The big day is here. The New Jersey Medicaid program has changed effective December 1st. I wrote about this change several months ago, and now the day is here. The State notified all residences on Wednesday, November 26th, that a highly anticipated change to the Medicaid program would be effective December 1st.
There are many different programs of Medicaid in New Jersey, but as an elder law attorney, I work with two of those programs. One program is called the “Medically Needy program” and the other is called the “Medicaid Only program.”
The Medicaid Only program will pay for long-term care in a nursing home, in an assisted living residence, or at home, such as a home health aide. The Medically Needy program will only pay for care in a nursing home.
The Medicaid Only program has an income cap, set at 300% of the federal benefit rate for Supplemental Security Income. In 2014, the income cap is $2,163.
What this means is, if an applicant’s income exceeds $2,163 a month, even by one penny, he will never qualify for the Medicaid Only program. From a practical standpoint, this means that if the applicant is residing at home or in an assisted living residence, he will not qualify for Medicaid benefits.
The Medically Needy program does not have an income cap; however, as stated, the Medically Needy program will only pay for care in a nursing facility. So, while the income cap is not a problem, telling someone who is residing at home or in an assisted living residence that he has to go live in a nursing home in order to qualify for Medicaid does create a problem.
Well, effective December 1st, this has all changed. New Jersey is eliminating the Medically Needy program, leaving only one program of long-term care Medicaid.
This new program will pay for long-term care in a nursing home, an assisted living residence, and at home. The program has no income cap; however, if the applicant’s income exceeds $2,163, a figure that is adjusted annually, then the income above that level must be placed in a trust.
The trust is known as a Miller Trust, after a very famous case that discussed the workings of the trust, or a Qualified Income Trust. The bottom line is, whatever you might call it, the practical effect is that a lot more people who were foreclosed from qualifying for long-term Medicaid at home or in assisted living residence because their income exceeded the Medicaid Only program’s income cap now have the option of qualifying for benefits.
A Miller Trust is somewhat tricky. For those of you who aren’t experienced elder law practitioners, the trust would probably seem very confusing and very scary. But the fact of the matter is, this change to the law and the trust open up tremendous opportunities for New Jersey’s elderly residents.
For families struggling with Medicaid income limits, a Miller trust may provide an important planning opportunity. Understanding how these trusts work—and when they can be used—can make the difference between qualifying for benefits and being denied coverage.