The Boston Globe recently published an article concerning MassHealth’s proposed regulatory ban for transfers of assets to pooled trusts for individuals over the age of 65. The article profiles a typical client who might use a pooled trust, an elderly and disabled gentleman with minimal savings who uses his trust funds to pay for the services of a companion caregiver.
The client is a nursing home resident. By using the pooled trust, he is able to pay for basic essentials and enjoy meals out at local restaurants. If the pooled trust is eliminated as an option for him, presumably he would then be forced to spend down the remaining funds in the trust on nursing home care—which would be depleted in a matter of months—or else be disqualified from receiving MassHealth long-term care benefits.
The article does not discuss an important component of pooled trust transfers: the state reimbursement requirement from pooled trust accounts. Under this requirement, if an individual dies with funds remaining in a pooled trust, these funds are used to reimburse the state up to the amount that the individual received for long-term care benefits. This requirement is an important feature of pooled trusts; testimony during the public hearing on the proposed regulations revealed that the state has been reimbursed several millions of dollars each year from the accounts of deceased beneficiaries of pooled trusts.
The pooled trust option is a win-win for both elderly and disabled nursing home residents and the state. Such residents are able to use funds in pooled trusts to pay for extra essentials during their lives, and the state is reimbursed from the remaining trust funds upon their deaths.