August 5, 2004

Budget Wrap-Up

The Legislature held it’s final formal session last Friday, ending at approximately 2AM. Although a number of bills were passed and vetoes overridden in the final hours, those items that did not get taken up outnumbered those that did. Quite simply, they ran out of time.

Among the veto overrides that did not get taken up was the override of Section 160, the authorizing language to request a transfer of assets waiver. On August 28, 2003 Romney requested this waiver from the Federal government. They have not acted upon his request yet. Some experts doubt that the waiver will ever be granted. This override that we had hoped for deals with how penalty periods are determined when someone makes a gift and later needs nursing home care. We will continue the fight against this that has 2 major provisions. First, that the look-back periods will be extended from 3 to 5 years and from 5 to 10 years, if a trust is used. Lastly, any gift made during the applicable look-back period will be treated as though it was made on the date that you enter the nursing home or in certain cases, even later. This is opposed to the current rule that allows gifts to be made and the associated penalty period starts when the gift was made.

The major victory for seniors was the repeal of the expanded estate recovery that I reported about last week. Elimination of the Expanded Estate Recovery restricts the Commonwealth’s ability to place a lien on the nursing home resident’s probate estate. This means that trusts, life estates and other forms of ownership will now once again become estate-planning options for seniors looking to protect their property.

Other good news is that the homestead bill (S.995) was signed into law by the Governor on July 28. This bill increases the homestead exemption from $300,000 to $500,000. If you already have a homestead, you automatically qualify for this increase in protection. A homestead, while not providing any protection against nursing home costs, does protect your primary residence in the event that you are sued. It’s like a free insurance policy (except for the initial filing fee) that is good for life. Every person, who owns a home in Massachusetts should have a homestead.

Other overrides that were successful include Section 257, which preserves clinical eligibility criteria for MassHealth nursing home reimbursement. This means that in order to be eligible for MassHealth (Medicaid), you must need assistance with at least 3 activities of daily living. Activities of daily living include items such as eating, bathing and getting dressed. The Governor sought to make it necessary to need assistance with more than 3.

Another very important override restores bed-hold payments for nursing home residents. The need for a bed-hold usually occurs when a nursing home resident needs to leave the nursing home because he needs to go to the hospital or when his family is taking him out for a special family outing, such as a wedding. MassHealth will pay for up to 10 days for temporary absences. The Governor sought to make it necessary for the nursing home resident to private pay for any days that he would be missing from the nursing home. This had the effect of making the nursing home resident a prisoner of the nursing home, if he could not afford to privately pay for any temporary absences. Thank goodness the Legislature overrode this veto.

I’ll be carefully monitoring next year’s budget and will try to keep you informed of items of interest. But until then, enjoy your summer!

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. If you have any questions please call me at the Elder Law Center, One Essex Street, Saugus, MA 01906 (781)233-4444. To view this or any prior article, please visit our web site at www.elderlawcenter.org

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