NJ Medicaid issues Guidance on new Qualified Income Trusts

I previously posted about the upcoming changes to the New Jersey Medicaid programs that pay for nursing home care and home and community-based services (HCBS) for people whose gross monthly income exceeds $2,163. This amount was formerly called the “income cap,” and people in that group could only receive Medicaid benefits in nursing homes. That was under the “Medically Needy” program. Going forward, the Medically Needy Program is being replaced for new applicants. Under MLTSS, the State will now require that the income be transferred into a Qualified Income Trust (QIT) which used to be colloquially referred to as a “Miller Trust.” The State has published some guidelines about the process on the DMAHS website.

Here at FRE-L, we are developing a process to help our clients set up and administer a QIT so that they can have it in place by the time the person’s assets have been reduced to the necessary level for Medicaid eligibility. https://www.ershow-levenberg.com/medicaid_nj.html   We  are ready to help you with every step of this process. We will provide detailed instructions and assistance to you.

If you are planning to file a Medicaid application for someone whose gross monthly income exceeds $2,163, you have to handle the income in a particular way so that it is funneled through the Trust every month before it is then disbursed for the expenditures that are allowed under the Medicaid program. Eligibility will be at risk if this isn’t done correctly. As of now, this structure will be required for all applications beginning 11-1-2014. It will likely take at least a month for you to get it all in place. First, the Trust must be prepared. Next, the bank account for the trust must be set up. Next, the arrangements to get the income into the trust each month must be implemented. Finally, you will establish the routine for the monthly disbursements from the trust.

Once the structure is in place, the trustee will be issuing several payments each month out of the trust: (1) Personal Needs Allowance for the applicant (currently $35 PNA); (2) support for the community spouse, if authorized, to fund their MMMNA or Minimum Monthly Maintenance Needs Allowance (MMMNA) in an amount that is calculated per the regulations or court order; (3) incurred medical expenses and (4) cost share for medical assistance.

Call us for legal advice and assistance with Medicaid applications and NJ Qualified Income Trusts  … 732-382-6070

Medicaid and VA Pension Comparisons, Part II

My last post discussed some of the differences between Medicaid and the Veterans Improved Pension programs with respect to the treatment of assets, trusts and transfers.

The treatment of income is also different among these programs. Here is a chart that will give you these comparisons at a glance.

2014 VA Pension and Medicaid income resource chart

Income eligibility for Veterans Improved Pension depends on having sufficient unreimbursed medical expenses (UME’s) that can be used to offset the amount of monthly income and bring it down to the Maximum Annual Pension Rate (MAPR). Expenses must exceed 5% of the income including any payments made to a family caregiver. On the other hand,  Medicaid has two major types of long-term care programs, and income is treated differently than for the VA program. http://www.benefits.va.gov/pension/

One Medicaid long-term care program is for individuals who are Categorically Needy – their gross monthly income is below $2,163/month, which is a number that changes each year because it equals 3x the federal poverty rate (this is referred to as “the income cap”). If they live at home and receive services under the Medicaid Long-term Care Services and Supports (MLTSS, formerly called GO or Global Options) they do not have to spend down any of that income specifically on medical expenses in order to qualify. If they are in a nursing home (under Institutional Medicaid) or assisted living facility (ALF) under the MLTSS (formerly GO), they basically turn over all of the income to the facility except for limited specific deductions.

The other Medicaid long-term care program is for individuals whose income exceeds the $2,163 income cap. Presently, they can only receive Medicaid benefits in a nursing home, under the Medically Needy program in which unreimbursed medical expenses are paid out of the excess income and then, after certain specific deductions,  Medicaid picks up the cost of the nursing home. A replacement program for these applicants is slated to be active as of November 1st, 2014 — but it’s still being developed so this date may move. Under the new plan, the applicant’s excess income will have to be paid over to a Miller Trust and then disbursed in the month of receipt for the health care expenses including facility costs. Read more about that in my earlier posts on Miller Trusts, sometimes called Qualified Income Trusts. http://blog.finkrosnerershow-levenberg.com/wp-admin/post.php?post=1329&action=edit

Be careful when it comes to paying family caregivers! The rules are drastically different under VA Pension and Medicaid. More on that in an upcoming post.

For legal advice and assistance with Medicaid applications and Veterans Benefits, call 732-382-6070

NJ proposes to eliminate its Medically Needy Medicaid Program

Friday’s post talked about the new state program being developed for delivery of home and community-based Medicaid services (MLTSS), which will require individuals whose income exceeds the income cap to set up a Miller Trust to receive and handle the excess income. The State has actually published a Notice of Proposal, announcing its intent to ask the federal government to allow it to do away with the Medically Needy Medicaid Program for residents in nursing homes whose income exceeds the “income cap” ($2,163/month in 2014), and replace it with the MLTSS which will require the use of a Miller Trust.

The Miller Trust is also called a Qualified Income Trust. Friday’s post discussed the need for new applicants for home-based or assisted living Medicaid services to first establish their Miller Trust before filing the application. The State is now forewarning that people who reside in nursing homes may need to engage counsel to prepare a Miller trust for them in order for their benefits to continue.

The exact implementation date for the proposal is not known at this time. Further, it is possible that existing Medically Needy Medicaid recipients will be “grandfathered” so that new trusts are not necessary. As of now, there are many questions left to be answered.  However, you should begin thinking about who you’ll want as trustees to handle the responsibilities of managing the income, the trust and the benefits once the program is implemented if you have income in excess of the cap.  The trustee may be your Power of Attorney or if necessary, your Guardian, or any other sensible, reliable, trustworthy individual who helps you out.

Our firm prepares specialized trusts for clients with disabilities and on Medicaid, and we are ready to prepare Miller Trusts that are appropriate for your situation.

Contact us regarding Medicaid eligibility, applications, appeals and trusts … 732- 382-6070 http://www.finkrosner.com/contact.html