Massachusetts, Connecticut, and New Hampshire each play by different rules.
Introduction
So far in this series, we’ve established that Medicaid can recover from your estate, that your home is not as protected as you might think, and that giving assets away without legal guidance can create serious problems. This week, we address something that surprises many families: the strategies available to you depend heavily on which state you live in. Medicaid is a joint federal and state program, and the federal government sets only a floor — not a ceiling. Each state fills in the details differently, and those differences can be decisive.
Two Types of States
One of the most counterintuitive aspects of Medicaid law is how dramatically it can vary from one state to the next. Federal law establishes the minimum requirements that all states must meet, but it also gives states significant discretion to go further. The result is a patchwork of rules that can make the same asset strategy perfectly effective in one state and completely useless just across the border.
States fall into two broad categories when it comes to estate recovery. ‘Limited recovery’ states restrict recovery to assets that pass through the probate process at death. ‘Expanded recovery’ states go further, pursuing assets regardless of how they are titled — including those held in living trusts, transferred by beneficiary deed, or passing through joint tenancy. The difference between these two categories can literally determine whether your family keeps or loses the family home.
Massachusetts, Connecticut, and New Hampshire
Massachusetts is considered an expanded recovery state. This means that simply placing your home in a living trust or using a transfer-on-death deed may not be enough to protect it from Medicaid’s reach. The state can pursue recovery from assets that pass outside of probate, which significantly narrows the field of effective planning strategies available to Massachusetts residents.
Connecticut is also treated as an expanded recovery jurisdiction. Connecticut’s Medicaid program has historically taken an aggressive posture toward estate recovery, and families who assume that placing assets in a standard revocable trust will protect them are often surprised to find that the state can still make a claim against those assets after death. Proactive, irrevocable trust planning is generally required to achieve meaningful protection in Connecticut.
New Hampshire, while also operating a mandatory estate recovery program, presents its own nuances that require careful, state-specific review. The scope of recovery, the definitions used, and the availability of hardship exceptions are all spelled out in each state’s Medicaid plan — a document that practitioners must consult carefully. What works in one New England state may not work in another, and the stakes are too high to rely on general assumptions.
The Rules Can Change
The practical implication for our clients is that your planning must be tailored to the state where you live and receive care. A strategy developed for a Connecticut client cannot simply be copied for a Massachusetts or New Hampshire client. Even if you own property in more than one state, the rules of the state where you reside and receive Medicaid benefits will generally govern the recovery analysis.
It is also worth noting that the statutory and regulatory decisions a state has made today are not guaranteed to remain static. As long-term care programs continue to grow in size, states may adopt more aggressive recovery postures. Pennsylvania, a limited recovery state, has already included language in its own estate recovery statute authorizing the governor to expand recovery from limited to expanded without any additional legislative action. What protects you today may not protect you when you actually need care.
Understanding your state’s specific rules — and planning accordingly — is not optional. It is essential. Which brings us to the final and most important principle in this series, and the one with the most practical impact on what your family can actually do to protect itself.