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    MassHealth: Potential Changes to Pooled Trusts

    The Massachusetts Medicaid program – MassHealth – has strict financial eligibility criteria.  For a single individual his or her assets cannot exceed $2,000.  In assessing financial eligibility, MassHealth also looks to the means by which the person spent-down his or her assets – penalizing gifts by imposing a one month disqualification period for every $10,000 gifted in the last five years.  Funding a pooled charitable trust, however, is not considered a gift for MassHealth eligibility purposes.  For this reason, pooled charitable trusts are a common means of preserving assets so they remain available to improve the quality of life of a MassHealth recipient.  In Massachusetts, there are several pooled trusts managed by non-profit organizations.

    The assets in the pooled trust must be used exclusively for the benefit of the beneficiary.  The funds are typically used for supplemental needs not covered by MassHealth.  Commonly this includes transportation to and from the nursing home, companionship services, recreational activities, occupational and physical therapies not otherwise covered, uninsured dental costs, additional nursing home expenses such as cable and personal and household items.  Pooled Trust funds enable the disabled elder to age in place by supporting home maintenance, real estate taxes and other expenses that public benefits do not cover.  After the person dies a percentage of the assets remaining in the trust go to the non-profit organization managing the trust.  The balance of the trust is paid to MassHealth to reimburse their payments for care.  If there are remaining funds, they can be distributed to the family, however there are rarely funds remaining.  Funding a pooled trust allows an individual to immediately qualify for MassHealth, while ensuring he or she has funds available to meet needs not covered by public assistance programs.

    Unfortunately, MassHealth proposed new regulations that would prevent disabled seniors over age 65 from funding pooled trusts.  The regulatory change would end the twenty-year policy of allowing disabled elders to use special needs pooled trusts to maintain their quality of life.  The regulatory change will affect seniors who already live with a wide range of physical, mental, cognitive and neurological conditions.  The proposed regulations will also harm MassHealth – which is reimbursed for payment care from the funds placed in the pooled trust.  This recovery even extends to MassHealth benefits provided prior to the establishment of the pooled trust.  Annually this amounts to millions of dollars for the Estate Recovery Unit of MassHealth.

    In response to this proposed regulation, the Massachusetts chapter of the National Academy of Elder Law Attorneys, along with other pooled trust organizations, have encouraged state senators and representatives to file legislation to ensure that disabled seniors 65 and older would continue to be able to utilize these trusts.  The legislation is in the Health Care Finance Committee and had a public hearing on May 2, 2017.  House Bill H2074 and Senate Bill S629 propose to stop these damaging regulations.  To support this legislation, and in turn prevent the proposed regulations from being implemented, call your State legislator and ask them to contact the Health Care Finance Chairmen to move the bill out of Committee and continue the policy that has been benefiting disabled seniors in the Commonwealth for many years.

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