What Effect Will the Affordable Care Act have on Special Needs Trusts?
A general discussion of the effect of the ACA on future SNTs.
What is a Special Needs Trust?A Special Needs Trust is a mechanism for utilizing available assets in order to improve the life of a disabled person who is relying, or may need to rely in the future, on needs-based government assistance.
Will I still need a Special Needs Trust?Traditionally, a special needs trust was a mechanism for a disabled person to qualify for Medicaid health insurance while retaining the benefit of assets which could be used to enhance their quality of life. On January 1, 2014, the Affordable Care Act will force the end of health insurance companies' refusal to insure persons with a "pre-existing condition." For this reason, disabled persons will now be eligible to purchase private health insurance. If a disabled person has the assets available to purchase private insurance and has decided that private insurance will be preferable to Medicaid, then a special needs trust would not be required to protect their eligibility to Medicaid and their assets can then be used for their HEMs (health, education and maintenance) without the fear of losing health insurance, whether or not a trust is created.