1st Person SNTs and Medicaid Recovery

1st Person SNTs and Medicaid Recovery

California recently upheld a decision by a lower court ruling that Medicaid could recover from a 1st Person SNT even though the Medicaid beneficiary was under 55.  They held that the provision in the Medicaid statute that prevents estate recovery of an under 55 recipient does not apply to (d)(4)(A) trusts.

I tend to agree with California’s decision.  The very purpose of (d)(4)(A) trusts is to allow someone to maintain their benefits even though they receive a gift, settlement or inheritance which would normally disqualify them.  It’s the trade.  You trade paying back Medicaid at death for enjoyment of the money during life.  I also look at the law and ask why the rule exists.  Well, here, the rule exists because we want people to be able to recover from a negligent party.  We want to hold people who cause serious injury accountable.  If we don’t allow someone to maintain benefits, many people will not pursue lawsuits and negligent people will not be held accountable.  Plus, the reality is, with medical costs at exorbitant levels, many of these individuals will end up on Medicaid when the money runs out any way.  Payback is the trade.

The concept of the (d)(4)(A) trust is a great one.  I think that if the under 55 provision applies, then we erode the purpose of the trust.  It is a perfect balance.  Unfortunately for some, I think California got the call right.


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