SPECIAL NEEDS TRUSTS PART 2

by Thomas D. Begley, Jr., Esquire, CELA

            This is the second article of a two-part series on Special Needs Trust.

Medicaid

            Generally, Medicaid is a welfare program that pays medical bills for the aged, blind and disabled who meet certain requirements.  It is a medical payment program, not a medical insurance program.  Medicaid is means-based with both income and resource testing.

            Medicaid pays for a very broad spectrum of medical services including hospital stays, physician services, community-based health care and nursing services, and prescriptions.  It also pays certain housing costs, and for some, vocational and employment services and transportation.  There are no deductibles, co-payments or financial limits on coverage.

 

Social Security Disability Income (SSDI)

            Unlike Supplemental Security Income (SSI), which is a means-tested welfare program, SSDI is an insurance program.  Coverage is based on quarters of Social Security insurance coverage during the applicant's employment.

            The disabled wage-earner is entitled to benefits.  The spouse and children of a disabled wage-earner are entitled to Dependent's Benefits based on the record of the retired wage-earner.  A disabled surviving spouse and surviving disabled or non-disabled children may all be entitled to Survivor's Benefits based on the record of the deceased wage-earner.

Medicare

            Medicare is a program that pays the medical costs of eligible beneficiaries.  Unlike Medicaid, which is a welfare program, Medicare is an insurance program.  Medicare pays for acute-care, hospitalization, limited skilled nursing care, doctor's fees, drugs and medications used in the hospital and home care under certain circumstances.  Medicare has open enrollment at any time without any problem with pre-existing conditions.  This is true of traditional Medicare and Medicare managed care.

            Medicare is divided into three parts.  Part A covers hospital care, Part B covers physician and outpatient services.  Part C is a new managed care program called Medicare Part C Plus Choice Program, which is essentially a Medicare HMO.

SSI/SSDI and Medicaid/Medicare Comparison Charts

            These two charts are designed to indicate, at a glance, the differences between SSI and SSDI, and Medicaid and Medicare.

            The following chart is designed to show at a glance the principal differences between SSI and SSDI.

ISSUE	SSI	SSDI
Basis	Welfare	Insurance
Benefit	75% of Federal Poverty Level	Based on Earnings Record
Must Apply for Other Benefits	Yes	No
Income Limits	Yes	No
Resources	$2,000	Unlimited
Transfer Penalty	Yes	No
Medical	Medicaid	Medicare After Two Years
Disability	SSA Definition	SSA Definition

            The following chart is designed to show at a glance the principal differences between Medicaid and Medicare.

ISSUE	MEDICAID	MEDICARE
Hospital Coverage	Yes	Yes
Doctor Coverage	Yes	Yes
SNF Coverage	Yes	Severely Limited
Home Care	Yes	Limited
Deductible, Co-Payments and Limits	None	Yes
Financing	Federal and State Tax Funds	Payroll Deduction Taxes and Premiums

Supplemental Nutrition Assistance Program (SNAP)

            SNAP is a food voucher program formerly known as Food Stamps.  The benefit can range between $298 and $1,789 per month depending on family size and other factors.  There is an income limit of 185% of the federal poverty level (FPL), but the income limit may be higher if the household has someone age 60 or older who has a disability.  Household income and resources are deemed.  There is a three-month lookback for transfers of assets and the penalty of one to twelve months depending on the amount transferred.

Federally-Assisted Housing

            There are two types of Federally-Assisted Housing. One is Section 8 Housing where the individual family selects the unit.  The other is Public Housing where the individual family is assigned to a unit.  Each program provides subsidized housing and rental assistance, which is based on 50% to 80% of the median income but varies, somewhat, by county.  Beginning July 1, 2025, there is a resource limit of $1,574 but individual housing authorities have been given authority to extend that deadline.  Household income and resources are counted.  Disability is not required.

Low Income Home Energy Assistance Program (LIHEAP)

            LIHEAP provides assistance with home heating and medically necessary cooling using natural gas and electricity.  Eligibility depends on household size.  Disability is not required.