Can a disabled person have savings and qualify for Medicaid?

When it comes to questions and queries about who is eligible for the Medicaid and who is not, also all the limits and regulations that you follow to remain eligible, then it can all get a little too much to keep track of. Sometimes, your case is a case that is not common and you end up searching a lot on whether you would be eligible or not. Just like it is in case of a disabled person, but he does have some savings as well.

Before we discuss this case any further, it is important to understand that every state has its Medicaid programs, and hence, the eligibility criteria for these programs might differ accordingly.

Coming back to our case, let’s just talk about savings first. One thing is very clear. Disabled or not, every person, older than 65, who has countable assets worth $2000 or less, is eligible for Medicaid in any state. And he will remain eligible as long as the worth of his assets remains $2000 or less. If it increases that amount, then that person can no longer receive the benefits of Medicaid or any other government program.

Now, answering the question; Can a disabled person have savings and qualify for Medicaid? The answer is yes, a disabled person with savings can qualify for Medicaid, given that he developed his disability before he turned 26 and has an ABLE bank account.

An ABLE account is specifically created for disabled people, who won’t receive the Medicaid benefits and also save for any emergency or any other need. These accounts are funded by the parents and the relatives of the disabled person. You see, before, or without an ABLE bank account, an individual can only have a certain amount of savings, or else they lose their eligibility for Medicaid. Furthermore, the individual is not even allowed to receive help or funding from their parents or relatives to plan for his better future.

But with the help of the ABLE account, parents and relatives are allowed to help their disabled family members by contributing to the account. The annual limit for funding is $1500, collectively. This means that amount contributed by parents and relatives, collectively, cannot exceed $1500 in a year. The ABLE account funds are not counted as assets or resources and hence are excluded from any tax deductibles.

An individual is only allowed to have one ABLE bank account and they are the owner of the account. For example, in other special needs trusts, these kinds of accounts are managed by a trustee or the organization. However, when it comes to the ABLE accounts, the beneficiary themselves are the owners and have complete freedom over how they want to spend the funds, given that they fall under the “qualified disability-related expenses “.  Some of the examples of QDE are;

  • Housing
  • Education
  • Basic living expenses
  • Transportation
  • Healthcare
  • Buying assistive technology or hiring other services related to personal support.

However, in case the account owner is a minor or is incapacitated, then the authority of the account can be given to parents/guardians or any other person chosen by the disabled individual through signature.

In the case the beneficiary has a job and earns money and wish to contribute to the account, then they can do so. The amount contributed by themselves will not be included in the $1500 annual limit of funds contributed by family members and friends. Instead, it will be counted separately and has a limit of its own; $12760 as of 2020.

Overall, the total amount in account can increase up to $100,00. After that, the beneficiary will become ineligible for Medicaid.

The ABLE account was part of the ABLE Act that was passed in 2014. The name ABLE is an acronym for “Achieving a Better Life Experience”.

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