A second-grader at Portland’s Bridlemile Elementary, Archer Hinckley loves hiking and music and banging on the drums.
But the boy has Down Syndrome, which impedes his fine-motor skills, and his father, Jonas, is unsure whether Archer will ever be able to drive or work a full-time job.
He’ll have to rely on Medicaid benefits available to people with disabilities, but to do so, he’ll have to rely on the anti-poverty program’s strict limit on assets, even as his parents live much more comfortably and could support some of his future needs if they saved. “It would keep him in poverty just to retain necessary benefits,” said Jonas Hinckley, a videographer.
But a new program is opening up that will allow the Hinckley family and others who have a family member with disabilities to save money without running afoul of Medicaid rules.
The state treasury’s office is launching the Oregon Able Savings Plan accounts, specifically designed to allow families to save and invest money for their loved one, with money able to be drawn out in the future to assist with the costs of daily living.
“My hope is as he gets older, that he’ll be able to live as independently as possible,” said Hinckley, with his own apartment rather than someplace he lives because he lacks options, such as a group home or with his parents.
The Oregon Able Savings Plan accounts go live Dec. 6, and up to $14,000 a year can be deposited, up to a total limit of $310,000, although after $100,000, the asset would count against Supplemental Security Income benefits. Account holders have the option of four different investments -- conservative, moderate and aggressive, or a simple savings account drawing nominal interest. They can also blend their money between an investment account and the savings account.
Individuals can add money to their accounts as well that they might earn from part-time work to help them save for a big-ticket item such as a car that costs more than $2,000 -- the limit Medicaid recipients can have in normal banking accounts.
Dave Bell, the outreach director for the program, said that his office had planned to launch next year, but hurried up the launch date to allow families to bank money this calendar year by Dec. 31, as well as in 2017. “There’s some families who are really antsy and want to get money into these accounts as soon as possible,” Bell said.
Most eligible recipients don’t know about the accounts yet -- until oregonablesavings.com goes live next month, the Treasury Department has been soliciting advice and spreading the word primarily through disability advocacy groups. The Legislature gave them a $600,000 loan to set up the account and do initial marketing, after which they must become self-sufficient.
The Oregon Able Act was made possible by a 2014 federal law. Both bills were bipartisan, but it took years for advocates to get Congress to reverse long-held caps on assets for Medicaid beneficiaries. In Oregon, Sen. Sara Gelser, D-Corvallis, and Rep. Cedric Hayden, R-Cottage Grove, jumped on the first opportunity to pass Senate Bill 777 and facilitate the program through the state treasury office.
Since the federal law’s passage, Ohio, Florida and a handful of other states have already set up their accounts. Bell said California and Washington were likely to follow next year. Like Ohio’s system, Oregon will open these accounts both to residents and nonresidents.
The plans will work a lot like Oregon’s 529 college savings plans, and the investment returns will not be subject to federal capital gains taxes. Oregon also offers a tax deduction for income generated from these accounts for beneficiaries up to age 21.
Withdrawals from the accounts will have to be justified to the IRS, but the federal tax regulators set wide sideboards for account holders to use their savings, from housing and transportation and computers, education and supplemental healthcare, if not lottery tickets and cigarettes.
If they wanted, Bell said the money could even be used for a trip to Disneyland -- “Well, would that help the individual with a disability live a fuller life?”
Chris can be reached at [email protected].
Correction: The go-live date for the program is Dec. 6 and the amount that can be put into the account is $310,000.
