When an aging spouse or loved one undergoes a medical emergency, such as a fall resulting in broken bones, serious questions arise about what to do next. Finding them the best medical care is first and foremost, but just as worrisome can be the question of how to pay for the services that their care providers are recommending.
Often, seniors who experience a fall or other serious injury will, after an emergency room visit, end up in the rehabilitation wing of a local nursing home. If the rehabilitation facility stay is for 100 days or less, then Medicare will pay for most of the bill, provided the senior continues to improve during that time.
Beyond that period or if the patient stops improving, family will need to pay privately unless the senior qualifies for MassHealth (the name for Medicaid in Massachusetts).
In order to qualify for MassHealth, applicants need to have less than $2,000 in “countable assets.” If a spouse is still living in the community, he or she can have as much as $113,640 in their own name and unlimited income.
Without preplanning for MassHealth eligibility using irrevocable trusts, seniors often are faced with having to spend down their hard earned assets in order to qualify. However, there are other options available for those who need immediate care.
Under the MassHealth regulations, spouses living in the community can have an unlimited amount of income. If a couple has assets over the MassHealth asset limits they could transfer the excess funds into the community spouse’s individual name, and have that spouse purchase an annuity in an amount sufficient to reduce his assets below $113,640. The community spouse would then meet the MassHealth asset requirement for community spouses and the spouse in need of care could qualify for MassHealth. Once the community spouse begins receiving his monthly annuity payments, he can save the annuity payments he receives each month without penalty.
Transfers between spouses are not included in MassHealth’s five year “look-back period” on disqualifying transfers. However, the annuity used in this strategy must meet certain requirements, including that it be irrevocable.
This strategy is especially useful for seniors facing an immediate need. In fact, it is possible to institute these asset transfers and annuity purchases literally the day before applying for MassHealth.
If your loved one needs immediate medical care and you are worried about how medical costs will affect your family’s quality of life and legacy, call the MassHealth Medicaid planning attorneys of the Heritage Law Center to discuss whether this may be a good strategy for you.