Navigating Housing Options for Individuals with Intellectual and Developmental Disabilities
Decoding the Complexities of Financing, Planning, and Support for Future Housing Needs
Housing for individuals with intellectual and/or developmental disabilities is a critical need across the country. I can almost hear you correcting me, saying “Eric, housing is a critical need for everyone.” You’re not wrong. And I am writing this article with that in mind. My points can be applied to anyone, not just those with disabilities.
As I see it, from 30,000 feet there are (3) options.
3rd Party, like a Medicaid Waiver provider, paying for your housing.
Your family or loved ones paying for your housing.
You are paying for your housing.
I’d like you to try to figure out which of the three options you feel best fits your current situation before you start getting into the weeds with the “how”. If you “know” you will never put your child in a Residential environment, it doesn’t make sense to ask providers about their group homes when interviewing them. Similarly, if you “know” your child could never make it in your house after you’re gone, it would make sense to include selling it to fund your child’s Special Needs Trust in your financial plan.
This is a loooooong post. It had to be, because I wanted to go in-depth, especially when discussing how to calculate what you would need for option 2. I’ve included my math so you can replace my numbers with yours. Planning for the future like this can be stressful, that’s why many of us don’t do it. But it doesn’t have to feel like a mystery, with everything happening in a black box. Let’s dive in.
3rd Party Payor:
In the world of Intellectual and Developmental Disabilities (IDD), Medicaid Waivers are the 3rd Party Payor of choice. Waiver programs play a pivotal role in providing housing solutions for individuals with developmental disabilities. When you accept a Medicaid Waiver, you are “waiving” your right to be housed in an institution. The universal criteria are it must be less expensive for the state to provide your services in your home than in an institution. From there every state is allowed to set its eligibility requirements.
Group homes have historically been the most common residential option under Waiver programs. Per U.S. Code, “the term ‘group home’ means a single-family residential structure designed or adapted for occupancy by not more than 8 persons with disabilities, which provides a separate bedroom for each tenant of the residence.” To the best of my knowledge, very few States are still packing people in like this. I believe most are using 3 or 4-bedroom houses.
It’s becoming more common to have agencies renting one or two-bedroom apartments for those they support. This is what I’m looking into for my son. I won’t be on the hook to pay his rent, his agency will. It’s important to note that Medicaid will NOT reimburse agencies for money paid towards rent, mortgages, or upkeep. Medicaid will only pay for the staffing required and approved in the plan to keep the individual safe. It’s up to each agency to cover all other expenses, so many rely on their fundraising efforts.
When someone is receiving Residential support in the form of an apartment or group home the agency responsible may require the individual to pay them a portion of their Social Security benefits to cover “room and board”. For example, Colorado allows residential providers to charge up to $779/mth (2024). They cannot take every penny. Even with four people in a house, when factoring in routine maintenance and CapEx projects like a roof it’s unlikely to cover all the agency’s expenses.
This means parents may want to leave their children money to cover their “lifestyle” and enroll their children in their state’s Supplemental Nutrition Assistance Program (SNAP). If you’re looking for a ballpark of how much money money to leave your child, I would say between $500 - $1,500 per month. If this number seems too low please use whatever you feel is more appropriate.
Here’s an example. Let’s say you’re in your mid-40s and you are working with your Financial Advisor and Special Needs attorney to get everything set up. You’ve decided you’ll use life insurance to fund the Special Needs Trust because your child doesn’t need the money right now. You feel they will have a good life if they get $600/mth from you after their food and shelter costs are covered. You want to plan for 50 years after you’re gone. This means you would want to get a policy for ~ $400k. I always round up to the next $50k.
Here’s my math. $600 x 12 months = $7,200/year. $7,200 x 50 years = $360,000.
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