What is MassHealth?

The federal Medicare program provides elders with financial assistance to subsidize the costs of medical bills and prescription drugs. However, Medicare does not cover placement in a nursing home. On the other hand, Medicaid, called MassHealth in the commonwealth, is a joint program with the federal government that pays for nursing home placement for qualifying individuals.

Why does it exist?

MassHealth gives health care coverage to more than a million people in the commonwealth, including seniors. The plan subsidizes all or part of health care premiums and pays for benefits, such as doctor visits, therapy, hospital stays, rehabilitation, and substance abuse and behavioral health services.

Who qualifies for MassHealth?

MassHealth considers income and assets when determining whether a person is eligible for coverage.

What is the five-year lookback period?

The five-year lookback period reviews a MassHealth applicant’s finances. Federal laws changed in 2005, so that certain applicants can be disqualified in some cases. Previously, the applicant had to disclose transfers of real estate or assets within the previous 60 months to an irrevocable trust or within 36 months to a person.

Under the new federal law, the Deficit Reduction Act (DRA), the lookback period for personal asset transfers increased to 60 months, while the lookback period to an irrevocable trust remained unchanged. In addition, the applicant cannot give away assets for less than their fair market value during this time without incurring a penalty that includes ineligibility in MassHealth, based on the monthly cost of the nursing home.

Previously, the disqualification period started the same day that the person transferred the funds. So if your father transferred $50,000 each to you and your brother, the lookback period would total 10 months, if the nursing home cost $10,000 monthly. After that time, your father would be approved for MassHealth as long as he met the other criteria.

However, the DRA now changes the start date for the penalty period until the date that the nursing home resident has exhausted other resources and has applied for MassHealth. This means that, right when the elderly person most needs the benefits, he or she must wait out the penalty period.
In the past, your father would have been eligible by Nov. 1, 2016, if he gave you both the money on Jan. 1, 2016. But under the new rules, if your dad is healthy, that 10-month waiting period remains in limbo until he needs to use the benefit. If he suffers a head injury on Jan. 1, 2017, and he is admitted to a nursing home on Feb. 1, 2017, he will not qualify until Dec. 1, 2017.

To prevent disqualification, seniors must carefully consider how they will structure their finances and allow enough time to lapse if they plan to give money to family members, so that they do not risk losing coverage when benefits are needed most.

What other resources can you suggest?

For additional information, check out the following resources.