Massachusetts’ Medicaid Estate Recovery: Updates and Opportunities for Further Reform

Medicaid is the primary source of coverage for long-term services and supports (LTSS) for older adults and individuals with disabilities. Federal law requires state Medicaid programs to seek reimbursement from certain Medicaid members’ estates for the cost of providing LTSS after the member is deceased, but states also have the option to recover the cost of all Medicaid-covered services provided. While this practice is meant to help states offset the costs of providing LTSS-related services, the burden of estate recovery falls on surviving family members with modest incomes who are often forced to sell assets, including the deceased member’s home, to resolve the claim.  

To investigate this issue in Massachusetts and explore options to minimize its impacts on Medicaid members and their heirs, Aurrera Health consultants authored the February 2024 issue brief Holding on to Home: A Primer on MassHealth Estate Recovery and Options for Reducing Its Impact on Members and Families in partnership with the Massachusetts Medicaid Policy Institute—a program of the Blue Cross Blue Shield of Massachusetts Foundation. Through this work, Aurrera Health identified policy options Massachusetts could adopt to reduce the state’s Medicaid estate recovery program’s negative effects on members and families. 

This work contributed to the evidence base informing policy options for Massachusetts to reform its estate recovery laws. The Massachusetts legislature passed a new law in September 2024 reducing the scope of their Medicaid estate recovery program to only what is federally mandated, limiting the collections Medicaid members face and the number of families who would be subject to estate recovery. This blog describes the new law and opportunities for further reform. 

Overview of Legislation 

Chapter 197 of the Acts of 2024 make numerous changes to Massachusetts’ long-term care system, including revisions to their Medicaid estate recovery program. Previously, Massachusetts recovered the cost of all Medicaid-covered services provided to certain older adults and individuals with disabilities. The new law scales the program back to the minimum federal mandatory requirements, meaning for estates of people who died after August 1, 2024, recovery is limited to only the costs of nursing home care, home and community-based services, and related hospital and prescription drug services for people aged 55 or older. It also limits recoveries for the estates of members who were enrolled in managed care. 

In addition, the new law exempts CommonHealth and personal care attendant services from estate recovery. CommonHealth is a buy-in option for children and working adults with disabilities who have a household income that exceeds the eligibility limits for standard MassHealth coverage. Both changes will likely require federal CMS approval. 

Further Opportunities for Reform 

While Massachusetts legislative changes will limit the number of families subject to estate recovery, there are more options they could consider to increase the transparency and further reduce the undue burden of this program. These options can also inform other states of potential options in reforming their estate recovery programs. As described in the Aurrera Health-MMPI report, additional actions for Massachusetts could include:  

Expanding exemptions to reduce the members and heirs subject to estate recovery.   

• Massachusetts could create more relief for caregivers by exempting from estate recovery any asset that is the sole income-producing asset of survivors and homes of modest value.   

• Like several other states, Massachusetts could waive the first $25,000 in value of any estate subject to an estate recovery claim to provide all estates with some form of relief.  

Increasing education, outreach, and transparency around the Medicaid estate recovery program.  

• MassHealth could educate trusted advisors and assisters who help individuals enroll in Medicaid to answer member questions on estate recovery and hardship waiver options. This could include working with certified Medicaid application counselors, hospital case managers, and nursing home staff.   

• The state could require MassHealth to publish an annual report on the impacts of estate recovery policies in the state, including data on hardship waivers, to analyze trends and inform future programmatic decisions.  

What’s Next

Recently, national media and local reporting in states like Ohio, North Carolina, and Minnesota  have highlighted the harmful effects Medicaid estate recovery has on family members of deceased Medicaid recipients, including legal obstacles and added financial and emotional stress for the families. Notably, reports discuss how Medicaid estate recovery disproportionately affects people of color, given disparities in homeownership and household wealth. Therefore, Medicaid estate recovery can perpetuate wealth disparities and inter-generational poverty among families of Medicaid members.  

In addition, Representative Jan Schakowsky (D-IL) reintroduced in March of 2024 the Stop Unfair Medicaid Recoveries Act, a bill to repeal the federal mandate for Medicaid estate recovery.  The increased attention on Medicaid estate recovery at the federal and state levels could prompt other states to make similar changes to their estate recovery program. 

Aurrera Health Group’s Capabilities 

To produce the February 2024 issue brief, Aurrera Health assessed Massachusetts’ Medicaid estate recovery policy and practices, how these compared to those of peer states, and how estate recovery affects marginalized communities. Aurrera Health reviewed literature, analyzed state and federal regulations, and included findings based on interviews with advocates and Medicaid officials in Massachusetts and other peer states to suggest policy and programmatic options the state could adopt to reduce the scope of their estate recovery program.  

If you are interested in learning about how Aurrera Health can assist you in informing conversations about estate recovery in your state, or our approach to policy analysis on other health policy topics, please reach out to Kristal Vardaman. 

Authors

Liz Stein [Senior Policy Consultant]

Mallika Mahalingam [Senior Policy Consultant]

Kristal Vardaman [Managing Principal]