Medicaid Applications in Massachusetts: When DIY is a DON’T

Getting Medicaid in Massachusetts (also referred to as MassHealth) to pay for your loved one’s home care or nursing home care can be a rocky road on a good day. When you try to DIY (Do It Yourself), the road can get even rockier. There is a lot of misleading, and even outright bad information out there. Working with an elder law attorney can help smooth that road considerably and separate fact from fiction in understanding the complexities of Medicaid.

To help clear up the confusion, here are some typical myths we encounter in our firm.  Try your hand in answering these True or False statements:

T/F – We were told that we had to spend dad’s money down to nothing before getting on MassHealth.

Answer: False. When you work with an elder law attorney, you may have the opportunity to protect a significant amount of your loved one’s assets, including the family home, before applying for MassHealth.

T/F: My accountant said I can gift $15,000 per year to each of my children.

Answer: This is correct in terms of taxes, but possibly detrimental to a Medicaid application if that gifted money cannot be returned. As elder law attorneys, we look at the whole financial picture, identify any red flags that would affect your MassHealth eligibility, and do our best to help you correct those errors, prior to applying.

T/F – I should withdraw cash and give it to my kids or hide it under my mattress before I apply for Medicaid benefits.   

Answer – False.  Medicaid will require an explanation for every financial transaction over $1,000 for the past five years prior to your benefits application. Large unexplained cash withdrawals will be a red flag and could lead to a denial of eligibility.

T/F – My daughter has been helping me around the house, I can pay her under the table because she is providing me a service and not cause any problems if I apply for Medicaid.

Answer – False.  Best to have an elder law attorney draw up a care contract and have her paid through a payroll company. This way Medicaid will not think these payments are a gift.

T/F – I can add my kids’ names to my deed while still retaining a life estate to use the property for the rest of my life.

Answer – True – however, this transaction must be completed more than five years prior to applying to Medicaid to pay for nursing home care. And remember – it is the life tenant who is responsible for the house bills and is entitled to any rents from the property even after he or she obtains Medicaid eligibility.

 Applying and obtaining Medicaid benefits is not for the faint of heart.  There are many traps for the unwary and applicants can easily be denied benefits.  To help you navigate these choppy waters, retaining an attorney who concentrates in elder law issues is essential for your family.  To help families understand the Federal, State and Local benefits available to seniors in addition to Medicaid, download free of charge our eBook “Understanding Benefits for Seniors” or one of our other eBooks on topics important to your family.

Generations Law Group helps families navigate the complex areas of estate planning, elder law – like MassHealth planning and applications, and probate to inform and protect loved ones of every generation.