In some contexts, $2,000 seems like a lot of money. Winning $2,000 on a lottery ticket or earning an unexpected bonus would be enough to finance a dream trip or pay off a major bill. But if you’re 65 and thinking about your end-of-life needs, having only $2,000 in the bank would be terrifying. Looking at the big picture, $2,000 isn’t much.
No wonder a lot of older Massachusetts residents are alarmed by the MassHealth eligibility requirements. MassHealth (the name for the Massachusetts Medicaid program) will pay for your long-term needs, including your health care and nursing home residency, but only if you have limited assets. Essentially, the program will only cover your costs if you don’t have the means to pay for them yourself.
When it comes to qualifying for long-term care benefits, $2,000 is the magic number. Under MassHealth, a resident over 65 may have no more than $2,000 in countable assets in his or her name. The countable part is important! MassHealth doesn’t necessarily require that you give up your home or sell your belongings to get under that $2,000 mark – only certain types of assets are considered countable.
First, let’s talk about noncountable assets, or those that don’t count toward your $2,000 allowance. Your furniture and other personal belongings are noncountable. Your primary residence is noncountable, as long as it meets certain criteria. The home must be located in Massachusetts and must have a fair market value of less than $858,000. Additionally, you must either plan to return home after your stay in a long-term care facility or have a disabled or blind spouse or child under 21 living in the home.
So, if you reach the point where you have to make a permanent move to a nursing home and only your healthy spouse lives in the home, it would become a countable asset – but if you need to stay in a skilled nursing home temporarily and plan to return home afterward, the house would be noncountable. A property that you use for business purposes or for rental income is also noncountable.
You’re also allowed one vehicle, and any burial accounts or prepaid funeral plans are noncountable. Certain types of special needs trusts are also exempt.
So those are the assets you’re allowed to keep under MassHealth eligibility requirements. But what assets are you required to get rid of?
If you own properties other than your primary residence – like a lake house or beach condo – those are countable assets. You won’t be eligible for MassHealth long-term care services as long as you own them.
Any money you have in checking or savings accounts, retirement accounts, investments or cash is countable income. Your life insurance is also countable if the cash surrender value (the payout you get for voluntarily terminating the policy) is greater than $1,500. A term life policy or one that has no cash value is noncountable.
There’s another element of these eligibility requirements that applies to a lot of people: your spouse. If you’re married and you need MassHealth to cover your long-term care, your spouse is allowed to have up to $123,600 in countable assets. But if you have more than $2,000 and/or your spouse has more than $123,600 in countable assets, you’ll have to spend down those assets in order to qualify for coverage.
You’ve worked hard your entire life to earn what you have. Having to choose to either keep your home and savings or get long-term care probably seems difficult. Luckily, you don’t have to just throw away all those hard-earned assets in order to get the care you need. An experienced elder law attorney can help you find ways to qualify for MassHealth without sacrificing everything.
At Ladimer Law, we specialize in estate planning and elder law. Schedule a consultation to make a proactive plan that will allow you to enjoy your final years in comfort. Contact us today!
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Ladimer Law specializes in estate planning. We protect our clients, their heirs, and their assets by listening closely, knowing the law, and executing estate plans that fit and evolve.