Parents of children with special needs, advocates, and care providers have followed recent news about health care funding with worry, because health care funding proposals would cut Medicaid funding by 25 percent or more. While lawmakers in Washington have not passed these proposals to date, they raise the question of how parents should plan for their children’s healthcare when there is no assurance that Medicaid will be a safety net in the future.
Under these proposals, only a small group of children with special needs would qualify for Medicaid money from the federal government. The restrictive definition of “disability” under the Better Care Reconciliation Act would mean that children who qualify for Medicaid because of their family’s income, rather than because they have special needs that fall under the “disability” definition, could lose many essential services. Due to decreased federal funding, much of the financial pressure would fall to the states, which would likely begin cutting what they perceive as the least crucial services and treatments.
What can parents do to hedge against an uncertain future of healthcare funding? First, maximize your child’s Medicaid and SSI benefits now. Start by checking the amount of benefits your child receives and working on future planning to increase those benefits to the maximum allowed, if possible. Setting up a special needs trust (SNT) and funding it with money that you plan to use for future care that may not be covered by Medicaid can help as well. SNTs prevent assets from being counted as resources for purposes of Medicaid and SSI eligibility. Further, family members directly funding a third party SNT can help avoid Medicaid payback requirements – state laws that mandate using the estate of a person with special needs to pay back the Medicaid program for healthcare expenses incurred for the person with special needs.
Second, review your future plan or make one if you do not have one. Seek out legal advice to maximize the amount you are saving for future costs for your child with special needs. You may consider allocating a larger portion of your life insurance proceeds or your estate in general towards your child with special needs’ care. You also could increase the death benefit in your life insurance policy. Finally, update your letter of intent and other documents to account for any changes since you last updated or drafted it. Make sure these documents accurately explain your child’s healthcare needs and costs.
Taking these steps can help plan for the possibility that the government slashes Medicaid funding and protect your child with special needs in the future. Changes in the law can come at any time, and there is no substitute for future planning.
Rubin Law is the only law firm in Illinois exclusively limited to providing compassionate special needs legal and future planning to guide our fellow Illinois families of children and adults with intellectual disabilities, developmental disabilities, or mental illness down the road to peace of mind. For more information, email us at email@rubinlaw.com or call 866-TO-RUBIN.
