Shirley B. Whitenack, Esq. [1], Florham Park, New Jersey
Under the Affordable Care Act (ACA), a hybrid system comprised of Medicaid and state-based insurance exchanges seeks to extend health coverage to all Americans. How will this shape the life care plans that families establish for loved ones with disabilities? Will special needs trusts (SNTs) continue to provide the foundation for their financial security?
Anyone who will continue to rely, to any extent, on means-tested government programs such as Medicaid and SSI (Supplemental Security Income), as well as those without the requisite capacity to make their own financial decisions, will still benefit from the creation of an SNT. But for many families, the choice of Medicaid versus private insurance will not be intuitive. The major considerations include:
- Understanding differences in health care coverage ̶ The most dramatic consequence of ACA is that, for the first time, private insurance will now be a practical alternative for many families whose loved ones have special needs. Pre-existing conditions should no longer disqualify individuals with special needs for medical coverage or lead to premium rates. Annual and lifetime coverage caps will be eliminated. And policies available through insurance exchanges must cover a menu of “essential benefits” that include speech, occupation and physical therapy for individuals born with disabilities. But private health insurance will continue to exclude long-term assisted living and certain medical devices, such as wheelchairs or specialized beds. New Medicaid programs providing care coordination and improved delivery of service may not be available through private means. On the other hand, many physicians do not accept Medicaid, while private insurance can give individuals access to the specialists of their choice. Some families may opt for a Medicaid wraparound for their private insurance, in which case, premiums for private coverage could be paid out of an SNT.
- Affordability of private insurance – Premiums will be capped on state-based insurance exchanges and sliding-scale subsidies will be available to those with incomes from one to four times the federal poverty level. Still, some individuals and families will remain dependent upon Medicaid for financial reasons. Overall, the Medicaid rolls are likely to expand since states now have the option to extend eligibility to those with incomes up to 133 percent of the federal poverty level.
- Need for non-medical services – State-specific Medicaid “waiver” programs provide for essential non-medical needs, including residential programs, in-home services, vocational training and day care. Many individuals and families will continue to depend on these supports to ensure community-based quality of life.
Analyzing these tradeoffs and understanding how to navigate the new health care system may give rise to a new cottage industry. In some cases, special needs attorneys offering a holistic approach to life planning may expand their services to include such advice. In any case, many families will continue to rely upon SNTs to ensure that loved ones have access to valuable government services without becoming impoverished.
For more details concerning the ACA, see “The Affordable Care Act – An Update” in SNA’s Capitol Connection.