We discuss many planning options with clients daily. Some clients, focused on potential long-term medical needs for themselves or family members often inquire about the financial qualifications for MassHealth, the Massachusetts name for the federal Medicaid program. MassHealth is essentially health insurance that assists individuals pay for their medical expenses. It is designed for low-income people age 65 and older. Certain people younger than age 65, particularly those who have disabilities, can also qualify for MassHealth, but they must meet certain criteria. Many people feel that because they own a home or have some assets that they will be prevented from qualifying for MassHealth for potential nursing home stays and other medical bills. However, there are a variety of assets people can own and still qualify for MassHealth. It is just a matter of knowing the rules, and making a plan to meet those requirements.
The following is a brief list of the MassHealth asset limits for individuals applying for benefits:
- Cash – An applicant can possess $2,000 cash that will not be counted as an asset in determining MassHealth eligibility.
- Home – MassHealth permits a $750,000 exclusion toward your home, meaning that if your home is valued at $750,000 or less at the time of your application, your home is excluded as an asset. This number is also adjusted for inflation. If you are living in a nursing home at the time you are approved for MassHealth, there may be future issues with your home such liens and/or a forced sale.
- Car – One automobile of any current market value is excluded as a countable asset.
- Funeral and Burial Funds – If the applicant has a pre-planned funeral or memorial arrangement, the entire value of that plan is excluded. If the applicant does not have a plan, the applicant is permitted to purchase a pre-paid burial plan without it counting against them. In addition, the applicant can fund a separate bank account that contains $1,500 toward funeral expenses.
- Property – According to federal law, any real or personal property that is essential to self-support, regardless of value or rate of return, is excluded. This could include farms, rental properties and other real estate investments that generate income necessary for self-support. For rental income, however, the property must generate at least 6 percent of its value annually in order to qualify for the exclusion.
- Life Insurance – Only the cash value of a life insurance policy owned by the applicant is counted, thus, all term policies are ignored.
- There are many other rules that can provide much needed benefits to applicants now or in the future, however, the key is to plan accordingly now.