Friday, January 17, 2014

Analyzing the Circuit Split on Supplemental Needs Trusts & Medicaid

"Missing the Forest for the Trees: Why Supplemental Needs Trusts Should be Exempt from Medicaid Determinations," written by Jeffrey R. Grimsyer as a law student for the Chicago Kent Law Review in 2014, is a thoughtful analysis of the relationship between Medicaid eligibiltiy and supplemental needs trusts, also sometimes called special needs trusts or SNTs. 

"[T]he trust provisions have confused federal courts, causing a recent circuit split about whether assets contained within SNTs can be counted by state Medicaid agencies when they determine the trust beneficiaries' Medicaid eligibility and benefits.  On one hand, one can read [Section] 1396p(d)(4) as being mandatory, which would require all states to exempt assets in SNTs when determining Medicaid eligibility.  This would allow the beneficiaries to continue using SNTs and remain eligible for Medicaid, but would force the states, as payors, to cover more citizens under Medicaid.  On the other hand, one can interpret [Section] 1396p(d)(4) as being optional, which would permit each state to enact laws that disqualify beneficiaries of SNTs from receiving Medicaid.  This would enable states to save some of their limited resources, but would cause beneficiaries to lose their Medicaid benefits if they use SNTs."

Grimeyer argues the Medicaid section in question is "best read as being mandatory on the states based on the applicable statutory interpretation tools."

Estates and Trusts, Federal Cases, Federal Statutes/Regulations, Medicaid | Permalink

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