Using a Pooled Trust to Become Eligible for Medicaid
Gilbert was diagnosed with Parkinson’s in his forties, but was able to keep his job as a sales person with a local retail store for a decade afterward. By age 58, however, he reached a point when he no longer felt able to go to work for even part of the day. Gilbert’s disability made it possible for him to qualify for Medicare even though he had not reached the age of 65.
To pay for health care services not covered by his Medicare, Gilbert applied for Medicaid. His wife, Carmen, was still working from home as a graphic designer, and the couple’s combined income and assets put them over the Medicaid limit. Luckily, when only one spouse requires Medicaid for long-term care services, a married couple is allowed to keep income and assets above the single-person limit to protect the well spouse.
To reduce their income for Medicaid purposes, they asked their daughter to pay their cell phone, cable, and car service companies directly rather than send them a check each month. Direct payments to these companies by a person who is not “legally responsible” for them are considered “in-kind” and are not counted as income. Even with these reductions – and after deductions for Carmen’s private health insurance premium and Gilbert’s Medicare premium – they were still over the Medicaid income limit.
Gilbert was told he needed to “spend-down” this surplus income on medical expenses each month before Medicaid would pay for any medical services (Medicaid Spend-Down1). In his case, to satisfy the spend-down, he would be billed monthly by his home care provider in the amount of his surplus income. He was advised that the bill would be the amount of his surplus income regardless of the number of hours of home care he received.
To eliminate the spend-down requirement, he decided to put his surplus income into a supplemental needs trust (or pooled trust). Money in this type of trust is not counted as income so, once he did that, there was no need for a spend-down. Gilbert deposited his surplus income into the trust each month and became eligible for Medicaid. The trust used the funds to pay his rent and other personal living expenses. Had he had to pay his surplus to the home care agency each month, he would not have had enough money left to pay basic living expenses.
Once the Medicaid application was submitted and approved via Gilbert’s local Department of Social Services, they called Maximus2 at 1-855-222-8350 to request a Conflict Free Eligibility and Enrollment Assessment so a nurse could come to their house and see how much help Gilbert needed for his personal care. The couple’s daughter was present for this assessment to help point out Gilbert’s care needs and to be sure that Carmen, who was working from home, was not taking on so much of the care that she could not continue her job assignments.
After Gilbert was approved for home care, the couple called New York Medicaid Choice3 at 1-888-401-6582, to enroll in a Medicaid Managed Long-Term Care Plan.
The end result was that the couple was able to hire a home health aide for most of the day to assist with Gilbert’s personal care without worries that they could not meet their other basic expenses.
1Medicaid Spend-Down: If someone has too much income to qualify for Medicaid, they may qualify for Medicaid if they spend the income above the eligibility level (the excess) on medical bills. Further details.
2Maximus: A federal entity under contract with the State to provide a single point of entry into the Medicaid Managed Long-Term Care system. Maximus determines eligibility for long-term care services; it does not approve home care hours. Individual Medicaid Managed Long-Term Care Plans decide how many home care hours they will provide a given member. Medicaid recipients who need long-term care services must enroll in a Medicaid Managed Long-Term Care Plan.
3New York Medicaid Choice: Educates consumers about managed care plan options, and assists with enrollment. Plans have provider networks and vary in the type and amount of long-term care services offered, so it is important to be well informed.
Medicaid eligibility rules change, and the strategies to minimize out-of-pocket costs can be complicated and confusing. Approval for long-term care. including sufficient home care hours. is not guaranteed.
The financial situation of Gilbert and Carmen was relatively simple and straightforward and they were only a few thousand dollars above the income limit for Medicaid. The transfer and preservation of substantial assets require expert financial planning and legal advice. An elder law attorney and a geriatric care manager can be especially helpful during this process.
To find a geriatric care manager or elder care attorney that suits your needs, ask for recommendations from people you know and trust who have used them.
Geriatric care managers in your zip code area can be found here. Elder law attorneys who practice in Westchester (listed by town) can be found here. Other helpful resources and providers can be found here.