This is a loaded question often asked by understandably concerned elders who are applying for Medicaid benefits to cover the expense of their spouse’s long-term care in a skilled nursing facility.  The short answer is no, but a response as to how MassHealth and the Estate Recovery Unit determine what assets, if any, including a home are subject to “recovery” has many nuances and differs depending upon a MassHealth member’s circumstances. 

Estate Recovery

As explained on the official website of the Commonwealth of Massachusetts, “Federal and state Medicaid law requires MassHealth to recover assets from the estates of certain MassHealth members after their death. This process is called “estate recovery.” The assets are used to reimburse (pay back) the state for the cost of care that MassHealth paid for the member.”

Simply put, if you apply for and receive Medicaid benefits after age 55 and/or for care in a skilled nursing facility at any age, MassHealth may seek to recover the cost of benefits paid out on your behalf.  This might include, among other assets, funds in bank accounts or proceeds from the sale of your real estate or personal property.  However, the Estate Recovery Unit can only recover from assets in your sole ownership at the time of your death.  Moreover, if the MassHealth claim is greater than the probate estate of a prior MassHealth member, MassHealth will not pursue an “unsatisfied” claim and it will only recover funds after certain other debts have been cleared.  Also noteworthy is that estate recovery can be delayed, waived, or reduced in certain instances including, but not limited to, cases when there is a surviving spouse, a disabled child or a child under 21 years old, or when an heir meets the necessary low-income and/or caretaker criteria.

With careful long term care planning, it is likely that the only remaining assets in the name of a MassHealth recipient in a skilled nursing facility would be valued at less than $2,000 and, therefore, those would be the only assets subject to estate recovery.  That said, according to recent revisions in the law which became effective in May of 2021, the Estate Recovery Unit has expanded their criteria for estate recovery waivers and, further, no longer pursues recovery of assets in any estate valued at less than $25,000.

Protecting Your Home Against Estate Recovery

As referenced above, as part of the long-term care planning for married couples, a home would likely be transferred from the co-owners to the spouse who is not seeking MassHealth benefits.  Since only assets held in the sole name of the MassHealth recipient can be subject to estate recovery, the equity in the primary home may be protected.  Currently, a principal residence with less than $955,000 in equity is not countable for the purposes of calculating the assets of a MassHealth applicant’s spouse.  Contrary to hearsay, MassHealth will not force a spouse to sell or move out of their home provided that the MassHealth application is completed correctly.  Please note, in some instances when all required criteria have been met, a principal residence may be transferred to a disabled child or other “exempt person.”  It is, however, essential that the current by-laws with respect to disqualifying transfers be analyzed on a case-by-case basis to avoid a transfer that might jeopardize an application for MassHealth benefits.  In addition, long term care insurance that meets the required criteria may avoid a MassHealth lien on real property.  The foregoing options are just a few of the possible means of protecting your home.

Unmarried Homeowners Without An “Exempt Person” Living in Their Home

If a MassHealth member receiving benefits in a skilled nursing facility is the sole owner of real estate, and that person does not have an “exempt person” living in the home and is not expected to return home, a lien may be placed on the property.  If MassHealth places a lien against a property that is later sold, transferred, or refinanced, the sale proceeds must be used to repay MassHealth for benefits paid out on the member’s behalf.  Although the sale of real estate may be required to repay MassHealth, if family members are living in the home and have been living there since before the MassHealth member’s death, MassHealth may willing to delay the claim, allow an alternative method of repayment (such as a refinance or promissory note), or consider a hardship or other waiver.  Please note, if a lien is released by MassHealth in certain circumstances, that does not prevent an estate recovery effort by MassHealth. 

Claims for Estate Recovery and Recorded Real Estate Liens

A lien on real estate is recorded at the Registry of Deeds, whereas an estate recovery claim requires that a Notice of Claim be filed at the Probate Court.  While a lien can be recorded at any time, a Notice of Claim is filed only after the MassHealth recipient’s death.  MassHealth calculates the amount of benefits paid on the recipient’s behalf.  If there is a dispute with respect to the amount, an appeal can be filed in a timely manner as can a request for a hardship or other waiver.  A MassHealth member, or their Authorized Representative, can contact the Estate Recovery Unit at 800-841-2900 or email privacy.officer@mass.gov for more information with respect to accruing liens and/or claims or for access to any records related to their MassHealth file.

Conclusion

Many clients have sat at our conference room table for the first time feeling weary from the recent health events that have impacted their family, uncertain about how to pay for care, and anxious about embarking on the complicated process of obtaining public benefits and asked, “Will MassHealth take my home?”  I wanted to begin to address the complexities of this legitimate concern to provide some peace of mind to those contemplating long term care planning in an attempt to encourage people to begin planning as early as possible for the best possible outcome.

As with all matters relating to the complexities of elder law and long term care planning, seeking the advice and assistance from a law firm that specializes in this area of law is imperative in attaining financial eligibility for MassHealth in a manner that doesn’t jeopardize future benefits, maximizes the protection of assets, minimizes private pay for skilled nursing care, and ensures the completion of a MassHealth application and accompanying verifications in a precise and cohesive manner.  While an approval can never be guaranteed, as an application in its very essence is a request and not a right, we have earned a perfect success rate to date and pride ourselves in discovering, disclosing, and resolving any potential concerns before an application’s submission.  This effort, together with timely and thorough follow through, has resulted in only positive results for our clients.