Qualified Income Trust

A Qualified Income Trust (or it's sometimes called a "Miller Trust") is an odd-ball document. These trusts apply to people who want Medicaid services but have too much income to participate in the benefits.

Medicaid has an income cap (as of 2018 it's $2,250) to participate. If someone makes more than that amount in Social Security, pension, and other income sources, Medicaid rules make her ineligible.

But it can be fixed. That's where the Qualified Income Trust comes in. The Medicaid rules allow income exceeding $2,250 to be transferred to the trust. Once in the trust, the trustee is obligated to use that money for the person's care. As long as that's the case, Medicaid can provide benefits when all the other eligibility measures have been met.

What happens if you don't have a Qualified Income Trust?

If your income is above the limit, Medicaid will deny benefits. This can be a problem with big consequences. Medicaid often has a back log of applications—sometimes taking a few months to process your application. If you're denied for failing to have a QIT, you risk losing months of benefits and then you have apply and start the process all over again. This can be particularly difficult when a nursing home is waiting to be paid—now it can't be paid for all the time that it took you to fix the problem.

This seems silly, why are we doing this?

It does seem silly, especially when Patient Liability already makes you pay the nursing home. But this is a function of policy that was implemented to help younger people on disability get Medicaid benefits—there are more of them in the system than folks on Medicaid for long-term care. The rules changed in 2016 and its intent is to make anyone who's eligible for SSI also qualify for Medicaid for health care. And unfortunately, Social Security has this rule. So by tying the systems together, this rule gets brought into the Medicaid rules. In essence, the affect on elderly and disabled people who need long-term care were part of collateral damage for this policy implementation.

I still don't get it, why are we doing this?

It's confusing, but the government wants a guarantee that a person's excess income will be used for care. So the rule makers came up with this—it's basically money laundering. It goes in as disqualifying income and comes out being spent on care. As long as this takes place within the trust context, the person can qualify for benefits.