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Massachusetts Looks at Changing Special Needs Trusts

Old ladyA recent article in The Boston Globe, “MassHealth may force seniors to make hard choice,” explains that disabled seniors in the state may need to scrap the trusts they created to pay for extra services, like home health aides, or risk losing public benefits.
MassHealth, the state’s Medicaid health insurance program for nearly two million low-income and disabled residents, is contemplating changes to its eligibility requirements that would make it harder for residents over age 65 to establish special-needs trust (SNTs) accounts and still qualify for nursing home care and other health services from state and federal government programs.
Massachusetts officials say the proposed changes are designed to ensure that the state’s Medicaid rules adhere to the 2008 federal Medicaid guidelines, along with reducing the strain on the $15 billion MassHealth budget. These changes would require disabled seniors to spend down their personal financial resources, including money that’s held in a trust, before using MassHealth.
“As part of our regulations review, MassHealth proposed some clarifications to its eligibility regulations to ensure compliance with both federal and state law,” said Sharon Torgerson, a spokeswoman for MassHealth.
Advocates for disabled seniors say the changes will deny some residents small comforts that improve their quality of life. This change, they argue, could wind up costing the state more money by making those who are living independently move into more expensive nursing home care financed by taxpayers.
Individuals must get approval from their trust administrators to spend money, and they typically must submit bills for expenses like dental work not covered under Medicaid, health aides, clothing, and utilities.
The median annual cost for a shared room at a nursing home facility in Massachusetts in 2016 was about $135,000, according to an annual survey conducted by Genworth Financial, Inc.
Trusts have traditionally been a method for disabled seniors and their families to plan for long-term care—particularly if they have complex needs but don’t have children to help with expenses. To qualify for the state program in Massachusetts, an individual’s assets can’t exceed $2,000, and monthly income is limited to $100. Trust money had traditionally been exempt from those eligibility requirements.
However, in 2008, the federal Centers for Medicare & Medicaid Services clarified the rules, telling states that, in general, disabled individuals over 65 couldn’t transfer money into a pooled trust without a penalty. Essentially, that meant they couldn’t go on Medicaid until they had used up their assets. Officials explain that there are other factors considered in determining Medicaid eligibility, like the amount of money in a trust and why it was deposited.
Pooled trusts and transfers are complicated issues. These transfers don’t automatically make someone ineligible for Medicaid, a spokeswoman for the Centers for Medicare & Medicaid Services explained.
Massachusetts health officials in December held a hearing on the proposed changes. They’re considering comments from the public before making a final decision.
Reference: Boston Globe (January 3, 2017) “MassHealth may force seniors to make hard choice”

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