Changes to MassHealth (Medicaid) laws...

Elder law attorneys Cohen & Oalican of Boston, Andover and Raynham want to alert you that on February 8, 2006, President Bush signed the Deficit Reduction Act of 2005, which significantly changes the federal Medicaid laws. The three most important changes concern: 1) the transfer of assets to qualify for Medicaid; 2) Medicaid annuities; and 3) Medicaid’s treatment of the primary residence. This article covers the changes in Medicaid annuities.

Annuities

Congress has also changed the annuity regulations. Medicaid allows a spouse whose assets exceed the Medicaid limit to protect those “excess assets” by purchasing an irrevocable, immediate annuity. The old Medicaid rules allowed the spouse to name anyone he or she wanted to receive the remaining annuity payments if the spouse died during the annuity term. Under the new rules, Medicaid requires that annuities name the Commonwealth of Massachusetts as the beneficiary. Although the revised statute is somewhat ambiguous, it appears that the Commonwealth can only seek reimbursement from the annuity for benefits provided to the community spouse. The new rule does not apply to annuities purchased prior to February 1, 2006. Buying annuities remains an effective strategy to protect assets for the spouse of a nursing home resident; however, the new rules have added a risk to this strategy.

This is third in a series regarding changes the Deficit Reduction Act of 2005 has made in dealing with Medicaid (MassHealth). Thank you for putting your trust in our Elder Law legal practice, Cohen & Oalican, LLP