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Abstract

Supplemental needs trusts are trusts designed to assist individuals with disabilities by paying for services and items that Medicaid will not pay for. Federal law, however, is unclear as to whether using one of these trusts automatically disqualifies someone from receiving Medicaid, thereby causing the circuit courts to split on their interpretation. Some circuits have held that the Medicaid statute allows states to enact laws prohibiting the use of these trusts while receiving Medicaid benefits based on the federal law’s statutory language. While other circuits have ruled that individuals can simultaneously receive Medicaid benefits and use supplemental needs trusts given the purpose of the trusts and the structure of the Medicaid statute. This article argues that, based on the traditional statutory interpretation tools and the relevant policy considerations, individuals with disabilities should be able to simultaneously receive Medicaid benefits while utilizing a supplemental needs trust.

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