What can be done when a disabled elderly or nonelderly person finds he or she has enough monthly income to cover all personal living expenses except for the cost of necessary home healthcare?
People in that position might want to consider participating in a pooled income trust, which allows them to receive Medicaid health services but continue to cover their own nonhealth expenses with their own income.
“The pooled income trusts exist for allowing people to stay in their homes,” said Lori Somekh, an elder law attorney in Bellerose.
To qualify for Medicaid home health services, a person is only allowed to have a maximum monthly income of $825, which isn’t enough to cover monthly bills for most people. People who have a monthly income above $825 might be able to pay their bills to cover regular expenses, but don’t necessarily have enough money to pay for home healthcare and need Medicaid to step in.
“It is a tremendous value to those who need community long-term care, home healthcare, and don’t think that they’re eligible for Medicaid,” said Irina Yadgarova, an elder care attorney in Rego Park.
Although pooled income trusts are particularly valuable for people who earn a middle-class or lower middle-class income, they are also sometimes useful for those with much higher incomes. In many cases, Yadgarova said, “They’re eligible, with trust planning, but they don’t know about it.”
When individuals participate in a pooled income trust, they pay all or almost all of their monthly income into the trust. They are allowed to keep a limited portion for such items as Medicare Part B and MediGap plan insurance premiums, though Yadgarova usually advises clients to use the Medicaid Savings Program for that purpose and have the MSP premiums paid out of the trust.
The trust then uses that money to pay a participant’s monthly bills for such items as rent, utilities, food, clothing and any expenses that go directly to that individual’s benefit. It also deducts either a flat fee or a percentage of the deposit, and trusts usually also charge an upfront fee of several hundred dollars.
If expenses are lower than the deposit in a given month, the excess can be designated for the participant’s needs in a future month. However, upon the participant’s death, any remaining funds become the property of the trust.
The trust’s monies must be used for a nonprofit purpose. For example, one that Somekh works with is the Theresa Pooled Trust, which benefits the Theresa Foundation of Lido Beach, LI, whose mission is to provide special needs children with direct support and programs focusing on art, music, dance and recreation.
Other trusts in Southern New York State include KTS, or the Keep Them Safe Pooled Trust, the UCS Disability Pooled Trust, Life, Inc. Pooled Trusts, the Lifetime Care Foundation and NYSARC Trust Services, associated with the NYSARC developmental disabilities services nonprofit, formerly known as the New York State Association for Retarded Children.
It’s not just individuals on their own who qualify for pooled income trusts. Disabled individuals with well spouses can qualify; the well spouse is expected to contribute something to the disabled individual’s care but also gets to keep a certain amount of the income. Couples in which both spouses need Medicaid can also qualify.
Many people assume their monthly income is too high to qualify for a pooled income trust, but Somekh said that’s almost never the case.
“If both of the spouses need home care, the spouses together can have up $1,209.00 and the balance goes into the pool. If only one person needs Medicaid, if the spouse that needs the care is close to the threshold, we would only deal with his income and the single person: $825 is the threshold. Say the wife needs home care and she gets $900.
“The person joins the trust and pays their surplus over to the pool every month,” thus remaining eligible for Medicaid, Somekh said.
“The trustee actually goes over with the individual, once they join, the very specific things the money can and can’t be spent for,” Somekh said.