This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled (ABD) program coming in 2016-2017. The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.) The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system. The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care. The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month. Today’s installment will start a series of discussions of difficulties with the Miller Trust.
The first difficulty that we will have with the Miller Trust is the difficulty in helping clients understand the Miller Trust. Someone will have to sign a Miller Trust agreement. (Ohio Medicaid is calling this document a Qualified Income Trust Declaration.) The person who will sign the declaration/agreement is (I would hope) going to ask what he/she is signing and to understand why he/she is signing it. Helping someone to understand the logic of a Miller Trust may well be impossible.
Someone who “makes too much money” in income will not qualify for Medicaid’s support for long term care costs. (Since the last inflation adjustment, anyone who makes more than $2,199 per month gross has too much income to qualify for long term care Medicaid.) When nursing homes cost more than $7,000 per month, and assisted living facilities cost more than $4,000 per month, it’s hard to explain why $2,199.01 is “too much income” for Medicaid. There still a significant shortfall in the ability to pay for long term care.
Our cure for “too much income” is to move the excess income (the amount over $2,100) to the Miller Trust. Under the coming Ohio Medicaid rules, the money that goes into the trust isn’t “income” once it goes into the Miller Trust. After the money is placed into the trust, it has to go back out of the trust to pay monthly costs for which the Medicaid recipient is responsible. The flow of income out to pay the Medicaid recipients cure sounds like the way that income acts. But, money that goes into the Miller Trust isn’t “income” any longer (in the eyes of Medicaid.)
In the real world, the Miller Trust makes no sense. What looks like “income” isn’t income any longer after going into the Miller Trust. It looks like income. It acts like “income.” It arrives each month like income. Yet, somehow, it’s not “income” anymore.
A Miller Trust is sort of like watching one of the “Harry Potter” movies. We know that people can’t ride on flying brooms or cast a spell that makes an animal materialize out of smoke. Still, for purposes of enjoying the movie, we suspend our disbelief in magic. To accept a Miller Trust, we need not suspend our disbelief. Instead, we must suspend our intolerance for the nonsensical.
Someone signing a Qualified Income Trust Declaration must accept the trust with no better explanation for it than “Those are the rules,” or, using the reasoning of our wise parents, “because I said so. That’s why.”
It doesn’t matter whether the person signing the trust declaration ever comes to understand the Miller Trust or the Medicaid rules. Because Medicaid coverage worth thousands of dollars each month it at stake, the person must sign it. It doesn’t matter if the signer must hold his/her nose to block the stink of illogical nonsense, the trust declaration must get signed.
Getting someone to the point at which he/she has the necessary faith in the Medicaid system to sign the trust declaration is the first difficulty in dealing with Miller Trusts.