Understanding Pooled Trusts: A Lifeline for Disabled New Yorkers Seeking Medicaid
A pooled trust is a type of supplemental needs trust that allows disabled New Yorkers to qualify for Medicaid.
Here's the breakdown:
In New York, when disabled individuals deposit their income into a pooled income trust, that income is ignored for Medicaid budget calculations. This means that people seeking Medicaid for home care can place their “surplus” or “excess” income into a pooled trust, thereby qualifying for Medicaid without needing to “spend-down.” The best part? The money in the pooled trust is still available to pay their bills.
Understanding Medicaid Spend Down
One of the biggest hurdles for New Yorkers trying to get Medicaid for home care is having an income that exceeds the Medicaid limit. This extra income, often called "spend-down," usually needs to be spent on health care costs before Medicaid kicks in—similar to a deductible. This can be extremely challenging, if not impossible, for many.
For home care, the practical Medicaid income limits are $1,697/month for an individual and $2,288/month for a married couple. With everyday expenses, even those with higher incomes often struggle to have extra funds left over each month. This leaves many people in a tough spot: unable to afford the spend-down and unable to pay for care out-of-pocket. Enter the pooled income trust.
Who Can Use a Pooled Income Trust?
In New York State, individuals deemed disabled by either the Social Security Administration or New York State, such as those with SSDI, can use a pooled income trust to qualify for Community Medicaid with Long-Term Care, which covers home care. Many people using these trusts were not previously declared disabled by the Social Security Administration and need to provide disability documentation, along with the trust documentation, when applying for Medicaid.
Documenting Disability in New York State
Most people needing home care don't have much trouble being found disabled. However, required paperwork must be submitted for review, including:
LDSS-486T Medical Report (completed by a doctor)
Medical Records from the past 12 months
LDSS-1151.1 Continuation Sheet (if necessary)
MAP-751e Authorization to Release Medical Information – Though replaced by the HIPAA form, Medicaid sometimes requests it. We recommend submitting both.
Administering a Pooled Income Trust
Non-profit organizations manage pooled income trusts. Each member has an individual account, and funds can be used to pay bills in the member’s name. Bills are submitted to the trust and paid by the trust’s employees, often with the option for automatic payments for recurring expenses like rent. Cash withdrawals are not allowed.
Funds remaining in the trust after the member's death must stay in the trust. It’s advisable to use the funds regularly and avoid accumulation. Note that pooled trusts typically charge varying fees.
Monthly Deposits for Medicaid Eligibility
Medicaid eligibility is evaluated monthly. Depositing surplus income into a pooled trust each month eliminates that month's surplus, maintaining Medicaid eligibility.
Submitting a Pooled Income Trust to Medicaid
Setting up a pooled income trust alone doesn't notify Medicaid. Documentation of the trust and disability must be submitted to Medicaid for approval, which can take anywhere from two to six months.
If you need assistance with a pooled income trust for yourself, a loved one, or a client, please contact us.
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