To understand pooled trusts, you have to learn more about Medicaid. You also have to know how Medicaid differs from Medicare, which offers governmental assistance to eligible candidates.
Pooled trusts support Medicaid. For example, some people may not meet the eligibility requirements for Medicaid, so they may use this type of resource to pay for their healthcare costs.
Medicaid is a welfare plan that offers healthcare benefits to people of any age who have income limitations. Alternatively, Medicare is set up to cover the healthcare needs of people at least 65 years of age.
How Does A Pooled Trust Work In Connection With Medicaid Benefits?
While Medicaid offers welfare benefits for people on limited incomes, Medicare provides health benefits based on a person’s age. Therefore, a pooled trust for Medicaid is an innovative option for anyone whose income is too high to receive Medicaid. You can learn more about how the plan works by visiting a site such as KTS Pooled Trust online.
However, the definition of a Medicaid program as a welfare provider may be confusing, as a pooled income trust is typically meant to cover the home care needs of elderly people.
By comparison, Medicare Part A is free health coverage and, as noted, is age-based. Therefore, anyone, regardless of their income, can use the coverage. Your income only influences what you pay for the insurance.
How Medicare Supports Senior Healthcare
More specifically, Medicare comes in two essential parts – A and B. Part A, which is unrestricted, is defined as hospital coverage and includes stays in hospitals and nursing facilities.
Part B, or the medical insurance, covers doctor visits, ambulance transport, medical supplies, and vaccines. Recipients usually pay 20% for outpatient visits while the Part B plan covers the rest. Supplemental Part D coverage covers prescription medicines.
Using A Pooled Income Trust For Medicaid – How It Is Different Than Medicare
When seniors use a pooled income trust to cover home care, they have to meet certain state-imposed income limits. Both disabled people and seniors 65 and older can take advantage of this supplement.
People who use a pooled income trust, whose income exceeds the Medicaid requirements for healthcare, often must spend down to receive the coverage. This means they can only qualify for Medicaid if they pay the extra income – the amount that goes over the Medicaid limit. The excess is usually applied to medical bills.
Therefore, you might need to enroll in a pooled income trust if you’re 65 or older and your income is, say, $25 over your Medicaid allowance. However, when you pool the extra funds, you merely add them to your trust account. The money is then directed toward Medicaid-approved payments.
Enrolling In A Pooled Income Trust As A Senior
To enroll in a pooled income trust, you need to have a social security disability and be at least 65 years old. To set up the account, you must name a beneficiary, guardian, or person to serve as a power of attorney (POA). Legally, a POA is helpful to seniors, as they can request a trusted person to act on their behalf if they become impaired and cannot make healthcare decisions themselves.
Using a pooled income trust enables you to receive the income that would typically be directed to Medicaid for monthly costs. The money from the trust allows you to cover necessities and the cost of living, thereby making it easier to cover home care costs.
Pooled-income trusts are also called supplemental needs trusts or SNTs. If you need long-term care or care at home, the pooled money can be allocated, so you’re protected financially.
What A Pooled Income Trust Contains
As the name implies, a pooled income trust pools the assets of several people to protect their government benefits. While the assets are pooled together, they are also divided into separate sub-accounts for the primary use of each participant.
A Special Purpose Trust
Under federal law, a pooled income trust is also considered a special purpose trust. A properly drafted trust usually features the following characteristics.
- A nonprofit association establishes and oversees the trust.
- Each individual who contributes to the trust has a sub-account.
- All the funds are pooled for management and investment.
Expenditures Allowed Under A Trust
At this point, you may want to know exactly what expenditures a pooled income trust can disburse. Below is a rundown of some of the costs a pooled income trust pays.
- A personal needs allowance
- Health insurance premiums
- Medically necessitated costs
- A spouse’s maintenance allowance
- Legal or professional costs, such as attorney fees or accounting charges
- Living expenses cover the basic necessities – food, clothing, and shelter
- Prepaid burial costs
- Costs covering individual needs connected to vocational training, education, or entertainment
Non-Allowable Trust Payments
You cannot use the money from a pooled income trust for the following reasons:
- To loan money or gift money to another person. Only the recipient can receive the funds.
- To pay alimony and child support.
- To pay the costs for shared housing.
- To pay for the vacation of a family member.
- To pay off debts or past delinquencies.
- To pay the health insurance premiums of another person.
- To pay burial costs that are not allowed under state law.
- To pay income tax unless an actual liability for tax payment has been established.
Before you enroll in a pooled income trust, it is essential to delineate the expenses you can cover by using the money. Knowing how the faith works to your benefit will help you focus on how to use it so you’re protected financially.
Protect Yourself Financially
Think about how you can use the extra money you cannot use toward Medicaid, so you benefit financially and personally. Knowing what costs are allowed will help you meet your budgetary goals while covering your healthcare needs.
Check Out A Pooled Income Trust For Yourself
If you’re a senior who is 65 or older, a pooled income trust can be used to support your home care and Medicaid-approved healthcare needs. Review the advantages for yourself. If your income is not Medicaid-eligible, you can still join a Medicaid-based trust. Take advantage of pooling today. Make the most of your Medicaid coverage.