Last week I wrote about changes to New Jersey’s Medicaid program that are coming November 1, specifically with regard to the income cap. Well, as with all things Medicaid, that date is not certain. It’s now looking like December 1 is the more realistic date.
What is certain, however, is that whenever the changes do become effective, New Jersey’s Medically Needy program will be terminated. Anyone currently in the Medically Needy program will remain unaffected by the changes but if they should come off of that program and then reapply, the new rules would apply to them.
So, what are the changes exactly? Anyone with income that exceeds the $2163 per month income limit (in 2014) will be able to place their excess income into a qualified income trust, commonly known as a Miller trust, and become eligible for New Jersey’s Medicaid Only program.
For the past 20 years or so, New Jersey has had in place its Medically Needy program which covers people who have income over the cap. For that reason, Miller trusts couldn’t be used. Not a problem for nursing home residents but a definite problem for home based and assisted living residents because the Medically Needy program only covers nursing home residents. That has always left a huge gap in coverage. Soon that gap will close.
The use of Miller trusts will allow anyone applying for Medicaid in a nursing home or an assisted living facility or at home who has income above the $2163 limit to be eligible. This irrevocable trust must be created no later than the last day of the month before Medicaid eligibility. Income above the income cap must be deposited into the trust in the month it is received.
Once deposited, the income must then be paid out according to post eligibility rules. Those payments would include the cost share portion to the nursing home or assisted living facility, the $35 personal needs allowance and the Community Spouse Monthly Maintenance Needs Allowance including the excess shelter allowance. If there is still income remaining, then uncovered medical expenses and health insurance premiums may be paid subject to state approval.
The trustee of the Miller trust will be responsible for managing and making the payments from the trust. Any excess income not paid out must remain in the trust and will be subject to New Jersey’s estate recovery rules, meaning that after the Medicaid recipient’s death, the remaining funds must first be given to the State to reimburse it for any benefits paid out. In most instances, all the remaining funds will go back to the New Jersey.
Many questions remain open as the State tries to implement these changes. And, as I said, it is looking like December 1 will be the earliest effective date but stay tuned.
I plan to hold a live online Google Hangout chat on Miller trusts on a date yet to be announced. If you’d like to be included when we send out notice of it, please email me at firstname.lastname@example.org.