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On November 23, 2016, MassHealth issued proposed regulations that seek to implement sweeping changes to the Commonwealth’s health insurance program, also known as MassHealth. Thousands of seniors and disabled individuals rely on MassHealth benefits to provide for their skilled nursing and home care.  Any change to the program will therefore affect the benefits of the many Massachusetts citizens who rely on MassHealth for their critical medical needs.

The proposed regulations were issued following Governor Charlie Baker’s Executive Order 562, which instructed administrative agencies to streamline their regulations to “reduce unnecessary regulatory burden.”  However, the proposed MassHealth regulations could make the program more difficult to navigate, and possibly, result in an increase of denials, appeals, and lawsuits filed by applicants in order to protect their benefits.

Many of the proposed changes alter the current standards to qualify for MassHealth long-term care benefits.  Some of the most significant proposed changes to the long-term care regulations are:

  • Eliminate the ability of elderly individuals over age 65 to fund pooled disability trusts.  Pooled disability trusts provide a financial cushion to elders in nursing homes who rely on these funds to supplement their care needs that are not covered by MassHealth, such as dental care, hearing aids, and other personal expenses.  A pooled trust reimburses the Commonwealth from any funds remaining in the account upon the elder’s death.
  • Limit the ability of an elderly nursing home resident to transfer assets into a special needs trust established for the benefit of a disabled individual (other than a child), such as a disabled grandchild or other relative.  Funds in these trusts are used to supplement the disabled individual’s needs throughout his or her lifetime, filling in gaps in their public benefit assistance coverage.  As with the pooled trusts, the Commonwealth is reimbursed from any funds remaining in the trust upon the disabled individual’s death.
  • Expand the basis upon which MassHealth counts assets transferred to irrevocable trusts when determining an applicant’s eligibility for benefits.
  • Implement changes to the way in which MassHealth views real estate transactions and transfers.
  • Modify the existing regulations with regard to the purchase and treatment of irrevocable, immediate annuities, including prohibiting private annuity transactions.
  • Completely overhaul the Frail Elder Waiver program (the “FEW”), making it more difficult to qualify for community benefits under this program.  As of December 2, 2016, MassHealth will count the assets of the healthy spouse not receiving benefits under the FEW, which is a significant change from how the program has operated in the past.  This change will be implemented retroactive to January of 2014, which could result in people currently receiving benefits being terminated from the FEW program.
  • Implement a standard that all gifts made within the five-year look-back period are presumptively made to qualify for MassHealth, without any consideration for the health of the elder or the needs of the person receiving the gift at any time.
  • Provide MassHealth with complete discretion to determine the “fair market value” of a gift, thus granting the agency the ability to disregard appraisals or other objective methods used to value property.


NEW HOMESTEAD LAW: The Senate Bill 2406, An Act Relative To The Estate of Homestead, was signed by Governor Patrick on December 16, 2010.  The new law which replaces the existing homestead law will take effect on March 16, 2011.  The major point of the new law is that it affords an "automatic" homestead or protection against creditors of up to $125,000 in a homeowner's equity in their primary residence.  It also safeguards homeowner's of two to four family homes as well as mobile homes.  The mechanism of Declaring a Homestead is still available under the new law and still recommended as it protects a homeowner's equity up to $500,000.


On December 17, 2010, President Obama signed the "Tax Relief Unemployment Insurance Reauthorization and Jobs Creation Act of 2010," which extended the "Bush Tax Cuts."  As of 2011, the following will occur:

(1) the Estate and Gift Tax exemptions are reunified at $5 million per person;
(2) Estate and Gift tax rates are reunified at 35%;

There is now an opportunity for married couple to transfer up to $10 million worth of assets free of estate, gift and generation skipping taxes.  This opportunity will only last until 2012, at which time the gift tax exemption goes back to $1 million per person.

The Rodriques Homestead Exemption - A homestead can now be placed against property being held in a revocable trust.  On February 23, 2010, the United States Bankruptcy Court ruled that a Massachusetts Homestead Exemption can now legally be declared in favor of an owner whose property is being held by a revocable trust.  Therefore, if your property was deeded to a revocable trust previously and you have not filed a homestead you need to do so immediately.

Supreme Court Says Deceased Employee's Ex-Wife Can Get His Pension Benefits - A new Supreme Court decision illustrates the importance of making sure your beneficiary designations are up-to-date. The Court has unanimously ruled that an employer must distribute a deceased employee's retirement benefits to his ex-wife even though she had renounced the benefits in their divorce. Click here to read case Kennedy v. Plan Administrator for DuPont Sav. and Investment Plan (U.S., No. 07-636, Jan. 26, 2009).

Massachusetts Homestead Exemption Increased to $500,000 - As of October 26, 2004, the Massachusetts Homestead Exemption protects up to $500,000 worth of equity in one's primary residence.  To learn more about the Homestead Exemption click here.

Estate Planning, Elder Law and Medicaid Attorney