Medicaid Policy
Medicaid Policy
Effective Date: January 1, 2014
No Previous Policy
1. Availability to the Trustee
If the trustee has the legal ability to revoke the trust and use the money for the trustee’s benefit the entire trust is available as an asset. The entire trust is available if the trust was created by the trustee or the trustee's spouse, and either the trustee or the spouse has the right to dissolve the trust or use the money.
In all other cases, the trust is not available to the trustee.
2. Availability to the Beneficiary
If the beneficiary’s access to the trust is not restricted, the full value of the trust is an available asset to the beneficiary. If access is restricted, see 3 and 4 below.
3. Medicaid Qualifying Trusts
Assets held in Medicaid Qualifying Trusts are countable assets and can make an individual ineligible for Medicaid.
A Medicaid Qualifying Trust may be irrevocable or revocable. Treat them the same.
A trust meeting the following criteria is a Medicaid Qualifying Trust (MQT):
· Is a trust or similar legal device set up other than by a will.
· Uses the individual’s or individual spouse’s assets.
· Is set up by the individual, the spouse or someone acting for the individual.
· Names the individual as the beneficiary.
· The trustees can exercise some level of discretion with respect to the distribution of payments to or for the benefit of the individual.
Count the assets held in an MQT as follows:
o If the trustee has full discretion or the individual has full discretion, count the amount in the trust as an asset.
o If the trustee has limited discretion, then count the amount the trustee could disburse as an asset. If discretion is limited, a transfer of assets may have occurred. See sec. 57-1.
The value of the trust is the maximum amount that the trustee can disburse to the individual under the terms of the trust. It does not matter if disbursement is actually made. Do not count any disbursements from the available portion of the trust as income.
4. Trusts set up before April 7, 1986
A trust established with the individual’s fund before April 7, 1986, solely for the benefit of the individual who is mentally retarded and lives in an ICF/MR facility is not a Medicaid Qualifying Trust. These trusts are exempt.
5. Trusts Set Up for Purposes Other Than to Qualify for Medicaid - Created by Someone Other Than the Individual or His Spouse
A. Aged, Blind, Disabled
The trust is not an available asset when:
· The individual is the beneficiary.
· Only the court or the trustee, who is not the individual the individual’s spouse or the minor individual’s parent, can get money from the trust.
The trust is not an available asset even when:
· The trust can be revoked by someone other than the individual.
· The individual receives regular payments from the trust.
Payments made to the individual from the trust count as income.
B. Medicaid for Medically Needy Families, Children and Medically Needy Pregnant Woman program
The principal is an available asset if there is access to the principal to meet the needs of a household member. It does not matter if access is restricted.
If the only way to access the trust is by approval of the court, require the individual to petition the court to release the funds in the trust. Follow the procedures in Sec. 511-5.
When disbursement is limited to specific needs or the principal cannot be invaded, decide if the trust is not available. If availability is not clear refer the question to the program specialist.
When disbursement of funds from a trust set up from an insurance settlement is legally limited to payment of medical bills arising from an accident, the trust is not available. Send information about the trust to ORS. ORS will pursue TPL coverage.