help covering long-term care expenses. Medicaid eligibility, however, depends in part on an applicant’s income and countable resources which can be an obstacle for seniors who did not incorporate Medicaid planning into their estate plans.
Qualifying for Senior Medicaid in Massachusetts
Medicaid is a healthcare program that is (predominantly) funded by the federal government but that is administered by the individual states. As such, both eligibility requirements and services covered can differ some from one state to the next. Because Medicaid is a “needs-based” program, however, all states impose income and asset limits when evaluating applicants. In Massachusetts, for example, an individual senior applicant in need of nursing home care cannot have income that exceeds $1,215 per month while a married couple both applying cannot have combined income that exceeds $1,643 per month as of 2023. For home and community-based services, an individual’s income cannot exceed $2,829 per month. An individual applicant is also restricted to countable resources that do not exceed $2,000 in value. If your assets exceed the limit, you may need to enter Medicaid “spend-down” to reduce the value of your assets so that you qualify for Medicaid.
Transferring assets out of your name when you realize you need to qualify for Medicaid will not work because Medicaid uses a five-year “look-back” rule. The rule essentially allows Medicaid to review your finances for the five year period prior to your application and if any transfers for below market value are uncovered you may be subject to a waiting period before Medicaid benefits will kick in as a result.
Understanding the Massachusetts Medicaid Spousal Impoverishment Rules
You may also be concerned that your need to qualify for Medicaid could impact your spouse’s income and access to needed assets. Fortunately, the Massachusetts Medicaid Spousal Impoverishment Rules protect your spouse if you need to qualify for Medicaid. Under those rules, your spouse is entitled to a Minimum Monthly Maintenance Needs Allowance (MMMNA) that is intended to ensure that he/she does not go without much-needed income from you after you enter a nursing home. The standard MMMNA in Massachusetts through June of 2024 is $2,465. In Massachusetts, however, a non-applicant spouse can further increase their Spousal Income Allowance if their housing and utility costs exceed a “shelter standard” of $739.50 / month (eff. 7/1/23 – 6/30/24) but a Spousal Income Allowance cannot push a non-applicant’s total monthly income over $3,853.50.
Yet another important aspect of the Medicaid Spousal Impoverishment Rules is the Community Spouse Resource Allowance (CSRA). The CSRA protects assets owned by a couple when one spouse applies for Institutional Medicaid or Medicaid Waivers by allowing the community spouse to retain up to a maximum of $154,140 of the couple’s assets as of 2024. If the non-applicant’s share of the assets falls under $30,828, 100 percent of the assets, up to $30,828 can be kept by the non-applicant.
How Can Medicaid Planning Help Massachusetts Seniors?
If you or your spouse need to qualify for Medicaid during your retirement years, you will be subject to the countable resources test during the application process. Although some assets are exempt, including your home up to a $1,071,000 equity limit, you may easily own assets valued in excess of the asset limit. If so, those assets are at risk if you need to qualify for Medicaid because the government effectively wants you to deplete those assets before stepping in to help you cover the cost of long-term care. Medicaid planning can help protect your assets while ensuring your eligibility for benefits in the future. Medicaid planning uses legal tools and strategies, such as establishing an irrevocable Medicaid trust, to accomplish these goals.
Are You Ready to Incorporate Medicaid Planning into Your Estate Plan?
For more information, please join us for an upcoming FREE seminar. If you are ready to incorporate Medicaid planning into your Massachusetts estate plan, contact our Medicaid planning attorneys in our North Andover, Woburn, and Beverly offices at (978) 969-0331. Our Salem and Nashua, New Hampshire office can be reached at (603) 894-4141.
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