Is My Income Too High to Qualify for Medicaid?
One of my roles as an advocate and a board-certified expert in elder law is to dispel Medicaid myths that continue to confuse clients and their families. In fact, it is a very rewarding experience to comfort a family that is terrified about the future and let them know that they can forget about the misguided information they previously received.
For our Florida senior population that resides in nursing homes and have difficulty affording the monthly bill, Medicaid is often an option that is much needed to assist in covering expensive nursing home costs. However, it is not unusual to have clients and their families enter my office and profess that they “make too much money” to qualify for Medicaid to help pay for such costs.
When clients and families say this—they often mean it in one of two ways. The first meaning is that the family believes the client is over the Medicaid “Asset Cap” and therefore ineligible for Medicaid. The second meaning is that the family believes the client is over the Medicaid “Income Cap.” It is this second meaning that this article will focus on.
For example, a daughter recently came in to discuss her 87-year-old father’s situation. He had a debilitating stroke three months ago that has made it impossible for him to remain at home. Thus, he is now receiving care in a local nursing home.
Between his social security and his pension, he receives $2,500 per month total in gross income. She had correctly heard that his father’s income was over the 2019 Florida Medicaid Income Cap ($2,313) and was wondering how he will be able to pay the $10,000 monthly nursing home bill if he cannot become eligible for Medicaid.
I explained that there is a way of becoming eligible for Medicaid despite her father’s income being over the Cap. The way in which he can still qualify for Medicaid is by executing and adequately funding a Qualified Income Trust (“QIT”). A QIT is also commonly referred to as a “Miller Trust” and as an “Irrevocable Income Cap Trust.”
For example, if the father executes a QIT and deposits an adequate among of income into the QIT account each month, he will meet the income requirements despite being over the $2,313 cap. Why is this so important to this family? Because by executing and administering this trust correctly, the father will pay his income from this trust to the nursing home each month and Medicaid will cover the rest of the nursing home expense. In other words, his eligibility allows him to owe the nursing home approximately $2,500 each month as opposed to being ineligible and owing $10,000 each month.
Please note that this blog only addresses the very basics of the income rules. Factors such as an applicant’s marital status, unpaid medical expenses, supplemental health insurance costs, and the source of income—are all factors that can affect how much the applicant owes the nursing home each month. If you find your family in a similar predicament as depicted above, I strongly advise you to seek guidance from a board-certified elder law attorney as soon as possible.