Hardship Waiver, Senate Bill 490M
Under current MassHealth regulations there is a so-called Hardship Waiver which is intended to ensure that an applicant will continue to receive necessary nursing home care even if they have transferred assets.
Typically if an applicant transfers assets Medicaid imposes an ineligibility period. In certain cases, the applicant cannot get the gifted assets back despite their best efforts. If there are no other funds available to pay for their care, the applicant could be discharged from the facility, putting them at risk. The Hardship Waiver states that if an applicant proves to MassHealth that they cannot get the funds back, and that the nursing home has begun discharge proceedings which place the applicant’s life at risk, MassHealth will consider waiving the ineligibility period. In theory, this regulation should be enough to protect applicants. However, in practice, MassHealth hardly ever grants a waiver. The proposed regulation clarifies that MassHealth should presume the applicant is eligible for the waiver if they meet the regulatory requirement. Also, the bill eliminates the need for the nursing home to begin discharge proceedings. Unfortunately, MassHealth does not play by the rules and this bill is necessary to make it very clear that Hardship Waiver should be utilized.
Intent of Transfer, House Bill 2083
MassHealth’s regulations state that an applicant for benefits should not be penalized for a gift if it was made for a reason other than to qualify for MassHealth. MassHealth ignores this regulation and treats all transfers the same without considering the intent behind the gift. Each of us, at some point in our lives, has made a transfer without thinking about future nursing home care and applying for Medicaid - paying for a child’s wedding, helping support family members when someone loses a job, or paying for a grandchild to go to college. Presently, MassHealth imposes an ineligibility period even if at the time of the gift the applicant was in perfect health, without any inkling that nursing home care was in their future. This bill would force MassHealth to consider a number of factors in determining whether the gift was made for purposes other than to qualify for MassHealth. These factors would include, among others, whether the applicant was in good health at the time of the transfer and whether the transfer was made to relieve a relative’s financial difficulty. The bill would protect seniors from being unfairly penalized as a result of simply living their lives.
Protection of Retirement Benefits, House Bill 2097
MassHealth allows the spouse living in the community to retain their house in addition to $110,000 of “countable assets.” The purpose of this “spousal protection” is to enable the spouse to continue living in the community and to avoid his or her impoverishment. In addition to the $110,000, the spouse living in the community is entitled to keep certain noncountable assets which are excluded when MassHealth determines eligibility for the spouse in the facility.
Current regulations are based on an outdated idea of retirement resources.
Current MassHealth law was written with a mind toward protecting spousal retirement funds. However, the current regulations are based on an outdated idea of retirement resources. In past years, retired elders could depend on receiving a monthly pension from their employer. In addition, employees often stayed with one company for their entire lives. Over the last ten years, and especially in the current financial crisis, we have all seen the guarantee of a monthly pension disappear. Instead, the monthly pension has been replaced with retirement savings accounts such as 401(k)s and IRAs. In addition, employees are often forced to change jobs several times over the course of their working lives.
There are increasingly many gaps where the current law does not protect retirement funds.
MassHealth allows a spouse in the community to keep his or her monthly pension income. In addition, current law protects the 401(k) of a currently employed spouse of a nursing home resident. However, now that monthly pensions are less common, there are increasingly many gaps where the current law does not protect retirement funds. Again, I believe this is an oversight and reflects an outdated view of how retirement is financed. For example, although a 401(k) of a employed spouse is considered a protected asset under the MassHealth rules, the 401(k) is not protected if the spouse is retired at the time of application. Another trap for the unwary: if the elder changes employers, the 401(k) from the first employer becomes countable. Yet another pitfall: if a spouse changes employers and rolls their 401(k) over into an IRA, the funds are no longer protected. Our laws should not be so arbitrary in deciding who is protected and who is vulnerable.
The Committee seemed very receptive to our testimony in support of the these bills. Based on their questions, they appreciated that the bills would reduce some of MassHealth’s arbitrary and capricious interpretation of their own regulations. It remains to be seen what will happen during the budget discussion, but perhaps if we all let our representatives know how we feel, the bills could become law.
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