What you Should Know: The Proposal to Expand MassHealth Estate Recovery

If you haven’t heard, Governor Charlie Baker’s FY 2017 budget includes a proposal to expand MassHealth estate recovery to include non-probate property.

This proposed new law involves the MassHealth lien that is attached to an estate of a deceased person who dies owing the state money as a result of receiving MassHealth benefits. Currently, the lien only attaches to probate property, or property that is in the deceased's name alone. MassHealth recovers its expenses from the probate estates of individuals who received coverage of nursing home care or any other MassHealth benefits after age 55.

Whereas probate property only includes assets owned by the deceased beneficiary solely in his or her name, the proposed law will allow MassHealth to lien any property the deceased owned including joint property, accounts with beneficiary designations, assets in trust, and real estate in life estates. This puts surviving spouses at risk of being impoverished by a MassHealth lien. Keep in mind; at $10,000 per month, nursing home costs quickly demolish most folks’ savings.

This new proposed law is essentially being “snuck in” to the Massachusetts budget through “Outside Section 11,” and states the following:

The term ‘estate’ shall mean any interest in real and personal property and other assets in which the individual immediately prior to death had any legal title or interest, to the extent of such interest. This shall include interests in real and personal property and other assets that would pass to a survivor, heir or assignee of the decedent through joint tenancy, tenancy by the entirety, life estate, living trust, right of survivorship, beneficiary designation or other arrangement.

How exactly is “the extent of such interest” to be determined? Does this create title problems? How would the claim even be enforced? There are many holes and issues with this new proposal, and we know it does more damage than good because it has been tried before.

This proposal was actually enacted by the Massachusetts legislature in July 2003 under Governor Romney’s recommendation, and was repealed on July 23, 2004 due to delays and confusion. This did anything but save costs, and actually cost the Commonwealth more money.

In short, we can see that this proposed new law is not only vague and confusing, but it will no doubt negatively impact anyone who is concerned about the cost of potential long term care.