Qualified Income Trusts Revisited

            It has been 7 months now since New Jersey eliminated its Medically Needy Medicaid program and as a result brought back Miller trusts. I detailed the changes in my posts of October 13 and October 20, 2014. The changes actually went into effect December 1, 2014.

How have these changes been implemented? I am always skeptical of how smoothly the state will integrate any changes. New Jersey doesn’t have a good track record there and I was fearful that there would be problems. I wasn’t wrong and I will share with you some of my experiences to date.

            Before I do that, however, let’s briefly review the changes. Medicaid has a strict income cap ($2199/mo in 2015). For applicants with gross income exceeding that number, they are ineligible for Medicaid under what is called the “Medicaid Only” program. When we talk about income, we are focused generally on Social Security and pensions, those sources that are received as long as you live and only change for cost of living increases. You can’t call up Social Security and ask for less money. There was, however, a second Medicaid program that covered nursing home care for individuals over the income limit, what was called the “Medically Needy” program. That program only covered nursing home care, not assisted living or home care.

            As I said, New Jersey did away with that program effective December 1, 2014. So, what happens to people with too much income? That’s where the Qualified Income Trusts (QITs), commonly referred to as Miller trusts, play a role.

            If I have more than $2199 of income per month, in order to qualify for Medicaid I must put some of my income into this QIT to make myself eligible. What happens to this money once I transfer it to the trust? It must then be distributed in the same manner as the rest of my income under Medicaid’s post eligibility income rules.

            For example, some or all of a married Medicaid recipient’s income may be distributed to the healthy (“community”) spouse. Some or all of the income may also go to the nursing home or assisted living facility. The income that is transferred to the QIT doesn’t stay there. It is then distributed to wherever that income must go under Medicaid’s post eligibility rules.

            I have filed a number of applications so far for applicants that needed QITs and as I expected, I had different experiences in different counties. In some cases the caseworkers were uninformed of how these trust work. In other instances, they flat out misinterpreted the rule changes that could have led to a denial of benefits if we hadn’t been there to correct those mistakes.

            Next week I’ll share with you “the good, the bad and the ugly”.

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