This article is intended as a condensed road-map for using a pooled income trust to eliminate the Medicaid spend-down. This article contemplates that the individual is applying for Medicaid in order to obtain home care services. The sequence of events will be different if that is not the case.
NEW AUGUST 2021 - See new HIPPA form and new DISABILITY form required! Click here
Watch this taped seminar by David Silva, Asst. Director of the Evelyn Frank Legal Resources Program, explaining pooled trusts. (July 16, 2013).
A pooled income trust is a type of Supplemental Needs Trust operated by a non-profit organization for the benefit of many people with disabilities. There are many Pooled SNTs in New York, with different minimum deposits, fees, and policies. Thus, the process of enrolling in a pooled trust varies by organization.
There are two main steps to enrolling a Pooled trust in order to reduce the surplus or spenddown.
8-2019 UPDATE ABOUT TIMING of APPLICATION AND JOINING TRUST: We used to recommend applying for Medicaid first with a spend-down, and then enrolling in a pooled trust while the Medicaid application was pending. The reason for this timing was that approval of the trust would cause extensive delays in processing the application. In order to expedite the application, we recommended first applying and accepting the high spend-down that would result, and then joining the trust and requesting rebudgeting.
In March 2019, a federal court approved a settlement in a class action called Garcia v. Banks, which requires NYC HRA to approve Medicaid applications in 90 days if the application involves making a finding that the applicant is "disabled." Below, you will see that anyone age 65+ who wants to use a pooled trust to shelter income must request that the local Medicaid agency determine that they are "disabled." While 90 days may still seem like a long time, HRA was taking much longer to approve pooled trusts. The 90-day limit is based on federal regulations. However, the court order only requires the 90-day limit if the trust is submitted with the Medicaid application, not if the trust is submitted separately. Therefore we now recommend enrolling the pooled trust first, then submitting the trust with the Medicaid application and the other forms described below. In the application, the applicant may still request HRA/DSS to approve the trust initially with a spend-down in order to expedite it, and to approve the pooled trust and re-budget the case later.
Generally, to enroll in a pooled trust involves submission of the following:
GIS 20 MA/03 – Clarification of GIS 19 MA/04, “Clarification of Policy for Treatment of Income Placed in Medicaid Exception Trusts” -- rescinds the requirement from GIS 19 MA/04 that a Power of Attorney may be used to establish an SNT or pooled trust only if it has a Statutory Gift Rider. See more about this change here.
For help determining the appropriate amount to contribute each month to eliminate your spend-down and obtain the Medicare Savings Program, you can use this Excel worksheet.
Once approved, the pooled trust organization will send you the documents you will have to send to Medicaid to get your spend-down rebudgeted. One of these is a "Verification of Deposits" or VOD verifiying that you deposited your spend-down for at least one month. You must deposit the spend-down every month.
Step 2 - Apply for Medicaid Home Care - and Submit the Pooled Trust Documents and Proof of Disability
Next, apply for Medicaid with a spend-down. In New York, certain categories of Medicaid applicants can get Medicaid health coverage even though their income is over the income limit. Those who receive Medicaid home care services can "meet" their spend-down by getting billed for their home care. They will get billed for the amount by which their income exceeds the applicable income limit (e.g., a single person with $1279/mo. countable income would get billed $400/mo [$1279 - $895 = $384])(2020). It is those clients who are unable to afford to pay this bill who are most appropriate for a Pooled SNT. Read this memo for more information on eligibility for Medicaid home care.
If you choose to submit the trust documents along with your Medicaid application, it may take 90 days for Medicaid to approve the application with the trust. In your cover letter you can ask Medicaid to initially approve your application with a spend-down, and to process the trust separately after your application is approved. This way you can enroll in a Managed Long Term Care plan right away, or if you've applied based on "Immediate Need," start receiving home care services right away. Eventually, you will ask Medicaid to reduce your spend-down to zero retroactively to the month you began contributing to the trust. For this to work, you must continue sending your contribution to the trust every month. However, once you are approved for Medicaid homecare with a spend-down, you will be expected to pay your spend-down to your Managed Long-Term Care plan every month, which you will be unable to do because you're sending it to the trust. You can explain to the plan that your spend-down will eventually be retroactively reduced to zero, and therefore the plan will be able to back-bill Medicaid for the spend-down.
Here are the documents that you must submit to the Medicaid agency to ask Medicaid to reduce your surplus or spend-down because you are depositing income into a pooled trust. For all documents below, send copies and keep the originals for your files.
There are two things you have to show to the DSS: 1. that you are enrolled in an SNT (and making contributions), and 2. that you are disabled:
STEP THREE - Follow-Up and Ensuring Medicaid Re-Budgeting Done Correctly
If you have submitted the SNT and disability documentation to your DSS along with the Medicaid application, it should ,take 90 days maximum to approve the application with the trust. In NYC, the Garcia v. Banks settlement requires this. If you submitted the SNT separately after submitting the Medicaid application, they will typically take many months to process this information. You should eventually get a written notice stating that your Medicaid case has been rebudgeted with no spend-down. Make sure that the effective date of this notice is correct - it should be the month that you first began contributing your excess income to the trust. If it is not correct, you may have to request a Fair Hearing to appeal the notice (click here to request a hearing).
As you can see, this is one of the most complicated things you can do involving Medicaid. Many people find that it is worth hiring a private elder attorney or geriatric care manager to help with this process. Some free legal services may be available to help, also. For more in-depth information on SNTs, including how an SNT affects eligibility for other public benefits, see our Training Outline for Advocates.
TROUBLESHOOTING - Each local Medicaid office may have contact people to troubleshoot problems.
In NYC - here are suggested contacts within HRA. CAUTION: Time limit to request a hearing can run out, even when you are trying to informally advocate. Keep your eye onthe deadlines!
HOME CARE CASES - where client seeking or has MLTC or CASA personal care or CDPAP, Medicaid app and trust documents filed at 785 Atlantic Avenue, 7th Floor, Brooklyn, NY 11238
NON-HOME CARE CASES - Medicaid application and trust filed in "regular" Medicaid office or Spend-Down unit
Eileen Fraser-Smith firstname.lastname@example.org TEL (929) 221-0868/69
Fax (718) 636-7720 (updated June 2016)
This article was authored by the Evelyn Frank Legal Resources Program of New York Legal Assistance Group.