True or False? Because of the Medicaid Clawback, you shouldn’t open an ABLE account. False!

Many people think, or have been told, that they shouldn’t open an ABLE account for themselves or a loved one because of what is sometimes called “Medicaid clawback.” Here are the Facts that you should know:

Some people with disabilities receive certain types of Medicaid waiver benefits called Long Term Supports and Services (LTSS) and are subject to what is called Post Eligibility Treatment of Income (PETI).  One example could be someone who lives in a CILA and/or participates in day programs at a disability service provider.

When an individual who has received this type of benefits passes away, federal Medicaid law gives the Illinois State Medicaid agency, known as Health and Family Services (HFS) the authority to recover assets from the individual’s probate estate to reimburse Medicaid for benefits that were provided to the individual.  Assets in an ABLE account that pass into a person’s probate estate may be included. This is what some refer to as “Medicaid Clawback.”

Here are some facts to consider when thinking about ABLE accounts and “Medicaid clawback”:

  • ABLE accounts can be used to pay funeral, burial and outstanding disability expenses before going into the person’s probate estate.
  • The current average balance of an Illinois ABLE account is approximately $6,500, which can be put toward funeral, burial and outstanding disability expenses.
  • Illinois passed “ABLE Asset Protection” legislation which prohibits Medicaid from recovering certain other types of Medicaid benefits, for example the Medicaid buy-in program called Health Benefits for Workers with Disabilities (HBWD).
  • ABLE accounts are “living” accounts, designed to be used and enjoyed by the individual during his or her lifetime to maintain and improve health, independence and quality of life.
  • Disability advocates fought hard during the legislative process for ABLE accounts to be owned – always – by the person with the disability. ABLE account ownership helps assure equality of opportunity and greater financial independence for the person during his or her lifetime.

For more information about Medicaid clawback talk to your benefits specialist.

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