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$10 for Katya Grineva's PIANO ZOOM Concert! Chopin, Rachmaninoff, Schubert Program ($20 Value)!

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$10 for Katya Grineva ZOOM PIANO Concert ($20 Value)!

  • Saturday, May 23, 2020; 8 PM
  • At Home Zoom Concert
  • Rachmaninoff, Chopin, Schubert Program




New York, New York

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Like every other state, Massachusetts must address the ever-increasing cost to its Medicaid program of providing long-term care to its citizens. According to a report by the state’s Department of Health and Human Services, approximately one of every six people in Massachusetts is served by MassHealth—the state’s Medicaid program—and approximately 18 percent of this program’s budget is spent on long-term care in nursing homes. As the report notes, “The significance of long-term care to the State’s Medicaid and overall budget creates an inherent incentive to restrain spending on these services.”1

Among the tools the state uses to contain long-term care spending are certain eligibility and estate recovery requirements. In other words, those who qualify for MassHealth coverage of their long-term care may have to forfeit certain assets and/or be subjected to estate recovery by the state upon their deaths. In many cases, an individual could be forced to sell his or her home. However, a notable exception applies to those who own a qualified long-term care insurance policy: these individuals may be able to protect their homes from MassHealth eligibility and estate recovery requirements. The link between Massachusetts’ MassHealth program and long-term care insurance is not the same as the partnership programs in other states; however, MassHealth does provide incentives for the purchase of long-term care insurance.


In this course, we will review the basics of MassHealth long-term care and the incentives the state offers to residents to purchase private long-term care insurance coverage. Upon conclusion, you will understand:

  • the eligibility requirements for MassHealth long-term care
  • MassHealth asset liens and estate recovery rules
  • the ways in which a qualifying long-term care insurance policy can offer exemptions from MassHealth eligibility and estate recovery requirements 
  • (The course concludes with information provided by the Massachusetts Division of Insurance, which must be included in all courses approved by the Division for required long-term care training.)

Massachusetts’ Medicaid program is known as “MassHealth.” MassHealth is a joint federal and state program that provides medical care—including long-term care—for some of the state’s most vulnerable citizens: the low-income aged, blind, and disabled.

To qualify for MassHealth long-term care and payment for long-term care services, an individual must first be a resident of Massachusetts. Only full-time residents are eligible. In addition, a resident must meet two criteria: medical and financial.

Medical Requirements

To qualify for MassHealth under the medical requirement, an individual must undergo certain tests and screenings to determine that he or she is medically in need of long-term care services. These tests typically involve evaluating the need for one or more skilled nursing services.

Financial Requirements: Income and Assets

To meet the MassHealth financial requirement, an individual’s income and assets must fall within specified guidelines or be under certain limits.

Income Limits

The MassHealth income limit is based on a percentage of the federal poverty level and varies according to whether the individual is single or married and with or without dependents. As a general rule, all of the following types of income are considered when determining MassHealth income eligibility:

  • wages, salary, tips and commissions
  • self-employment income
  • Social Security and railroad retirement benefits
  • pension and annuity income
  • interest and dividends
  • rental income (less expenses)

Income from certain veterans’ benefits, supplemental security income (SSI), and the like is not counted.

Seniors age 65 and older whose incomes exceed the maximum level but who, except for their income, would otherwise qualify for MassHealth may still obtain benefits by meeting an income deductible. The deductible is the amount that the senior must pay for his or her own care; it is equal to the amount by which the senior’s countable income exceeds the income limit (less a very modest monthly allowance).


For example, assume Ned, who is 70 years old and single, receives $1,300 a month in countable income, and the MassHealth monthly income limit is $1,041. Ned would be responsible for the first $259 of his long-term care every month before MassHealth would kick in and pay the remainder. The income calculation is actually done on a six-month basis; therefore, Ned would have to pay $1,554 ($259 × 6) every six-month calculation period before MassHealth would cover the balance.

Asset Limits

Like most states, Massachusetts imposes an asset limit of $2,000 for single individuals who seek MassHealth coverage for their long-term care. Assets held jointly by the MassHealth applicant and his or her spouse are generally presumed to be owned by the applicant.

The $2,000 asset limit does not apply to all assets an applicant owns; only countable assets are considered in the MassHealth qualification assessment. As a general rule, all assets are countable unless expressly or specifically categorized as noncountable (or the asset is not legally accessible by the applicant).

The following assets are considered countable:

  • cash
  • checking and savings accounts
  • certificates of deposit and money market accounts
  • retirement assets, such as IRAs and 401(k)s
  • securities, including stocks, mutual funds, bonds, and other investment holdings
  • nonresident property, vacation property, or a second home
  • trust principal that the trustee can distribute to the applicant at the trustee’s discretion

The following assets are expressly categorized as noncountable:

  • the principal residence (though exceptions may apply; see “Treatment of the Home,” next)
  • household and personal belongings, such as furniture, clothing, and jewelry
  • cash value life insurance if the total face value of all policies (of each spouse) is $1,500 or less
  • burial and funeral expense funds of $1,500 or less
  • burial plots
  • pre-paid burial contracts
  • a car of any value that is dedicated for use by the applicant, the spouse, or a dependent

Treatment of the Home

The treatment of the home under MassHealth rules can vary. As a general rule, for long-term care recipients who do not reside in the home (having been admitted to a nursing facility, for example), the home is not a countable asset if its equity value is $750,000 or less and any of the following apply:2

  • The individual intends to return home.
  • The home is inhabited by any of the following:

    • a spouse
    • child under the age of 21
    • a disabled or blind child of any age
    • a child who cared for the applicant for at least two years before the applicant moved into a nursing home
    • a sibling with an equity interest in the home
    • a dependent relative
  • The individual owns a long-term care insurance policy that, when purchased, met certain minimum standards.

If none of these exceptions or conditions apply, the applicant’s home will likely be deemed a countable asset. In such cases, the applicant may have to sell the home to be eligible for MassHealth long-term care benefits. MassHealth allows a nine-month “grace period” to sell the home; during these nine months, the applicant will qualify for MassHealth benefits as long as he or she is actively trying to sell the home. Once the home is sold, the proceeds are countable and will then have to be spent down until the $2,000 asset limit is reached.

It should be noted that even if a home is considered a noncountable asset and is therefore not included when determining an applicant’s eligibility for MassHealth long-term care benefits, the home may still be subject to estate recovery upon the individual’s death. An exception exists if the applicant owns a qualifying long-term care policy. Owning a long-term care policy that meets certain minimum standards at purchase will protect the home from estate recovery at the MassHealth recipient’s death.

Spend Down

Once the MassHealth applicant’s assets are categorized and valued, the amount of his or her countable assets—excluding an asset allowance for the community spouse—is compared to the $2,000 asset limit. If countable assets are more than $2,000, then the applicant will have to deplete those assets until the $2,000 limit is reached in order to qualify for MassHealth long-term care. The process of reducing assets to the allowable limit is known as spend down.

Allowable spend-downs include spending for the needed long-term care or nursing home expenses or the purchase of noncountable assets. Gifting assets or selling them for less than fair market value is not an acceptable means of spending down. If a gift or sale for less than fair market value is made within five years of the applicant’s admittance to a long-term care facility, a penalty period of ineligibility will be imposed.

Treatment of Income

Once an individual qualifies for MassHealth, virtually all of his or her income must go toward the cost of his or her care; MassHealth covers the balance. The recipient is allowed to keep a certain minimal amount ($72.80 per month) for personal expense items, such as clothing.

A community spouse is allowed to keep all of his or her own income; none of the healthy at-home spouse’s income is required to be paid for the MassHealth recipient’s care. If the healthy spouse’s own income is less than a certain level, MassHealth allows the institutionalized spouse’s income to be retained by the healthy spouse, up to specified limits. As of 2020, the minimum monthly income allowance for the community spouse was set at $2,114; the maximum was set at $3,216.


For example, assume that Clarice, a community spouse, receives $800 a month in Social Security benefits and $500 a month in pension benefits. Her husband, Bill, who is in a nursing home and receives MassHealth benefits, has a monthly Social Security retirement payment of $1,000. Under the income rules for 2020, at least $814 of Bill’s Social Security benefit could be diverted to Clarice without affecting Bill’s MassHealth benefits ($800 + $500 + $814 = $2,114). (The determination of how much income can be diverted to the community spouse is based on a formula.)

Community Spousal Resource Allowance

In addition to allowing a certain amount of a MassHealth recipient’s income to be diverted to a community spouse if needed, Massachusetts law also provides that a community spouse can retain up to a certain amount of the couple’s countable assets without affecting the other spouse’s eligibility for MassHealth. This is known as the community spousal resource allowance, or CSRA. The amount of the CSRA is subject to change every year; as of 2020, it was $128,640. With this allowance, the countable asset limit for MassHealth eligibility for a married couple is equal to the CSRA for the community spouse plus the $2,000 allowance for the long-term care spouse.

1. 3 – MassHealth Estate Recovery Rules

Upon the death of a MassHealth recipient, Massachusetts law provides for estate recovery from the recipient’s probate estate for any benefits or costs paid for his or her care. A “Notice of Claim” will be filed against the probate estate by the state’s Estate Recovery Unit. The assets in the probate estate will be inventoried and valued, and certain deductions may be applied. Payment to the state for MassHealth benefits is then made from the remaining probate assets. If there is a surviving spouse or a dependent child, estate recovery may be deferred until the spouse dies or the child loses dependent status.

Under MassHealth estate recovery laws, the state will not seek recovery of the principal residence or force its liquidation if the recipient owns a qualified long-term care policy. Specifically, the law reads as follows:

No claim for costs of a nursing facility or other long-term care services shall be made . . . if the individual receiving medical assistance was permanently institutionalized, had notified the division that the individual had no intention to return home and, on the date of admission to the nursing facility or other medical institution, had long-term care insurance that, when purchased, met the requirements of [the state’s insurance regulations].


Protection of the home is the core of Massachusetts’ long-term care program and, for this reason, makes Massachusetts’ program unique from other states’ partnership programs. Other states provide dollar-for-dollar protection for virtually all assets: for every dollar in benefits provided by a qualifying long-term care partnership policy, one dollar of the insured’s assets is protected—that is, not counted—when determining the insured’s eligibility for state Medicaid assistance. Currently, Massachusetts’ long-term care program is designed primarily to protect the home.


1. 4 – Qualifying LTC Insurance Requirements

The primary requirements for long-term care policies issued in Massachusetts can be summarized as follows:

  • The policy’s benefit trigger is the insured’s inability to perform two or more ADLs due to loss of functional capacity or severe cognitive impairment.
  • The policy cannot condition receipt of any services on any standard of medical necessity (except medical services provided by licensed medical professionals).
  • The policy cannot condition benefits on a prior hospitalization or prior receipt of long-term care services.
  • The policy cannot condition receipt of benefits on a requirement that the insured must make “steady improvement” or have “recuperative potential” (or words of similar import).
  • The policy cannot include an elimination period of more than 365 days.
  • The policy must be issued as guaranteed renewable or noncancelable.
  • The insurer must make available at the time of application an option to add inflation-adjusted benefits.
  • The insurer must make available at the time of application an option to purchase a nonforfeiture benefit.

Minimum Policy Requirements to Protect the Home

In addition, as to policies that are specifically intended to exempt the home from MassHealth eligibility requirements and to protect it from estate recovery at the recipient’s death, a certain level of benefits must be available under the policy to pay for nursing home care as of the date the policy was purchased. These minimum coverage requirements are as follows:

  • The policy must cover nursing home care for at least 730 days (two years).
  • The policy must pay at least $125 per day for nursing home care.
  • The policy cannot require an elimination period of more than 365 days or, in lieu of an elimination period, cannot require a deductible of more than $54,750.

Change from “When Insured Enters a Nursing Home” to “When the Policy Is Purchased”

Worth noting is the fact that these minimum policy benefits must apply at the time the policy is purchased. Prior to 2013, Massachusetts law required that the minimum policy benefits had to be available at the time the insured entered a nursing home if the insured was to qualify for the MassHealth eligibility and recovery exemptions. Consequently, under the previous law, if the insured used the policy to pay for non-nursing home benefits (such as home health care, personal care, or assisted living benefits), the policy benefit amount remaining to pay for nursing home care might have been less than necessary to meet the MassHealth minimum benefit requirements.

Given the change in the law—which now stipulates that the required policy benefits must be available at the time the policy is purchased—an insured no longer has to be concerned that claiming policy benefits for non-nursing home care could disqualify him or her for the MassHealth exemptions.

It should also be emphasized that the purchase of a qualifying long-term care insurance policy does not guarantee that the insured will qualify for MassHealth coverage or benefits. In all cases, an individual must meet the program’s medical and financial requirements regardless of whether he or she owns a long-term care policy.

Required Disclosure

The Massachusetts Department of Insurance requires that long-term care insurers and the policies they issue properly disclose whether the policy meets the MassHealth minimum coverage standards. To this end, the Department created the following notice that insurers should use to notify their long-term care producers and their existing policyowners (individual and group) who purchased coverage that was intended to meet MassHealth standards before 2013:


Long-Term Care Insurance Policies Issued in Massachusetts Intended to Qualify Insureds for Certain MassHealth Exemptions

January 2013

The purpose of this notice is to inform Massachusetts’ long-term care policyholders of recent changes to the law regarding potentially qualifying for exemptions from some MassHealth recovery rules. These changes go into effect on January 23, 2013. The Commissioner of Insurance has instructed all long-term care insurance carriers to provide this notice in order to clarify the coverage requirements associated with MassHealth exemptions. This notice replaces any prior notices that you may have received about the application of MassHealth minimum coverage requirements.

To potentially qualify for certain exemptions from some MassHealth recovery rules, MassHealth will now look to see whether your policy met the minimum coverage requirements that existed when you purchased the policy rather than as of the date you entered the nursing facility.

The minimum coverage requirements have not changed at this time, and you still must be covered under a long-term care policy when you enter a nursing home. Please note that this notice does not change any contractual obligations under any existing long-term care insurance policies issued in Massachusetts. Qualifying for insurance benefits is independent from qualifying for an exemption under the MassHealth law. For more information, contact your insurance agent or insurance company representative.

Please be aware that laws may change and the exemptions and the MassHealth minimum coverage requirements that exist today may change, or may be eliminated, in the future.

Producer Training Requirements

Included in Massachusetts’ 2013 long-term care insurance law is a producer training requirement. Producers who market LTC insurance products must now complete an initial, one-time, eight-hour course on long-term care and no less than four hours of long-term care study every 24 months thereafter. The following information, provided by the Massachusetts Division of Insurance, is a required component of this study.

What is a MassHealth (Medicaid) Qualified Policy?

If you receive MassHealth (Medicaid) and have a long-term care insurance policy that meets certain coverage requirements, you might be exempt from some MassHealth eligibility and recovery rules. These rules determine (1) whether your home will need to be sold in order for you to become eligible for MassHealth benefits and (2) whether you or your estate may need to repay MassHealth for any of the long-term care expenses it paid on your behalf.

Important Note: You should also be aware that laws may change and the exemptions and the minimum coverage requirements that exist today may not necessarily be the same in the future (or might not exist at all).

Qualifying long-term care insurance policies

Your policy, when purchased, must have a certain level of benefits available to pay for nursing home care and must be in effect and not fully exhausted as of the day you enter a nursing home in order for you to qualify for the MassHealth eligibility and recovery exemptions. Your policy, when purchased, must:

  1. have benefits available sufficient to cover nursing home care for at least 730 days and
  2. have benefits available of at least $125 per day for nursing home care, except where the actual cost is less, regardless of whether the policy counts days or dollars toward the benefit level and
  3. not require an elimination period (days that services must be provided before your policy will begin to pay) of more than 365 days, or in lieu of a waiting period, a deductible of more than $54,750

Since individuals must, among other things, be covered under a long-term care insurance policy on the date of admission to the nursing facility or other institution to qualify for the exemptions, they will not qualify if the policy lapsed or all benefits were exhausted prior to being admitted.

MassHealth exemptions for which you might qualify

Eligibility Exemption

If a person receives care in a nursing home and MassHealth pays for long-term care expenses, MassHealth may, in some cases, require an applicant’s home to be sold in order to be eligible for MassHealth benefits. But if you have a qualifying long-term-care insurance policy, MassHealth will not require you to sell your home.

MassHealth does not require all persons without a qualifying long-term-care insurance policy to sell their homes. Regardless of whether you have a qualifying policy, MassHealth will not require you to sell your home in any of the following situations:

  1. You notify MassHealth that you intend to return home.
  2. Certain relatives are living there.
  3. You own the home jointly with someone else and the other owner is living there.

Recovery Exemption

In some cases, MassHealth will take steps to recover some or all of the costs of MassHealth benefits that you use. But, if you have a qualifying long-term care insurance policy, are institutionalized, and you notify MassHealth that you do not intend on returning home, you may be exempt from the general recovery rules.

MassHealth generally recovers its costs in two situations. First, if MassHealth places a lien against your home, and you sell it during your lifetime, MassHealth will generally recover from your share of the proceeds the cost of all MassHealth benefits provided. Second, if you die and own property, MassHealth will generally file a claim against your estate for the following costs paid by MassHealth:

  • All MassHealth benefits provided on and after age 55; and
  • Any services in a nursing facility or other institution regardless of your age, if you were permanently institutionalized.

If you qualify for the recovery exemption, you will not have to repay the costs of your nursing home stay or other long-term care. You will still be required to repay the costs of other MassHealth services such as hospital care, physician visits and prescriptions.

You should be aware that there are several situations in which MassHealth does not place liens or collect from estates regardless of whether you have long-term care insurance:

  • MassHealth does not place liens on the homes of all persons whose nursing home care is paid by MassHealth. MassHealth does not place a lien if certain relatives are living in the house, and
  • it does not place a lien until it determines that you are unlikely to return home.

MassHealth does not collect from the estates of all MassHealth members who die.

MassHealth will waive recovery if:

  1. Real property must be sold to pay its claim and
  2. The property was left to a person who meets certain financial standards and has continually lived there for a year before you started receiving benefits. However, if during the first two years after MassHealth or a court determines that the conditions for waiver have been met, that person either (a) sells the property, (b) no longer uses the property as his or her primary residence, or © no longer meets the financial standards, MassHealth may require payment.

If certain relatives survive you, your estate may delay paying MassHealth. No payment

will be required while your spouse or any blind or permanently and totally disabled child is still living, or while any of your children is under age 21.

Purchasing insurance to qualify for MassHealth exemptions

Whether you should purchase long-term care insurance to qualify for the MassHealth exemptions is a personal decision. Depending on your financial circumstances, you could decide to purchase sufficient long-term care insurance to cover the full cost of any care you might require, thus eliminating the need for public assistance. You might also have other resources you plan on using to supplement whatever coverage you purchase.

For advice on whether to purchase long-term care insurance for the purpose of qualifying for MassHealth exemptions or for other advice in protecting your assets, you should speak with an attorney or financial planner experienced in estate planning and MassHealth eligibility.

For more information regarding the MassHealth program, call MassHealth’s Customer Service Center at 1-800-841-2900 or visit MassHealth’s website at www.mass.gov/masshealth.


1. 5 – Summary

  • MassHealth, a joint federal and state program, finances medical care—including long-term care—for certain Massachusetts residents who qualify based on medical need and financial condition.
  • To ease the burden on the MassHealth program, Massachusetts encourages its residents to purchase long-term care insurance by providing certain incentives.
  • Specifically, those who purchase a qualifying LTC insurance policy may be exempt from any lien or required sale that MassHealth might otherwise impose upon the individual’s home and from estate recovery of probate assets upon the individual’s death.
  • A long-term care insurance policy that provides these exemptions must meet certain requirements, including certain minimum policy benefits at the time the policy was purchased.
  • By encouraging the purchase of private LTC insurance coverage, the Commonwealth, as well as its citizens, will benefit by reducing reliance on state-paid, long-term care services and can expect to be better able to preserve the long-term care safety net.