Paying for nursing home care is already difficult for many Georgians. Many are forced to seek Medicaid eligibility. Since July 1, 2004, Georgia has been an "income cap" State, meaning there is yet another hurdle when qualifying for Medicaid. There are several requirements to qualify for long-term care Medicaid.
The major Medicaid eligibility requirements are that the individual:
- requires nursing home level of care;
- has resources that total no more than $2000, with some being excluded; and
- has income less than the income cap.
This article addresses the last of these criteria, namely, the income cap. It is a situation where the nursing home resident has too much income to qualify for nursing home Medicaid, but not enough income to pay the cost of nursing home care. Individuals in this situation are “trapped in the gap.”
Georgia is one of 20 or so states that will (when the program changes) have a strict income limit on Medicaid eligibility for long-term care services. Until July 1, 2004 Georgia had a "medically needy" program that allowed nursing home residents to "spend down" excess income until they qualified for Medicaid (Tennessee now has an income cap as well). That program has been terminated. Now, no spend-down of income is allowed. States like Georgia have various names like “income cap’ states or “Utah Gap” states. Utah, by the way, is not an income cap state.
The present income cap in Georgia is $2022.00 a month (or 3 times the SSI rate which, in FY2009, is $674). The average monthly cost for nursing home care is somewhere between $5,000 and $7,500 a month. Obtaining nursing home care, if your income falls between “the gap”, is difficult if not impossible. Your spouse, should you have one, can suffer. They can be left with a choice of taking care of you or having no money to live on.
To illustrate, consider this example: Bill and Hillary are retired and have a modest income. Bill receives $2000 a month from Social Security and a $300 per month pension. Hillary receives $300 a month in Social Security. Their combined total income is $2600 a month. Bill recently suffered a stroke and is presently hospitalized. Complications require him to need skilled nursing home care once he leaves the hospital. The cost of nursing home care will be at least $5,000 per month. Bill’s income is too high to qualify for Medicaid and their combined income will barely pay for Bill's care, if at all. Bill cannot afford to go into a nursing home and Hillary is unable to care for him at home. Bill and Hillary are “trapped in the gap.”
Bill and Hillary are caught in a situation that is all too common. They are neither wealthy enough to pay for care nor poor enough to qualify for Medicaid. There is, however, a way for Bill to become income eligible. This can be accomplished by using an income only trust also called a Miller Trust. It does not require any advanced planning and is typically used in a crisis situation like the one in which Bill and Hillary find themselves. Once he is eligible for Medicaid, the cost of Bill's nursing home care will be covered. This will allow Hillary to benefit from the Medicaid spousal impoverishment provisions.
A Miller Trust will not help everyone in this situation. The individual can still have too much income for the trust to work. The Trust is also considered a last resort with no other options available. An elder law attorney or an attorney experienced in Medicaid can answer any questions you have and determined if this type of trust is an option.
This article is for informational purposes only. Nothing contained therein is intended to be, nor should be, taken for legal advice. Further, Georgia's "Miller Trust" Rules are still being formulated and the rules may change. (In fact, they have been changing regularly and we expect more changes between now and the date of implementation. Please contact us if you have questions, or if you are seeking the most current information).
How the Miller Trust Works in Georgia
QIT Trustee Guide - Published by Georgia Dept. Community Health
Miller Trust Questionnaire
Notice Regarding Changes in Georgia's Medically Needy Program
Article describing changes in Medically Needy Program
LegalAid-GA: Basic Facts about setting up a MIller Trust
Governor's Press Release Delaying Changes in Medically Needy Program
Tennessee became an income cap state as of April 29, 2005. The present income cap is $2,022. In October, 2005, the State released the following memorandum (with 2 attachments, one of which is a form of trust). To-date, these documents represent most of the we have from the State.
Tennessee QIT Memorandum
Attachment 1 to the Memorandum
Attachment 2 to the Memorandum
Note: OBRA 1993 codified a 1990 ruling from the United States District Court for the District of Colorado which first coined the term "Miller Trust." See Miller v. Ybarra, 746 F.Supp. 79 (E. Colo 1990).
© 2004, Law Office of David L. McGuffey, LLC
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