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Fund-raisers can help, hinder potential recipient


Dear Patty: A 20-year-old young lady from our church was terribly injured in an automobile accident. Her medical bills are piling up and a number of friends want to put together a fund-raiser for her to help pay for the costs of her care. The local bank is willing to set up an account in her name so she can pull funds from the account as needed. While we surely cannot pay for all of her medical costs, we believe that we can at least help. What do you think?

I can only guess at the amount of hospital, doctor, lab, and rehab costs this young lady might have. While fighting hard to recover her health, she has huge debt looming over her. What a mountain to climb!

Fund-raisers are the community’s way of taking care of their own. But a fundraiser may complicate her medical debt more than you know. You are wise to ask questions.

An adult who is disabled and who has low income and little or no assets may be eligible for Supplemental Security Income (SSI) up to $698 per month. This small monthly income will not come close to paying for the rising medical debt. But if a disabled person gets just $1 of SSI, that person is eligible for Medicaid, a cost-free health insurance for disabled persons.

If a SSI applicant receives any cash in the month (except for a loan and for other very limited reasons), that receipt of funds is classified as income. Receipt of $718 in a month will assure that the applicant will be denied SSI eligibility and the attendant Medicaid health insurance.

Additionally, if a person has more than $2,000 of countable assets in the bank (assets are defined generally as cash but can also be other tangible property), then the applicant will be denied eligibility for SSI and the attendant Medicaid.

It is possible that Medicaid could pay all of the hospital, lab, physician, and rehab costs, but only if the young lady is eligible for Medicaid. The most expedient way for her to access the Medicaid program is through SSI.

That is not to say you should not have a fund-raiser. If the fund-raiser is for family expenses instead of funds to the young lady, then the money may not be countable as her funds. Or a parent, court, or guardian may want to create a trust for her and the money collected could be diverted to a supplemental (also known as special) needs trust that will protect her eligibility for SSI and Medicaid.

I would suggest that before you start the fund-raiser and put funds in an account for the young lady, it may be advisable to visit with the young lady, her family, and an attorney who is knowledgeable about SSI and Medicaid eligibility rules.

Because the elder community is often dealing with disabilities, a certified elder law attorney is well equipped to aid in planning for this young lady’s disability.

Patricia Flora Sitchler is a certified elder law attorney and assists families in planning for disabled children. Patty is a resident of La Vernia and maintains an office in San Antonio as a shareholder in the firm of Schoenbaum, Curphy & Scanlan, P.C.

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