• Proposed Changes to Ohio Medicaid Eligibility Will Require Wider Use of Miller Trusts
  • June 2, 2016 | Author: Thomas R. Kendall
  • Law Firm: Weltman, Weinberg & Reis Co., L.P.A. - Cincinnati Office
  • Income requirements for Medicaid eligibility could be changing thanks to rule amendments proposed by the Ohio Department of Medicaid (ODM).

    According to ODM’s proposal, Ohio will convert from a “209(b)” state to a “Section 1634” state starting July 1, 2016.1 This means that, when determining Medicaid eligibility, Ohio will implement an income cap equal to three times the Supplemental Security Income Federal Benefit Rate.2

    This change will significantly impact Ohio nursing care providers serving Medicaid patients.

    The initial income cap will be $2,199 per month3 and spend downs will no longer be permitted.4 However, under draft rules, Qualified Income Trusts (QIT), also known as Miller Trusts, can be used to bring a resident’s income below the cap.5 After July 1, every resident with an income exceeding $2,199 per month will need to establish a QIT to become or remain eligible for Medicaid benefits.

    What is a Qualified Income Trust (QIT)?

    A QIT is a form of irrevocable trust into which some or all of a resident’s assets are transferred for a short time each month before being expended for the resident’s care.6 Assets in the trust are not counted toward income when calculating individual Medicaid eligibility. However, they and any interest they earn are counted in post-eligibility calculations, including patient liability. When the resident dies, all assets remaining in the trust are distributed to the state, up to the amount of Medicaid benefits provided and consistent with Medicaid Estate Recovery policies.

    To establish a QIT, residents must:
    • Have a trust instrument drafted and executed according to specific requirements
    • Open a separate bank account for the trust
    • Transfer income into the account
    • Make withdrawals and payments from the account each month
    Income may not be directly deposited into the trust account, so residents must maintain a separate personal checking account.

    The upcoming change could substantially increase the need for QITs among nursing home residents. As such, ODM has contracted Automated Health Systems to establish a support hotline and assist Medicaid applicants in setting up QITs.7 More details about Automated Health Systems services likely will become available as July 1 approaches.

    What About Residents Who Have a Power of Attorney?

    Power of Attorney (POA) instruments may or may not authorize the establishment of irrevocable trusts, such as a QIT An amendment may be necessary.

    Undoubtedly, there will be affected residents who are no longer competent to establish and maintain a QIT themselves, execute a POA or amend an existing POA. In these instances, it may be necessary to file a petition for guardianship in order to establish the QIT and maintain Medicaid eligibility.

    Weltman, Weinberg & Reis will provide more information as July 1 approaches, amended rules are finalized and details become available about support from Automated Health Systems.

    1 Public notices are published at: http://medicaid.ohio.gov/RESOURCES/PublicNotices.aspx
    2 Proposed new OAC 5160:1-3-03.5(B)(4), published at http://www.registerofohio.state.oh.us/pdfs/5160/1/3/5160$1-3-03$5-OF-N-RU-20160415-1444.pdf
    3 The SSI Federal Benefit Rate and cost-of-living adjustment provisions are found at 20 CFR § 416.405 and § 416.410. The latest rate is published at: https://www.ssa.gov/oact/cola/SSI.html
    4 Proposed amendments to OAC 5160:1-3-04.1, published at http://www.registerofohio.state.oh.us/pdfs/5160/1/3/5160$1-3-04$1-OF-A-RU-20160415-1343.pdf
    5 OAC 5160:1-6-03.2; OAC 5160:1-3-05.2.
    6 OAC 5160:1-3-05.2; ORC 5163.21.
    7 Bid # ODMR16171010 and ODMR16171007