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Key Definitions for 2025

Navigating complex public benefits requires a thorough understanding of multiple programs, each with its own eligibility standards, planning tools, and legal considerations. At Houston Harbaugh, we routinely advise clients and their families on how to best protect assets while maintaining access to critical benefits. This guide provides foundational definitions and updated figures for 2025 to support informed planning.

Medicaid
Medicaid is a joint federal-state program that offers health care coverage to individuals with limited income and assets. It is a needs-based and means-tested program that supports low-income seniors, people with disabilities, pregnant women, and institutionalized individuals. Eligibility varies by state but, depending upon the category of Medicaid, coverage can be obtained with income only restrictions while other categories typically require assets below $2,000 for an individual.  Qualifying for long term care Medicaid differs from qualifying for health care coverage Medicaid programs. With the median monthly cost of long-term skilled nursing care averaging $12,160.58 a month in Pennsylvania, proactive Medicaid planning can be important, whether or not a person has long term care insurance.  Although some strategies may be available in a crisis situation, ideally planning at least 5 years in advance of the need is preferred.  A properly drafted Medicaid Asset Protection Trust (MAPT) is often the preferred tool used to preserve assets for family in the event that a skilled nursing need arises in the future.  It's also important to be aware that all states are required to recover certain Medicaid costs when a person dies.  Pennsylvania to date, executes estate recovery only against a decedent’s probate estate.

MAPT
A MAPT is an irrevocable trust used to protect assets for family members by avoiding estate recovery at the death of the trust grantor.  It is often used in proactive Medicaid planning.  Assets transferred into the trust are no longer countable resources when applying for long term care Medicaid after five years.  It is vital to work with an experienced elder law attorney to ensure that a penalty is not triggered by inappropriate timing of the trust’s creation or drafting errors.

Medicare
Medicare is a federal health insurance program available to individuals aged 65 and older, as well as those under 65 who have qualified for Social Security Disability Insurance (SSDI) for at least two years or have certain medical conditions like end-stage renal disease or ALS. The program includes four parts: Part A (hospital coverage), Part B (outpatient services), Part C (Medicare Advantage), and Part D (prescription drugs). Unlike Medicaid, Medicare is not means-tested but does not cover long-term custodial care.

Supplemental Security Income (SSI)
SSI is a federal assistance program administered by the Social Security Administration (SSA) that provides financial aid to individuals who are aged or disabled and have limited income and assets. In 2025, the maximum monthly benefit is $967 for individuals and $1,450 for couples. SSI recipients usually also qualify for Medicaid, making it an important benefit to consider in long-term planning.

Social Security Disability Insurance (SSDI)
SSDI provides benefits to individuals who are disabled and have a sufficient work history to qualify under SSA rules. If you have a disabled child or adult child that does not have a work history, then the child can begin to get SSDI on a parent’s record if the parent has applied for and is already receiving SSA. 

Special Needs Trust (SNT)
A Special Needs Trust (SNT) allows a person with a disability to benefit from assets without jeopardizing eligibility for means-tested programs. A first-party SNT is funded by the beneficiary’s own assets and includes a Medicaid payback provision. A third-party SNT is funded by someone else, typically a parent or family member, and does not require payback. These trusts are essential tools for protecting benefits while allowing for enhanced quality of life for the beneficiary.

SECURE Special Needs Trust (SSNT)
Under the SECURE Act, retirement assets left to a disabled or chronically ill individual can be placed in a specially structured third-party SNT known as an SSNT. This trust ensures the beneficiary maintains public assistance while benefiting from a lifetime stretch of inherited retirement assets. There have been some changes with SECURE ACT 2.0 that have been favorable making a supplemental needs trust the beneficiary of retirement assets, including allowing a charity to be deemed as a designated beneficiary in the trust.

Pooled Trust
Assets in the Pooled Trust are used for the sole benefit of the individual with a disability to improve his or her quality of life. These assets are combined (or “pooled”) for investment purposes, so the trustee can have greater investment options. The trustee maintains separate accounts for each beneficiary. The charitable organization acting as the trustee can keep the remaining assets in a deceased beneficiary’s pooled trust and determine to what charitable purpose any remaining funds should go.

ABLE Accounts
ABLE Accounts are tax-advantaged savings accounts for individuals with disabilities that do not affect eligibility for means-tested benefits. In 2025, the annual contribution limit is $19,000, and up to $100,000 is exempt from SSI resource limits. Beginning in 2026, the eligibility age for ABLE accounts will increase from 26 to 46, expanding access to more individuals.

Veterans Affairs (VA) Pension with Aid and Attendance
This VA benefit offers financial support to wartime Veterans and their surviving spouses who need assistance with daily living. Eligibility requires meeting specific service, income, asset, and health-related criteria. In 2025, monthly tax-free benefits range from $1,515 for a surviving spouse to $2,795 for a married Veteran. Planning for this benefit includes observing a three-year look-back period on asset transfers.

At Houston Harbaugh, we understand the critical role that public benefits play in elder care and disability planning. Our team is here to guide you through the options and strategies available to ensure that your loved ones are protected, and your assets are preserved. For more information, contact Heidi Rai Stewart at hstewart@hh-law.com or 412.288.1846 to learn how Houston Harbaugh can assist.