On November 23, 2016, MassHealth issued proposed regulations that seek to implement sweeping changes to the Commonwealth’s health insurance program, also known as MassHealth. Thousands of seniors and disabled individuals rely on MassHealth benefits to provide for their skilled nursing and home care. Any change to the program will therefore affect the benefits of the many Massachusetts citizens who rely on MassHealth for their critical medical needs.
The proposed regulations were issued following Governor Charlie Baker’s Executive Order 562, which instructed administrative agencies to streamline their regulations to “reduce unnecessary regulatory burden.” However, the proposed MassHealth regulations could make the program more difficult to navigate, and possibly, result in an increase of denials, appeals, and lawsuits filed by applicants in order to protect their benefits.
Many of the proposed changes alter the current standards to qualify for MassHealth long-term care benefits. Some of the most significant proposed changes to the long-term care regulations are:
- Eliminate the ability of elderly individuals over age 65 to fund pooled disability trusts. Pooled disability trusts provide a financial cushion to elders in nursing homes who rely on these funds to supplement their care needs that are not covered by MassHealth, such as dental care, hearing aids, and other personal expenses. A pooled trust reimburses the Commonwealth from any funds remaining in the account upon the elder’s death.
- Limit the ability of an elderly nursing home resident to transfer assets into a special needs trust established for the benefit of a disabled individual (other than a child), such as a disabled grandchild or other relative. Funds in these trusts are used to supplement the disabled individual’s needs throughout his or her lifetime, filling in gaps in their public benefit assistance coverage. As with the pooled trusts, the Commonwealth is reimbursed from any funds remaining in the trust upon the disabled individual’s death.
- Expand the basis upon which MassHealth counts assets transferred to irrevocable trusts when determining an applicant’s eligibility for benefits.
- Implement changes to the way in which MassHealth views real estate transactions and transfers.
- Modify the existing regulations with regard to the purchase and treatment of irrevocable, immediate annuities, including prohibiting private annuity transactions.
- Completely overhaul the Frail Elder Waiver program (the “FEW”), making it more difficult to qualify for community benefits under this program. As of December 2, 2016, MassHealth will count the assets of the healthy spouse not receiving benefits under the FEW, which is a significant change from how the program has operated in the past. This change will be implemented retroactive to January of 2014, which could result in people currently receiving benefits being terminated from the FEW program.
- Implement a standard that all gifts made within the five-year look-back period are presumptively made to qualify for MassHealth, without any consideration for the health of the elder or the needs of the person receiving the gift at any time.
- Provide MassHealth with complete discretion to determine the “fair market value” of a gift, thus granting the agency the ability to disregard appraisals or other objective methods used to value property.
Also of concern is that the proposed regulations do not grandfather previous planning. Accordingly, applicants or members who have acted in compliance with prior regulations could be disqualified from receiving benefits even though their planning complied with existing law, and even if someone has been receiving MassHealth benefits for a number of years.
The elder law attorneys in the Mirick O’Connell Trusts & Estates practice group are working with the Massachusetts Chapter of the National Academy of Elder Law Attorneys to provide commentary on the proposed regulations. The public hearing on the proposed regulatory changes to the MassHealth program is scheduled for December 16, 2016 at 10:00 a.m. at UMass Medical School in Worcester, Massachusetts. Attorneys from Mirick O’Connell will attend the hearing to submit proposed commentary and testify as to the impact that the proposed regulations could have on elderly and disabled members who rely on these vital benefits for their skilled nursing and home care.
If you have any questions regarding how these changes may affect you or your family, we encourage you to contact us.