Today and throughout 2013, a Community Medicaid applicant/recipient is allowed a maximum monthly income of $800. This means that any amount above the $800 is to be surrendered to Medicaid otherwise Medicaid ceases until the spend-down is paid.
Many individuals in need of care and assistance choose not to apply for Community Medicaid, because they need every penny of their income to exist and cannot afford to surrender their excess income.
However, today it is no longer necessary to lose the excess income. There is finally a tool called pooled-income-trust that allows the community Medicaid recipient to protect their excess income.
How does the pooled income trust work?
Suppose an individual has an income of $2,800 per month and wishes to apply for Community Medicaid medical assistance. Medicaid would consider $2,000 of their income to be excess income and require the recipient to surrender that amount on a monthly basis.
However, by joining a Medicaid approved pooled-income-trust, the recipient is allowed to deposit the surplus income, in this case $2,000, with a Medicaid-approved pooled income trust, and ask the pooled income trust to pay their bills, such as rent, telephone, cable, food, credit card, mortgage, etc.
In doing so, they are able to use their excess income and not surrender it to Medicaid. There is no limit to the excess income. Any amount above the $800 is considered excess income and all of the excess income can be deposited in a pooled income trust.
All Medicaid-approved pooled income trusts are managed by a nonprofit organization and holds the assets of many individuals. Each account holder has their own account number, and they will receive a monthly statement indicating deposits and withdrawals.
A pooled income trust allows the recipient who has a large monthly income to use that money to pay their monthly expenses and still be eligible for assistance.
Medicaid recipients who have an income above $800 per month and wish to have both Community Medicaid medical assistance and protect and use their excess monthly income should consider joining a pooled income trust.
The pooled income trust program is available for both individuals who are applying for Community Medicaid or those individuals who are already receiving services through the Community Medicaid program and have a monthly spend-down.
Jack Lippmann is president of Eldercare Services in Fresh Meadows. He has more than 18 years of experience in the field of Medicaid services.