What to do if Your Income is Too High for Medicaid?

Ben is retired. He receives a pension and social security totaling $4,000 a month and uses this money to pay for all his expenses, including rent, food, transportation, etc. Other than his home, Ben has less than $1500 in savings.

In the past six months, Ben has had two falls; the second one caused him to go to the hospital. As such, Ben’s doctor recommended that he no longer live alone. Ben’s son, James, finds an assisted living facility nearby so Ben can still see his friends and James can take care of his father’s needs. Unfortunately, the facility is expensive, costing over $6,000 a month. If Ben does not receive some assistance, he will run out of money.

James wants to apply for Medicaid benefits for his father. However, he has heard from one of his friends that Medicaid will only accept you if your income is less than $2523 a month (which is the 2022 income cap limit) – even if all your other income is going towards paying the facility bill but the income is still insufficient to cover the total cost of care. What can James do to help his father get on Medicaid?

James can and should contact an elder law attorney for help because a qualified attorney can set up a Qualified Income Trust or a QIT. Sometimes, this is referred to as a Miller Trust.

A QIT is a special Trust that can help Medicaid applicants whose income exceeds the threshold amount to become financially eligible for Medicaid. The Trust can accept the excess income, but the Trustee will need to use all the money coming in to pay the facility. A qualified attorney can ensure that the trust is drafted correctly so that it not only gets accepted by Medicaid but also, the attorney can guide the Trustee on how to properly administer the trust after it receives the income each month so that the applicant becomes eligible for Medicaid and maintains their eligibility after being approved.

If you have further questions or need assistance with a QIT, don’t hesitate to get in touch with us today.