Pooled Trusts: Ensuring In-Home Care

POOLED TRUSTS: ENSURING IN-HOME CARE

It should not come as a surprise that most people with serious medical needs prefer to remain in their own homes and not go to assisted living or skilled-nursing facilities. The surprise, however, may be how easy it is for anyone, a spouse in a married couple or a single person, to qualify for MassHealth (Medicaid) benefits to ensure that this living option is possible on a long-term basis.

Most people are aware that, in order to be eligible for in-home (“community”) MassHealth benefits, an individual must reduce his or her countable assets to $2,000 (a principal residence, car, and some other assets are excluded). For a member of a married couple, this simply means transferring all of the couple’s assets to the “well” spouse’s name (regardless of the sum involved). Under the so-called Frail Elder Waiver, the “well” spouse’s assets and income are ignored, thus easily qualifying the “sick” spouse for in-home MassHealth benefits.

Single individuals, however, often believe that they must exhaust all of their resources on their care as the only way to reduce their countable assets to $2,000. Unfortunately, doing this leaves the individual impoverished and, in many cases, unable to make an at-home setting possible. For example, individuals with incomes at or under $2,022-per-month are entitled to retain all of their income, so can easily pay other household expenses, such as real estate taxes, utilities and food. However, if an individual’s income exceeds $2,022-per-month, he or she may keep only $542 each month and is required to contribute the balance of their income toward the cost of care. This precludes most single individuals from benefiting from community MassHealth coverage.

There is a solution: a Pooled Trust. This option allows a disabled individual to place funds exceeding the $2,000 asset limit into a special account, thus making the individual immediately eligible for MassHealth benefits. Pooled Trusts are recognized by MassHealth as a legitimate way to preserve funds. Assets are placed in one of the five Pooled Trust programs available in Massachusetts and continue to be available for the individual for the rest of the individual’s life. The obvious benefit is that funds are then available to help the individual remain at home.

The person whose income exceeds the $2,022 threshold, leaving them with only $542 each month, now has a pot of money from which to pay his or her living expenses. Funds may be used to enhance the individual’s life by paying for social activities, supplementing the care being provided by MassHealth, and, in most cases, paying for expenses related to maintaining a home.

The catch? Upon the individual’s death, the Pooled Trust retains a share of the funds and MassHealth makes a claim against the balance, seeking reimbursement for sums paid for the individual’s care (but only up to whatever remains in the account). This may consume the balance of the funds. However, the lifetime benefits usually outweigh these payouts. Most families are relieved to continue to have funds available for the individual’s life, not just to ensure that the at-home arrangement will work, but also to preclude the need for family members to feel as if they need to personally contribute toward the costs. In addition, the sum paid back to MassHealth is at the lower, MassHealth-contracted rate, so families can benefit from the reduced cost.

Pooled Trusts can truly make the difference between someone staying at home and being forced into a nursing home. Any individual who requires care and wishes to receive it at home should consider a Pooled Trust with whatever assets remain. Do not wait until assets reach $2,000 or even until they reach $10,000! Doing so significantly reduces the chances that the individual will be able to make the in-home arrangement work. Instead, plan on using a Pooled Trust when there is still $25,000, $50,000 or more. What a difference this can make!

Pooled Trusts do need to be carefully considered in each case and, in some situations, there are limitations on what expenses can be covered with Pooled Trust funds. In other cases, there are better alternatives. Anyone considering such a strategy needs to consult with a knowledgeable professional.