Policy on 'countable assets' counterproductive
I grabbed the box of matches, pulled out a fresh match, punched the wooden stem as hard as I could, and struck the match. I was ecstatic, I was surprised, and I was in pain. It was at that point in time that I realized that my fingers were burned. I ran inside and put my hand under cold water, as such a treatment was typical, and it made sense.
As I waited for the pain to subside, I remembered a quick treatment for burns. This treatment was to apply butter to the burn. I quickly grabbed a stick of butter and rubbed it all over my hand, and the pain went away; for a moment at least.
The current limitations on what is considered countable assets when applying for Medicaid and Social Security are much like the butter I rubbed on that burn. It caused the pain to go away, yet, only for a brief period of time.
Limitations on what is considered countable assets were put in place as the wealthy began to abuse the tax-exempt status of the trust funds of their disabled family members. D4-a, or Special Needs Trusts, were created to treat the burn of trust fund abuse.
Currently, there is a limit of only $2,000 of countable assets at any given time to maintain eligibility for Medicaid and Social Security disability, which disabled individuals are very dependent upon. Funds may be placed in a D4-a, or Special Needs Trust, to avoid countable status, but, they will be subject to a payback provision.
The payback provision states that when one dies the remaining funds left in the disabled individual's D4-a account will be given back to the state Medicaid agency up to the amount spent on the individual.
Such a provision would encourage one to spend all of their funds in anticipation of death.
The legislative intent was to remedy where they had been burned, yet the effect encourages poor fiscal management for disabled individuals. One must spend money, even if it's frivolous, to not surpass $2,000 in their bank accounts. One must also spend all of their D4-a savings, or it will be forfeited to the state.
Such fiscal decisions by the average person would be highly frowned upon, yet, when one is disabled such decisions are encouraged. These actions serve to trap our disabled population in a position of dependency. Without the ability to truly save money for future expenses, disabled individuals will always be dependent upon subsidized housing, food stamp vouchers and other services. Providing our disabled population with the ability to save money not only would promote self-sufficiency, it would also promote a healthier and more fulfilling lifestyle.
The ABLE Act, or Achieving a Better Life Experience Act, is a piece of legislation aimed at providing disabled individuals with the ability to save money and become more fiscally responsible. The act would create ABLE accounts that would be tax free and would have a non-countable status with regard to Medicaid and Social Security eligibility, until the ABLE account reaches $100,000, at which time the benefits would be suspended. The ABLE Act is the water on the burn, not the butter/grease that was created with the D4-a trusts.
Ryan Faust is a graduate student in the USC, MSW program.