Disaster Relief Assistance and Medicaid Eligibility for the Elderly and Disabled

With the widespread damage of Hurricane Harvey, a number of our clients are at least looking forward to funds from the Federal Emergency Management Agency (FEMA), the Red Cross, or their own private insurer to help pay for damages they sustained.   Because clients have become keenly aware of resource limits and the hazards of becoming over-resource, many have wondered how to handle these funds they are anticipating.

The HHSC follows §1613 of the Social Security Act (42 U.S.C. §1382b) and 20 CFR §416.1201 regarding the general treatment of resources and clients may rest easy to learn that receipt of these funds is not considered as countable income nor resources.  According to the Medicaid Eligibility and program handbook, Section 2270:

  1. In order for payments and benefits to be excluded from resources, such funds must be segregated and not commingled with other countable resources so that the excludable funds are identifiable. Interest earned on disaster assistance is excluded from resources.
  2. Government payments designated for the restoration of a home damaged in a disaster are excluded as income or resources in the month of receipt and as a resource in subsequent months, if the household is subject to a legal sanction if the funds are not used as intended.

This article is written by an attorney at Wyatt & Mirabella, PC. Always consult an attorney before making any legal decisions. To make an appointment today for a free consultation, please click here to contact us.