Will Medicaid Count Your IRA or Pension Plan Against You, if You Need Long Term Care? In Massachusetts, the answer is probably "YES."

Under current Medicaid law in Massachusetts, the spouse of a nursing home resident is forced to take any money she has saved in an Individual Retirement Account and buy an annuity, in order to obtain Medicaid nursing home coverage for a spouse.

This treatment of IRA's differs from the full exemption that MassHealth does allow to the spouse if he or she is still working and has saved retirement funds in a plan that is managed by an employer or union. This inequity in the MassHealth application process adds cumbersome financial transactions on top of all of the other difficulties involved in a nursing home admission.

MassachusettsIn Massachusetts, it is more difficult for people who have saved for retirement. Under current regulations, MassHealth will always consider an Individual Retirement Arrangement as a "countable asset." Yet, the Massachusetts law does not count retirement money held by the employer of a spouse who is still working. Families and spouses are going through a time of crisis when a loved one is being admitted into a nursing home. Here is how the patchwork of regulations covers people in Massachusetts:

Protected
Partially Protected
Not Protected
Retirement funds held in an employer sponsored pension when the spouse of the person who needs care is still working.
IRA of the retired spouse of the person who needs nursing home care. The spouse can save her pension or IRA from being counted as an asset only if she transforms the pension or IRA into an annuity.
IRA or pension funds owned by the person who needs nursing home care.

We can advise you and your family on the best ways to preserve retirement saving. There are always alternatives to spending down assets for nursing home care.

Planning for Long Term Care must be part of every estate plan. If you do not have long term care insurance, or sufficient wealth to generate income that will pay for long term care, your potential need for Medicaid coverage must be considered when you plan the ownership and succession of your assets. We carefully consider this potential need for long term care, along with all of the other elements of your estate plan.
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