May 13

More Rules for Medicaid? Who is Miller? Why do I need his trust?

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Ohio has more Medicaid changes coming July 1, 2016. Many of you may have received a notice indicating such. You may be wondering what this means for you or your family. Butcher Elder Law would like to help answer any questions you may have about the changes.  This blog will provide an overview of the basics of these changes, explain why Ohio rules are changing, and describe the basics of a qualifying income trust (“QIT”) or Miller Trust.

Ohio is participating in a change from what is referred to as a 209(b) state to a 1634 state, in an effort to simplify the Medicaid eligibility determination process for Ohioans with disabilities.  Currently an applicant for Supplemental Security Income (“SSI”) needs to submit one application for SSI and a separate application for Medicaid.  This transition in our state will mean that once an individual with a disability is found eligible for SSI they will automatically be enrolled in Medicaid without the additional application. The change will simplify the process for Ohioans with disabilities seeking both SSI and Medicaid.  Unfortunately however, it will also change the criteria for determining Medicaid eligibility for all Ohioans, including those who are not seeking SSI and are applying only for Medicaid.

Section 209b of the Social Security Amendments of 1972 allowed Ohio to create stricter requirements to qualify for Medicaid than for SSI. Under the current system, Ohio set the resource (asset) limit at $1,500.00 for a single individual and the monthly income limit at $634.00. Additionally, the current system allows individuals a “spend down” to reduce their monthly income to the $634 by deducting medical expenses. The new rules that will take effect July 1, 2016 are based on Section 1634 of Title XVI of the Social Security Act.  Ohio will call this new eligibility system Ohio Benefits. Under the new system, the income limit will be raised to 75% of the Federal Poverty Level (currently $743) and the resource limit to $2000. The Section 1634 rules eliminate the spend down. Instead, the new system requires that income above the income limit be put in QIT or Miller Trust.

The trust came to be named after a Colorado case, Miller v. Ibarra, which was the first case to address a type of trust that solely holds income to maintain Medicaid eligibility. This trust, also called a QIT, is a legal agreement between the grantor and the trustee. The trust may only contain an individual’s income (pension, Social Security, and other types of income) and cannot shield other assets or contain the income of another person. It can also contain any accumulated interest income from the trust amount.  It must be irrevocable, properly executed, and name the state as a residuary beneficiary. The trust may then use the excess income of the individual to pay for incurred medical expenses, the monthly personal needs allowance, or spousal maintenance allowance, bank, trustee, or legal fees associated with the maintenance of the trust; and the patient liability. If any funds remain in the trust at death, the Ohio Department of Medicaid will be paid up to the total cost of care through a process called Medicaid Estate Recovery.

So, you may be thinking, “oh my, I need a Miller Trust?”  Well, not necessarily.  Ohio Medicaid is not changing the income eligibility criteria for individuals who need Medicaid long term care benefits. There is a special income limit for individuals with long term benefits. These are individuals who need long term care services and reside in a nursing facility or receive home and community based services through waiver programs. The income limit for these individuals for purposes of requiring a Miller trust will be $2,199.00. That means that if your monthly income exceeds $2,199.00 you will need a Miller Trust after June 30, 2016. Yes, even if your income is $1.00 over the limit you will need the trust.

Ohio Medicaid has selected Automated Health Systems to help notify individuals who may need a QIT or Miller Trust.  Automated Health Systems can be reached at 1 (844) 265-4722. Their representatives are supposed to help impacted individuals set up the required trusts before June 30, 2016.  Keep in mind that a trust is a legal document and should be drafted by an attorney.  So, an individual may reach out to Automated Health Systems for help in setting up the trust.  If, however, they want an advocate of their own for help in meeting the requirements of this rule change, rather than a vendor selected by the state to accommodate the needs of a vast number of individuals, they can come to Butcher Elder Law. We have been and will be setting up Qualifying Income Trusts as a part of our Medicaid planning and qualification practice.  We will help you answer the important questions such as… “Who should my trustee be?”, “What’s an annual accounting?” or “Which bank should I use?”  We are also able to provide trust administration services to help ease and guide any family through the Medicaid process.