As of December 1, New Jersey has begun allowing Miller trusts / Qualified Income Trusts (QIT’s) to be used to establish Medicaid eligibility.

With a Miller trust, income that would put Medicaid applicants over the long term care income limit (which in 2015 is $2,199) is deposited into a special bank account, where it is paid out in accordance with Medicaid rules.  Applicants accept restrictions on how the money can be used, and Medicaid does not count the trust money towards the applicant’s income limit, allowing the applicant to qualify for Medicaid.

Miller trusts are only used for long term care, in a nursing home, assisted living facility or with home care aides in the community.  Miller trusts cannot be used to qualify for non-long-term-care Medicaid.

The implementation of Miller trusts means that New Jersey is ending its Medically Needy program for long term care.  People who currently receive assistance under Medically Needy are “grandfathered” and will continue receiving assistance, but may have to establish a Miller trust if their circumstances change.  It’s not clear whether people with pending Medicaid applications, who qualified for Medically Needy when they applied, will have to establish a Miller trust to qualify.  My view on the matter: better safe than sorry.

The main advantage of Miller trusts / QIT’s is that they allow people with higher incomes to receive long term care outside of a nursing home.  Previously, folks with income above the limit could only qualify for Medically Needy assistance in a nursing home.  People who could have received care in an assisted living facility or at home with aides, couldn’t, because their incomes were too high to qualify for ordinary Medicaid (but too low to pay the exorbitant cost of long term care).  Now, these people can put their excess income in a Miller trust and receive care in the most appropriate setting.

New Jersey Medicaid officials seem to expect that initially, the use of Miller trusts will cost the state money.  Reportedly the state has set aside $90 million to cover the cost of new Medicaid enrollees who qualify for the first time using Miller trusts.  However, many people who work in this area, including me, believe that ultimately this program will save the state money.  It costs much more to provide care in a nursing home than in other settings, so allowing people to receive care in less restrictive environments makes economic sense for the state.

If you’re interested in using a Miller trust to qualify for Medicaid, we would be happy to speak with you.  Call or email us today.