MassHealth is important for paying for your health care when you are older. It is important to understand how these programs work and to know how to spot false information about them.
Giving money away
One common misperception about MassHealth involves gifts. Federal tax rules allow you to give up to $15,000 to your children or others without a tax penalty. Under MassHealth regulations, you cannot do that without penalty.
Housing
Massachusetts does not force individuals to sell their primary residence to receive MassHealth benefits. However, there are two important conditions.
First, a house valued at over $823,000 after mortgages is a countable asset. MassHealth applicants, however, are restricted to $2,000 in countable assets. Therefore, owning a home with equity over $823,000 disqualifies the applicant for benefits.
For eligibility, applicants must reduce their equity below $823,000. Applicants may be eligible if they take out a loan with a reverse mortgage and spend those funds on their care. MassHealth, however, will put a lien on the home for money paid on care.
MassHealth will not allow recipients to use any of their income to pay for maintaining a former home. There is an exception if the home is rented, and the rental income pays for nursing home care as part of a recipient’s income. Other family members must pay expenses such as taxes and insurance and other expenses for the home.
Nursing homes
Nursing homes do not see the money. Residents sign a contract to pay for services and voluntarily pay for the care that is provided. When that money is spent, residents agree to apply for MassHealth benefits.
MassHealth has asset limits and spend-down rules. It will review how patients reduced their countable assets below $2,000. MassHealth will reject applications if the spent down was improper.
MassHealth also has several programs allowing seniors with illnesses or disabilities to remain in their homes. However, there are some extremely strict income limits.
Assisted living
MassHealth does not usually pay for assisted living. Some programs pay for group living at a care level below a nursing home. But these programs usually have strict income restrictions which put them out of reach for many seniors.
Assets
MassHealth is not restricted to low-income seniors. Asset limits are enforced for nursing home benefits but there are no income limits for Higher-income recipients or those with long-term care insurance may have a complicated six-month deductible.
Spouses of applicants may have assets over $123,600. There are permissible spend-down assets to reach these limits.
Attorneys can help you with options that meet your needs. They may assist you with meeting eligibility requirements.