The ACA has a potential positive impact in giving estate planners
another option to offer clients.
The ACA protects the rights of persons with long term physical
and mental disabilities.
Persons who were unable to work and pay into SSA, were often
unable to earn sufficient credits to qualify for Medicare. Due to
pre-existing condition restrictions, they often were unable to
purchase health insurance even if they were able to afford the
premiums. They were forced to pauperize oneself in order to
qualify for Medicaid which was the only insurance many persons
with cognitive and physical disabilities with no work record
could qualify for. The ACA will allow persons with pre existing
conditions to purchase health insurance. Even if a person has an
income, s/he will be eligible for a reduced premium if s/he earns
less than $47,080 per year as of 2016.
The ACA expands access to Medicaid for persons who have
disabilities to up to 133% of the federal poverty level ($15,654
for an individual in 2016). There is no resource limitation for
this new expanded Medicaid program.
Important to note that the ACA does not cover long term skilled
nursing care nor payments for in home supports. In order to
receive coverage for long term care or in home supports, a person
will need to qualify for ‘standard’ medicaid.
ACA provides an option to special needs planning for those
persons who are only concerned with medical expenses and have
no need for long term care or in home supports.
Special needs planning will still be needed for the majority of
persons whose medical needs are far more extensive and whose
families want to protect their eligibility for life time care and
supports.
Special needs Planner will need to work with clients to determine
if someone who receives a windfall should transfer this money to
a self settled trust or retain control of his/her funds and rely on
ACA to purchase health insurance.
Issues to be discussed include:
- if the person has the legal capacity to manage his/her own funds
- if the person has sufficient funds to care for self over his/her
lifetime - if person is likely to need in home supports or long term skilled
nursing care in the future
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