Medicaid is the single-largest source for funding nursing home care that exists in the United States. In Massachusetts, the Medicaid program is called MassHealth. With as prevalent as it is, one would think the general population would be more knowledgeable about it, including who qualifies and exactly what it covers. However, there are a lot of myths and misconceptions that exist surrounding Medicaid, specifically with regard to long-term care coverage.

Here are just a few examples of some of those misconceptions and the truths behind them.

MYTH: Only poor people qualify for Medicaid and MassHealth
You do not need to be destitute to qualify for Medicaid. While it’s true that Medicaid does help people in great need pay for their long-term care, you don’t have to be broke to qualify. The general rule is that you cannot have more than $2,000 in assets to qualify for Medicaid, but this doesn’t take into account a number of potentially valuable assets that do not count toward this limit. For example, up to $878,000 in home value does not count toward this asset limit in Massachusetts in 2019. This amount can vary in each state. If you have a spouse or dependent relative living in your home, there’s no equity limit for the house. Ultimately, the asset limits that exist for Medicaid or MassHealth qualification can be a bit misleading.

MYTH: Medicare will take care of all my nursing home expenses
The coverage you get for long-term care through Medicare is very limited, as are the qualifications for people who can actually get that care. Medicaid is the best option to get the coverage you need for an extended nursing home stay.

MYTH: I can protect my assets from being counted toward MassHealth with a prenuptial agreement
Prenuptial agreements can be beneficial tools to implement before a marriage, but they do not have any effect on your Medicaid or MassHealth eligibility. The agreement can keep property separate between spouses in the event of divorce or death, but it does not keep property separate when looking at Medicaid eligibility.

MYTH: I should gift money to my children to “spend down” and qualify
While you can transfer a certain amount of money to other people tax-free up to a certain limit per year, you should keep in mind that this will have a negative effect on your Medicaid eligibility. Under Medicaid laws, there’s a penalty for people who transfer assets without getting some sort of value in return. That penalty is an additional period of time you have to wait to become eligible for Medicaid again, and the length of that time depends on how much money you transfer. This penalty only applies to any transfers made in the “look back period,” the five years before you actually apply for Medicaid. This also doesn’t apply to all transfers in that period. You can, for example, transfer assets to your spouse without any penalty at all.

Schedule Consultation with MA Elder Law Attorney

For more information about common myths surrounding long-term care coverage through Medicaid and the truth behind them, we encourage you to contact an experienced elder law attorney at Baker Law Group, P.C.