Does Medicaid Reimbursement Take Priority Over Other Expenses?

My daughter's first-party special needs trust was paying for several services that weren't covered by Medicaid.  I know that if my daughter dies, the state has the right to recover funds from my daughter's trust for Medicaid services that it provided.  If there are outstanding bills from other service providers when my daughter passes away, can I pay those bills before paying back the state?

The answer to this question is state-specific.  Some states allow special needs trusts to pay off private medical bills before reimbursement for Medicaid expenses, but others don't.  It's best to consult with a qualified special needs planner before paying any final expenses from a special needs trust, and you should certainly speak with a planner prior to reimbursing the state.  For a list of planners in your state, click here.

Article Last Modified: 12/22/2015

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