Many Massachusetts residents worry that the high cost of a nursing home stay will deplete the savings they worked their entire life to build. This fear is based on a common myth. Many assume they cannot qualify for MassHealth, the state’s Medicaid program, just because they own a home or have some savings.
However, MassHealth eligibility rules are intricate. Possessing assets does not automatically disqualify you. The regulations regarding which assets MassHealth counts are specific and allow for significant exclusions.
Your home is not always a countable asset
For many applicants, the primary residence is a noncountable asset. MassHealth often excludes the home from the eligibility calculation, up to a high equity limit ($1,071,000 in 2024). This is generally true if you intend to return home or if your spouse continues to live there.
It is important to understand that “noncountable for eligibility” is not the same as “protected from recovery.” While the home may not prevent you from qualifying, MassHealth may seek reimbursement from the estate after the recipient passes.
Understanding countable vs. noncountable assets
MassHealth eligibility hinges on the distinction between assets that are counted and those that are not. You can retain up to $2,000 in countable assets. Many people are surprised to learn what is not counted.
While rules are complex, here are general examples:
- Countable assets:
- Checking and savings accounts
- Stocks, bonds and mutual funds
- Second homes or vacation properties
- Noncountable assets:
- Your primary residence (within equity limits)
- One personal vehicle
- Personal belongings and household goods
- An irrevocable prepaid funeral or burial contract
This distinction is a critical component of qualifying for benefits.
The impact of the 5-year look-back period
Another common myth is that you can simply give your assets to your children to qualify. This action can cause significant problems. MassHealth reviews all financial transactions, including gifts, for the five years preceding your application.
Transferring assets within this “look-back” window can trigger a penalty period. This is a span of time during which you are not eligible to receive benefits, forcing you to pay for care privately until the penalty expires.
Planning strategies beyond the basics
MassHealth eligibility extends beyond a simple list of assets. Legal strategies exist to help protect your savings while planning for long-term care.
For instance, specific types of trusts or annuities may be used to convert countable assets into noncountable ones or to structure your finances in a compliant way. These precise strategies must be set up correctly to be effective. Since every situation is unique, consider speaking with a legal professional to protect your assets.