New MassHealth Estate Recovery Regulations

A message from Attorney Dan Surprenant, Esq., CELA:

You may have recently received notification of changes to the MassHealth Estate Recovery policy. We are reaching out to provide you with more information and to offer our assistance.

What is MassHealth Estate Recovery?

Federal and state Medicaid law requires MassHealth to recover assets from the estates of certain MassHealth recipient after their death. This process is called “estate recovery.” The assets are used to reimburse (pay back) the state for the cost of care that MassHealth paid for the member.

MassHealth is making the first reforms to estate recovery policy in almost two decades to prevent undue hardship for recipient and their families and to support low and middle-income families retain some assets while remaining in compliance with federal and state law. MassHealth already allows certain deferrals and exemptions from estate recovery, as well as, taken a number of steps to provide relief from estate recovery requirements in response to the COVID-19 pandemic while also remaining in compliance with federal and state law. MassHealth’s proposed reforms will increase protections for low-income individuals and families by significantly reducing the number of estates subject to estate recovery and limiting the amount recovered in certain circumstances. MassHealth’s proposed reforms will increase protections for low-income individuals and families by significantly reducing the number of estates subject to estate recovery and limiting the amount recovered in certain circumstances.

Here are some highlights of the new reforms:

  • MassHealth will not longer seek estate recovery from probate estates of $25,000 or less.  Remember, good planning can avoid probate and therefore avoid a MassHealth lien.
  • A MassHealth lien can be waived if there was a caretaker child.  There are a number of facts that need to be in place to make this happen, such as that the child must have lived in the seniors home and provided care on a continual basis for two years prior to the senior’s admission to a nursing home or death.  Reliance on these facts being in place at the right time is risky and you should see a qualified elder law attorney to discuss the factors and risks.
  • There can be a partial waiver of a MassHealth lien if the income of the heir’s gross income is below 400% of the federal poverty level for two years prior to MassHealth’s notice of claim being filed.  This waiver can be partial but can protect up to $50,000 per heir and up to $100,000 per estate. 

The downside of these reforms is that there will be an increase in MassHealth’s discretion. While these reforms seem to allow for more waiver of liens in appropriate circumstances, we will have to see how MassHealth actually applies them.  In the new regulations, the word “will” is replaced with the word “may,” in an apparent attempt to allow MassHealth discretion to decide if they will apply the waiver or not.  This may make appeals of MassHealth’s decisions more difficult if MassHealth takes the position that their discretion should not be reviewed.  Therefore, we will need to wait and see if the new regulations actually provide more clarity and consistency.

MassHealth Estate Recovery Policy Update from November 2020:

What action should be taken next?

Know your options. Waiting until the MassHealth recipient dies to learn your options can have devastating and costly effects. Certain actions to protect your home and other assets from MassHealth must be taken while the recipient is alive. We work constantly to protect families’ assets in ways which comply with the complicated Medicaid regulations.  Contact our office to make sure your assets are protected from estate recovery, or if you would be able to achieve MassHealth to pay for your long-term care.

How can you help impact future policy?

There are still aspects of MassHealth’s estate recovery policy that are unfair and contribute to perpetuating or creating poverty.  The Massachusetts Chapter of the National Academy of Elder Law Attorneys (“MassNAELA”) has filed a very interesting bill to further correct the estate recovery program. A fact sheet about our bill is attached.  We urge you to contact your state legislators to support our bill (bill numbers: H1246 and S749) restricting the State from recovering more than what is mandated by the federal government.  MassNAELA’s efforts in the past have helped to avoid expanded estate recovery.  With your help we can be successful in reforming estate recovery further.

©Surprenant & Beneski, P.C. 35 Arnold Street, New Bedford, MA 02740, 336 South Street,   Hyannis MA 02601 and 45 Bristol Drive, Easton MA 02375.  This article is for illustration purposes only.  This handout does not constitute legal advice.  There is no attorney/client relationship created with Surprenant & Beneski, P.C. by this article.  DO NOT make decisions based upon information in this handout.  Every family is unique and legal advice can only be given after an individual consultation with an elder law attorney.  Any decisions made without proper legal advice may cause significant legal and financial problems.