Books and the Scales of Justice
Books and the Scales of Justice

Could the State Choose Your MassHealth Plan Without Your Consent?

One of the key parts of estate planning is knowing where the finances to handle your medical expenses are coming from. Depending on the services you require to maintain your quality of life, these expenses may vary, but there are many programs out there to help soften the blow of these costs. MassHealth is one such program. In Massachusetts, MassHealth helps pay for care services and medical treatment for qualified seniors, but a new bill may change the way this program works, and some may not be happy about that.

Will the State Choose a MassHealth Plan for You?

Early November, a Senate bill called S 2200 passed the Health Care Financing Committee. This bill promises to save over $1 billion in reforms to the health insurance commercial market and MassHealth. Though many are still debating whether the bill can truly achieve these goals, some are focusing on aspect of the bill that they claim isn’t right.

The bill would allow the automatic enrollment of qualified seniors into MassHealth’s Senior Care Options—a program that covers people who qualify for both Medicare and MassHealth. But if you don’t want to be a part of the program, then you would have to notify state officials. Many say that this will take away the freedom of choice from seniors, while others argue that it will keep many elderly people from falling through the cracks in the system.

This change in the law could also affect your estate by changing the way your medical expenses are handled, so the North Shore Planning will keep an eye on this story. Knowing how our state’s regulations will affect you is a top priority when planning estates, setting up asset protections and establishing pet trusts. It’s part of how we give our clients the personal attention that they deserve.

supreme court
supreme court

New Guidance from SJC on MassHealth Planning

The Supreme Judicial Court rendered its long-awaited decisions in Daley v. HHS (SJC-12200) and Nadeu v. Medicaid (SJC-12205) today. The Court held that “neither the grant in an irrevocable trust of a right of use and occupancy in a primary residence to a [MassHealth] applicant nor the retention by an applicant of a life estate in his or her primary residence makes the equity in the home owned by the trust a countable asset for the purpose of determining Medicaid eligibility for long-term care benefits.”

The decisions make clear that transferring a primary residence into an irrevocable trust, properly done, will not make the residence countable for purposes of determining MassHealth nursing home benefit eligibility after the MassHealth five-year lookback period has run, so long as the applicant does not have access to principal under “any circumstances.” The value of a life estate retained by the grantor remains countable as well as any income to which the grantor of the trust is entitled.

The decisions describe some traps for the unwary. Such trusts should circumscribe trustee discretion to appoint trust assets to a non-profit organization. Provisions such as this are sometimes included to qualify for favorable tax treatment, or “grantor trust” status. Many skilled nursing facilities in Massachusetts are run by non-profits, and if the nursing facility meets the definition of a non-profit set forth in the trust, this may make the trust assets countable. Also, trust language that provides for the use of trust principal to pay for taxes creates countability. Lastly, the opinions suggest that the value of a grantor’s use of the premises, i.e. the fair market rental value, under a use and occupancy agreement is a countable asset.