Governor Baker’s Proposed MassHealth Estate Recovery Expansion NOT Included in House Committee on Ways & Means FY 2017 Budget Recommendations

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By: Sarah Roscioli (BCLS 3L)

Overview of Governor’s Proposed Changes to MassHealth Estate Recovery. The Governor’s proposed FY 2017 budget would have, among other things, expanded MassHealth estate recovery to include non-probate property for those becoming eligible for Medicaid (nursing facility benefits) on or after July 1, 2016.

Legislative Update.  On April 13, 2016, the House Committee on Ways and Means made its recommendations for the FY 2017 budget, which do not include the Governor’s proposed expanded definition of “estate” for purposes of recovery against the assets of a deceased MassHealth long-term care benefits recipient.

Broadening Definition of “Estate.”  Currently, M.G.L. Ch. 118E, Section 31(c) defines “estate” as all real and personal property and other assets included in decedent’s probate estate.  The Governor’s proposed language would have redefined the term “estate” to include: (1) joint property, including joint tenancy and tenancy by the entirety; (2) life estates; (3) funded revocable trusts; and (4) other property passing by beneficiary designation.  The Governor’s proposed language specifically excluded annuities and life insurance, with the exception of payments otherwise includable in the decedent’s probate estate.

Recovery Deferred for Surviving Spouse.  It is important to note that the Governor’s proposed budget would not have hastened the Division’s recovery when the decedent is survived by a spouse, i.e., under Chapter 118E, Section 31(b), recovery may not commence until after the death of the surviving spouse.

Overview of Budget Approval Process. On January 27, 2016, Governor Baker and Lieutenant Governor Polito filed their budget proposal for the Fiscal Year 2017 (FY17).  In mid-April, the House Ways & Means Committee reported its budget to the full House for debate and vote.  Then, in mid-May, the Senate Ways & Means Committee will report its budget to the full Senate for debate and vote.  The House and Senate budgets will then be reconciled into a single budget which will return to each chamber for a vote.  Once the House and Senate pass the reconciled budget, it will go to the Governor to be signed.  Following any legislative overrides, the final budget would go into effect for the fiscal year beginning July 1, 2016.

The full text of the Governor’s budget proposal can be found here.  The full text of the House Committee’s recommendations can be found here.