Planning for long-term care brings up difficult questions, especially for married couples. If one spouse needs nursing home care, the other may worry about financial stability. Medicaid (known as MassHealth in Massachusetts) helps cover long-term care costs, but its rules can feel overwhelming. Without proper planning, you may have to spend down savings, risk losing income, or face unexpected financial burdens. Fortunately, Massachusetts provides legal protections to help the healthy spouse keep enough resources to live comfortably. Understanding how these rules work can help you make informed decisions and protect your financial future.
Protecting the Community Spouse’s Income and Assets
When one spouse enters a nursing home, the other—known as the community spouse—may worry about having enough income and assets to maintain their quality of life. Medicaid sets limits on what a couple can own while still qualifying for benefits, but Massachusetts provides protections to prevent financial hardship.
The Community Spouse Resource Allowance (CSRA) lets the healthy spouse keep a portion of the couple’s assets. In 2025, this amount can be as high as $157,920, though it changes annually. The community spouse can also keep a certain level of income under the Minimum Monthly Maintenance Needs Allowance (Minimum MMNA) to cover living expenses. If their income falls below this limit, they may receive some of the nursing home spouse’s income.
These rules ensure that a healthy spouse does not become impoverished while their partner receives long-term care. Careful planning can help preserve financial security while ensuring Medicaid eligibility.
Spending Down and Asset Transfers
Medicaid has strict asset limits, meaning many couples must reduce their countable assets before the spouse needing care qualifies for benefits. This process, known as spending down, allows couples to use excess assets in ways that benefit them without triggering Medicaid penalties.
Ways to spend down include:
- Paying off debt – Paying off a mortgage, car loan, or credit card balances can reduce countable assets.
- Making home improvements – Upgrades such as a new roof, heating system, or accessibility modifications are allowed.
- Prepaying funeral expenses – Purchasing an irrevocable burial plan can help protect funds.
- Purchasing exempt assets – A new car, medical equipment, or household items may be considered non-countable.
Transfers between spouses do not count against eligibility, but gifts to others may trigger a five-year lookback period, potentially delaying Medicaid benefits. Some exceptions apply, such as transfers to a disabled child. Planning ahead helps ensure eligibility while protecting assets.
Using a Medicaid Compliant Annuity
A Medicaid-compliant annuity can help protect a couple’s assets while ensuring the spouse needing care qualifies for benefits. When a couple has excess resources, the community spouse can convert those assets into a steady income stream through an annuity. Since Medicaid does not count this income as an asset, it remains with the community spouse instead of being spent on nursing home costs.
To meet Medicaid rules, the annuity must be irrevocable, have a fixed term, and provide equal payments. It must also name the state as a beneficiary for any remaining funds after the community spouse’s passing. If structured correctly, this strategy allows the healthy spouse to keep financial stability while securing Medicaid benefits for their partner’s long-term care.
Preserving the Family Home
For many couples, the family home is their most valuable asset, and Medicaid rules can raise concerns about whether it must be sold to pay for long-term care. Fortunately, Massachusetts allows the community spouse to remain in the home without affecting Medicaid eligibility. The house is considered a non-countable asset if the healthy spouse lives there.
However, after both spouses pass away, the state may attempt to recover Medicaid costs through estate recovery. To prevent this, couples can take steps to protect the home, such as placing it in an irrevocable trust or creating a life estate. These options ensure that the house remains in the family while still allowing the spouse needing care to qualify for Medicaid benefits. Careful planning can help preserve homeownership and financial security for the surviving spouse and future generations.
Ensuring Financial Security for You and Your Spouse
Medicaid planning can feel challenging, but the right strategies can help protect your spouse’s income, assets, and home while ensuring long-term care coverage. Massachusetts offers options to keep the community spouse financially secure, but early planning makes a significant difference. At Surprenant & Beneski, P.C., we will help you explore the best approach for your family’s needs. Contact us today to discuss your options and secure your financial future.