My dad has a monthly income of around $7,000, which far exceeds the income limit of around $2,500 / month in New Jersey. Assuming a monthly nursing home cost of $10,000, would he still be eligible for Medicaid through the Medically Needy Pathway?
While your dad would not be eligible for nursing home Medicaid via the medically needy pathway, he could still become income eligible. (In New Jersey, the medically needy 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 however 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). 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 nursing home 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, with this type of trust, income deposited into the trust is no longer counted as income for Medicaid eligibility purposes. The way a Miller Trust works is that 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. An important note is that 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. This is because 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 here.
Please note that 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. To see Medicaid requirements in New Jersey, click here. To see the criteria in the rest of the states, click here.