Medicaid 101: What is a Pooled Trust and How It Works

Medicaid is a government program that provides health care coverage to people with low income and limited resources. Medicaid is a means-tested program, meaning enrollment is based on your income level and the assets you own. The Medicaid program allows states to set their eligibility requirements for who qualifies.

If you have disabilities and need long-term care, you may qualify for Medicaid benefits if you meet certain criteria like an income limit and asset requirements.

If you have more than $2,000 in assets, including bank accounts, investments, or any other property you can sell for cash, you won’t qualify for Medicaid. However, this rule has some exceptions: have your assets in a pooled trust like KTS Pooled Trust.

What Is A Pooled Trust?

It is possible to become Medicaid eligible sooner through a Pooled Trust, otherwise known as a (d)(4)(C) trust. If your assets are in a pooled trust account, they are not counted toward your total assets when determining eligibility for Medicaid benefits. A pooled trust is a special type of trust account that allows people with disabilities to save money while still receiving Medicaid benefits because the money isn’t considered part of their assets when determining eligibility.

Even though resources are pooled, each person who contributes to a pooled trust will have access to their money via a different “sub-account.” A person can keep some degree of control over their unique assets thanks to the sub-account. The assets are initially combined to facilitate the management, administration, and investment of the funds by those responsible for the trust.

Authentic non-profit organizations frequently create and manage pooling trusts. Thus, rather than creating their own pooled trust as they might with other types of trust, individuals will usually be required to join a pooled trust already existing.

The amount allocated to this account depends on factors such as monthly income, expenses, assets, and medical needs. The contributor will be assigned a Trustee to manage their assets on their behalf.

A contributor can use the trust money to pay for “supplemental needs” – goods and services that aren’t covered by Medicaid or Medicare but improve quality of life. Examples include over-the-counter medicines, nursing care, alternative medicine, vacations, entertainment, and private room upgrades.

However, you cannot use it to make gifts, pay or borrow from third parties, pay child support or alimony to another person, pay for family vacations, or pay for health insurance premiums for other individuals.

A contributor may die before the entire trust contribution has been returned to the trust. In this case, the money is paid back to the other disabled contributors in the trust, to the contributor’s beneficiary (usually a family member), or the state for reimbursement of Medicaid funds. Depending on state regulations and trust stipulations, these components may vary in combinations and amounts.

Each Pooled Trust is managed differently. It depends on the non-profit that manages the trust. Be sure you know what you are signing up for when it comes to fees, payment disbursements, and the services they offer. Select the right pooled trust non-profit to administer and set up your account.

How Does Pooled Trust Work?

Consider the case of a disabled person seeking Medicaid funds. Let’s also assume they own $50,000 in assets, including bank account balances, stocks, certificates of deposits, etc. They would be denied Medicaid coverage if they attempted to apply now since Medicaid rules require them to spend most of their assets before becoming eligible.

After moving the $50,000 to a simple(non-pooled) trust, which amortizes the money over time, you assume you now meet Medicare assets requirements. However, after submitting their application, they are informed that they do not meet the Medicaid requirement. Then after submitting your Medicaid application, you discover that you do not qualify for Medicaid.

Is there a reason for this? You must wait a few months after applying for Medicaid if you have transferred assets in the past five years (the “lookback period”). The justification is that you could have utilized those assets to cover the cost of your medical care.

It would have been simpler to solve this problem if they had established a pooled trust. In a Pooled Trust, assets are not subject to a penalty period and are not considered countable assets. The move to a Pooled Trust allows you to qualify for Medicaid, assuming you comply with other eligibility requirements.


A Pooled Trust is an effective Medicaid eligibility tool. Considering that this method requires a thorough understanding of disability requirements, your state’s pooled trust guidelines, and your particular circumstances, it is important to seek professional assistance from a Medicaid expert.