Supplemental Security Income (hereinafter SSI) and Medicaid are income and asset sensitive public benefits that require planning to preserve. In Florida, one dollar of SSI benefits automatically brings Medicaid coverage. This is very important, as it is imperative to preserve some level of SSI benefits if Medicaid coverage is needed in the future. SSI is a cash assistance program administered by the Social Security Administration. It provides financial assistance to needy aged, blind, or disabled individuals. To receive SSI, the individual must be aged (65 or older), blind or disabled and be a U.S. citizen. The recipient must also meet the financial eligibility requirements.
Medicaid provides basic health care coverage for those who cannot afford it. It is a state and federally funded program run differently in each state. Eligibility requirements and services available vary by state. Medicaid can be used to supplement Medicare coverage if you qualify for both programs. For example, Medicaid can pay for prescription drugs as well as Medicare co-payments or deductibles.
The primary purpose of creating a Special Needs Trust is to continue the monthly tax-free SSI disability benefits and secure access to Medicaid. A Special Needs Trust (SNT) allows a personal injury victim to receive a personal injury settlement/award without disqualification from SSI or Medicaid. The reason for this is because federal law allows money to be placed into an SNT and it is not a countable resource for purposes of qualifying for needs based public assistance programs (See 42 U.S.C. 1396p). In order to create a Special Needs Trust the personal injury victim must meet the definition of disability contained in the Social Security Disability definition (See 42 U.S.C. 1382c).
There are limitations on how the money can be used from a Special Needs Trust in order to retain Medicaid eligibility. There is also a requirement that at death any remaining assets in the trust go to repay Medicaid for services provided before any family members may receive the remainder.
To learn more about how a Special Needs Trust can be utilized and its limitations review the SNT FAQ.
To learn more about Medicaid eligibility issues and special needs trusts watch the following videos:
Medicare and Medicaid: What's it all mean?
Special Needs Trust: Things to Consider
Medicaid: Do I Qualify?
Income: Too much to qualify for Medicaid?
Private Health Care and Public Assistance
Fundraisers: What you didn't know