Changes in Medicaid: Special Needs Pooled Trusts Still Available for Seniors

Since we published last month’s Proposed Chages in Medicaid article, outlining a few ways in which Illinois is attempting to change its rules on Medicaid eligibility, you may wonder what hasn’t changed about qualifying for Medicaid benefits in Illinois.  One method of Medicaid eligibility that Illinois has contemplated eliminating entirely, but still currently allows, is the special needs pooled trust for disabled people over the age of 65.

Ordinarily and generally speaking, to qualify for Medicaid, a person cannot own more than $2,000.00 in assets, a home, a car and a prepaid funeral.  Medicaid is intended to provide healthcare coverage for the indigent blind, disabled and aged.  However, one shortfall of this policy is that the indigent disabled usually have special needs and those needs are not met through Medicaid coverage.  To correct for this shortfall in policy, the federal government allows disabled people to qualify for Medicaid even though they have more than $2,000.00 in assets as long as they place those excess assets into a special needs trust.  That special needs trust can then be used to pay for the disabled person’s special needs which are not covered by Medicaid.  Special needs can include special medical and dental equipment, therapies, treatments, pharmaceuticals, custodial and companion care, clothing, personal products and transportation.  For a disabled person living in either the community or a long term care facility, a special needs pooled trust can increase quality of life enormously.  

While the federal government allows disabled people to hold their excess assets in a special needs trust and to use those assets to pay for their special needs, the government does impose some limitations.  For instance, the funds in the special needs trust can only be used for the benefit of the disabled person and any funds remaining in the trust at the end of the disabled person’s lifetime must be used to pay back the bill Medicaid has incurred providing benefits for the disabled person.  Those limitations are minor considering the benefit a disabled person receives from being able to preserve and use their own funds during their lifetime while still qualifying for Medicaid coverage.  The special needs trust is an exceptional tool to prevent the complete impoverishment of the disabled and it is very fortunate that Illinois has not yet attempted to eliminate this important option for disabled people over the age of 65.

For more information on how to prepare a special needs pooled trust, or for other questions you may have in the face of the proposed changes to Medicaid eligibility, contact the experienced elder law attorneys at Dutton & Casey, P.C. at www.duttonelderlaw.com or (312)899-0950.