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Elder
Law Attorneys Support Legislation
To Preserve Elders Finances
Senior News Staff Report
Hingham - A recent forum on four bills being
supported by The National Academy of Elder Law
Attorneys, Massachusetts Chapter (NAELA) shed some
light on efforts to preserve the financial resources
of elders in the Commonwealth and allow them to live
independently for as long as possible. NAELA is
supporting these four bills in the 2009 – 2010
legislative session and according to the
organization, the passage would add little or no
cost to the state budget.
Payment to family members for care in the home, an
ability for a spouse of someone residing in a
nursing home to retain an Individual Retirement
Account, allow people to use a long-term care
insurance policy before entering a nursing home and
not put their home in jeopardy and the use of a
money market account rate which should allow a
greater amount of assets to be retained by a
community spouse
An Act to Help Families Care for Elders
proposed by Senator Montigny and Representative Khan
would permit seniors to pay privately for a family
member to provide personal care or managerial
services without later disqualifying the senior for
MassHealth long-term care. Currently MassHealth
considers a contract for family care to be a
disqualifying transfer of assets for less than fair
market value. This legislation would help maintain
an individual at home and make it financially
possible for the family member to provide care. It
requires that the contract services must be
reasonably priced and necessary to divert or delay
placement in assisted living or a nursing home. In
an economic climate that makes it impractical for a
family member to quit a job to take care of an
ailing parent, this legislation would make that
possible.
“Payments to family members who provide care are
currently being deemed disqualifying transfers in
the long-term care MassHealth application process,”
said Attorney Judith M. Flynn of the Elder Law
Office of Judith M. Flynn with offices in Hingham
and Mansfield. “The Division of Medical Assistance
(DMA) has taken the position that providing care is
a moral obligation, so they deem any payments to
family members as “gifts” despite the costs to the
family member of providing the care.”
“In many cases family members have left their jobs
to provide full-time care to mom or dad, or they use
their sick time and vacation time and have to take
unpaid time off, and they have their own families to
support,” said Flynn. “This bill would require the
DMA to recognize the true value of the services
provided by family members and allow elders to stay
in the community longer with the help of their loved
ones.”
An Act Regarding the Assets of Medical
Assistance Recipients proposed by Senator
Eldridge and Representative Peisch will help
community spouses of nursing home residents retain
their Individual Retirement Accounts (IRA’s) by
making them non-countable assets when the resident
applies for MassHealth. This change in the law will
permit a community spouse of a nursing home resident
to retain an IRA account from which they can receive
distributions. Currently, if the spouse has an IRA
account they may in some cases be required to
liquidate them which results in a significant
financial penalty. During this time of economic
uncertainty, the spouses of nursing home residents
need these accounts to allow them to live
independently and with dignity.
“Under the present regulations, the institutional
spouse’s assets must be reduced below $2,000, but
inter-spousal transfers are allowed,” explained
Flynn. “In order to transfer IRA funds to the
community spouse, however, there are often
significant tax consequences resulting from
liquidating the account in order to facilitate the
transfer. This bill would address this issue and
make some level of IRA funds non-countable in the
long-term care MassHealth application process.”
An Act Relative to Nursing Facility Long Term
Care Claims sponsored by Senator O’Leary,
Senator Chandler and Representative Fallon addresses
current MassHealth regulations to allow elderly
nursing home residents to exempt assets from
MassHealth estate recovery if they purchase
long-term care insurance which meets state
standards. Many elders have purchased long-term care
insurance thinking that they will qualify for the
asset recovery exemption because their policies meet
these minimal standards. What they may not know is
that use of their policies to pay for
community-based care prior to entering a nursing
home may disqualify them from the estate recovery
exemption.
This bill allows seniors who buy long term care
insurance to use that insurance to pay for
community-based care before they enter a nursing
home without disqualifying them from the MassHealth
estate recovery exemption. Allowing seniors to use
their long term care insurance for community-based
care will enable more elders to remain in their
homes rather than forcing them into institutional
care.
“The present regulations for long-term care
MassHealth benefits make the home a non-countable
asset, also called lien-buster protection, for an
individual who has purchased a long-term care
insurance policy with minimum coverage of $125 per
day for two years, or some lesser amount which
complied with the regulations at the time
purchased,” said Flynn. “The problem is that if an
elder used his or her policy benefits to obtain
in-home care and has less than the minimum coverage
remaining at the time they enter the nursing home,
they will lose the lien-buster protection. This Bill
would allow people to use their long-term care
insurance benefits to remain in the community as
long as possible without losing the lien-buster
protection when they do transition to nursing home
care.”
An Act To Correct Income Calculations For
Spouses Of Nursing Home Residents proposed
by Senator Candaras and Representative Fernandes
would address current MassHealth rules that a
community spouse of a nursing home resident is
entitled to a portion of marital income for her
support. This income is generated in part from any
assets which the spouse retains and is calculated by
use of a proxy rate of return on assets. This proxy
rate of return is greater than that realized by most
seniors, who generally use short term instruments
such as money market accounts. The use of
unrealistically high rates of return overestimates
the interest income actually received by the spouse
and results in an income allowance which does not
meet their needs.
“This Bill will require MassHealth to use a money
market rate of interest to calculate the spouse’s
income allowance, which will result in the community
spouse being able to retain a greater level of
assets for his or her future security,” said Flynn.
These bills are also supported by the Mass Home Care
Association, Mass Senior Action Council and the
Massachusetts Association of Older Americans. For
more information about these bills contact Deborah
Thomson at The PASS Group at (617) 227-6985.
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