medicaidplanner Staff asked 4 years ago
My dad has a monthly income of around $7,000, which far exceeds the income limit in New Jersey. Assuming a monthly nursing home cost of $11,000, would he still be eligible for Medicaid through the Medically Needy Pathway?
medicaidplanner Staff answered 4 years ago
Your dad would not be eligible for Nursing Home Medicaid via the Medically Needy Pathway. In New Jersey, this pathway, called the Special Medicaid Program, Medically Needy Segment, is not an option to lower one’s countable monthly income for this type of Medicaid long-term care. It is a viable option for persons aged 65 and over, but for those who are applying for the state’s Regular Medicaid program, which is often referred to as Aged, Blind and Disabled Medicaid.
Your dad could, however, still become income-eligible for Medicaid-funded nursing home care. In NJ, Nursing Home Medicaid applicants (as well as Home and Community Based Medicaid Waiver applicants) can lower their countable monthly income and still qualify for long-term care Medicaid by establishing Qualified Income Trusts (QITs).
With a QIT, also called a Miller Trust, a Medicaid applicant sets up the trust, to which their “excess” monthly income (income greater than Medicaid’s income limit) is deposited. Essentially, income deposited into this type of trust no longer counts as income for Medicaid eligibility purposes. A trustee, often the applicant’s adult child, is named to manage the account, and the use of funds is very restricted. Often payments from the trust are limited to paying the Nursing Home Medicaid beneficiary’s Personal Needs Allowance, a Monthly Maintenance Needs Allowance for a non-applicant spouse (if applicable), and contributing towards the cost of long-term care. In order for the trust to be Medicaid-compliant, it must be irrevocable, meaning the terms of the contract cannot be cancelled or altered.
When considering a QIT as a means to lower one’s countable income for eligibility purposes, it is recommended that one seek assistance from a Professional Medicaid Planner. If the trust is not correctly set up, it won’t serve its intended purpose; to lower an applicant’s countable monthly income. Find a Medicaid Expert in your area.
In addition to your dad meeting Medicaid’s income limit, he must also meet the asset limit and functional need criteria in order to be eligible for Nursing Home Medicaid. See Medicaid requirements in New Jersey. See criteria in the rest of the states.