Elder Law Center

One Essex Street

Saugus, Massachusetts 01906

Telephone 781.233.4444   Fax 781.231.2222

 

 

 

 ELDERS REGAIN PROTECTION OF HOME (temporarily)

Saugus Advertiser – April 1, 2004

The legislature has overridden Governor Romney’s veto for the delay in implementation of the Expanded Estate Recovery. The House voted 154-0 and the Senate voted 37-1. Senator Joanne Sprague (she is not running for re-election) was the sole opponent.

WHO THIS AFFECTS: This change affects only people who died between July 1, 2003 and July 1, 2004 and had been in a nursing home on Medicaid (MassHealth).

The result of this override means that the expanded estate recovery will not start again until July 1, 2004. Does this mean that we will be stuck again with the expanded estate recovery after July 1, 2004? Not necessarily. This gives our legislators the time to consider the affect of this law on their constituents. I expect either a complete repeal of this section, or at least a modification that would grandfather existing estate plans and/or an exception for being able to protect the family home. This is where you come in. I recommend that each of you call your legislators and tell them that you want the repeal of the Expanded Estate Recovery law. Remember, it’s the squeaky wheel that gets the oil.

EXPLANATION OF THE CHANGE: The expanded estate recovery went into effect on July 1, 2003. Anyone who was in a nursing home and died before that date was under the old rules. Those old rules said that the Division of Medical Assistance could only recover against the decedent’s probate estate. The probate estate consists of assets in the decedent’s name alone. After July 1, 2003 the DMA sought to recover against non-probate assets. The major categories of assets they started going against was life estates, joint property and life insurance. For people who died from July 1, 2003 to the present and had been receiving Medicaid (MassHealth in Massachusetts), the Division of Medical Assistance (DMA) has been recovering against the decedent’s probate and non-probate property.

The effect of this law change is:

    • DMA will not seek to recover against any non-probate assets for any MassHealth recipient who dies before July 1, 2004.
    • Upon request, DMA will issue releases of liens for all deaths prior to this date.
    • DMA will refund all sums it has collected to date for those who died since July 1, 2003.
    • Heirs of MassHealth recipients who die(d) prior to July 1, 2004 are free to do what they want with the non-probate property without risk of recovery.

Members of the Massachusetts Chapter of the National Academy of Elder Law Attorneys are also working on another Medicaid problem called Income First.

On September 1, 2003 Massachusetts changed from an Asset First state to an Income First state. It sounds innocent enough, but if you are an elderly woman who has a husband in a nursing home, the change is devastating. And to make matters worse, it is knowingly being applied in an illegal manner by the Division of Medical Assistance (DMA).

Prior to September 1, 2003, if a wife had to put her husband in a nursing home, she was allowed what we call a Minimum Monthly Maintenance Needs Allowance (MMMNA). This rule said that she could keep about $1,400 per month to live on. Assuming that her only income is social security of about $500 per month, she would be entitled to another $900 of income to bring her up to the MMMNA of $1,400. This $900 increase could be derived in two ways. She could be allocated $900 of her sick husband’s income or, she could keep extra assets (Asset First) that if invested in the bank would generate an extra $900 per month of interest. At today’s interest rates, using 2%, she would be entitled to keep $540,000 and have her husband qualify for Medicaid.

The benefits to the wife under the Asset First method are significant. She would be able to keep enough money to ensure that she could maintain herself in the community. She could afford to go to assisted living, if needed. Or she could afford to pay for extra assistance in her home. The result is that it kept the community spouse safe and out of a nursing home.

The new rule that was passed by our legislature says that the wife must spend all of their money on the nursing home, and when they are below the asset limit, a portion of the husband’s income will be allocated to the wife at home. What happens when the husband dies ? If the husband’s retirement income stops on his death, the wife is left with no money and no income. With housing costs and medical expenses skyrocketing, she might be forced to sell her home or go onto welfare and food stamps.

To make matters even worse, DMA is using rules that were found to be illegal in a court of law. Income First requires that income of the spouse in the nursing home be allocated to the spouse at home. In the case Robbins v. DeBuono, 218 F.3d 197 (2nd Cir. 2000) the court decided that it is against the law to assign social security and veterans benefits. Our Governor, legislators and DMA have decided to ignore that law. In response, volunteer Massachusetts members of the National Academy of Elder Law Attorneys filed a lawsuit against the Division of Medical Assistance. Instead of going to court, DMA mooted the case by caving in and allowing the use of Asset First for all of the plaintiffs. For the family’s that didn’t have an experienced elder law attorney and weren’t aware of this, they lost. We are now looking for new families that are injured by this illegal act and plan to continue this case. They haven’t heard the last from us.

SUMMARY OF MEDICAID CHANGES IN 2003:
  • January 1, 2003 – Asset limit cut in half for married couples
  • July 1, 2003 – Expanded Estate Recovery – this allows the DMA to go after life insurance, joint property, life estates and "any other interest", whatever that means.
  • August 15, 2003 – Elimination of Bed Hold – Elimination of a benefit that allowed nursing home residents to visit with family or leave for medical treatment.
  • August 28, 2003 – Romney files for Medicaid Waiver – This is a request to the Federal Government to allow the Governor to ignore Medicaid rules and make up his own.
  • September 1, 2003 – Income First takes effect.

As you can see, 2003 was a very bad year for seniors. The legislators have heard your concerns over the expanded estate recovery, but it is important that they hear from you again. They will be voting on either repealing or amending the estate recovery in the upcoming months. Make your voice heard.

This article gives general information and not specific advice on individual matters. Persons wanting individualized advice on matters discussed should contact an advisor experienced in those matters. To the extent this article provides information on legal matters, it is based on law in effect in Massachusetts on the date of posting (laws in effect in other states are often quite different).

Ronald H. Surabian is a CPA and attorney who works at the Elder Law Center in Saugus, Massachusetts. He also holds a masters in accounting and a masters in tax law. He currently serves on the board of directors of the Massachusetts Chapter of the National Academy of Elder Law Attorneys.

 

 

 

 

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