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Title 8: Medicaid Page 65 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised July 10, 2026 Medicaid Qualifying Trusts Trusts established for medical payments are a third-party resource. Do not count trust principal and income if the terms of the trust specify that they are available only for medical care. The principal and income for these trusts are not countable as income and resources in determining eligibility. Compare the total countable resources, including the amount from the trust, to the resource limit of the coverage group under which the applicant seeks assistance. (EXCEPTION: Do not count resources for MAGI-related Medicaid.) If the applicant is ineligible by counting income and resources of a Medicaid qualifying trust according to the policies of the coverage group, determine whether the applicant is eligible under any other coverage group.

1. Ms. P receives SSI. She has a Medicaid qualifying trust that provides for “care and keep.” Any of the principal of $12,000 can be used to meet her living expenses, but no money is currently provided for her. $12,000 is added to Ms. P’s other countable resources. Ms. P is not eligible for Medicaid since $12,000 is greater than any resource limit. 2. Ms. W, a non-MAGI applicant, has a Medicaid qualifying trust set up as the result of a malpractice suit. The trust pays only for medical care. There is $100,000 in the trust. Since the trust provides for medical care only, it is not a resource. It is a third party medical resource. Ms. W is evaluated for resources based on her other resources of $500. She is income- and resource-eligible for Medicaid, based on the non- MAGI coverage group. The worker prepares and sends a memo to TPL stating the basic trust provisions and the name and address of the trustees. 3. Mr. N, a 503 applicant, has a Medicaid qualifying trust that provides payments of $100 a month from trust income. No principal can be used. The trustee has not made the income available. The worker determines whether Mr. N would qualify for SSI by adding all income together, including the $100 a month, and disregarding his COLAs. His social security income at time of cancellation was $230. He has no other income. $230 + $100 - $20 = $310. He is eligible under the 503 group.