Don’t Get Trapped By Medicaid’s Income Rules

Miller Trusts
The way Texas treats income eligibility for Medicaid nursing home benefits is tragic.  According to the Texas Department of Human Services, the average costs for care is about $4,300 each and every month.  In the Houston area, costs can easily run over $6,000. Few people can afford to pay that kind of money so they turn to Medicaid for help with the costs.

Yet,  in Texas and 20 other states, your income could be too high to qualify for help but too low to pay the full costs of care. Even if an elderly person meets the asset and health care requirements, if the applicant’s income is over the limit, they won’t get a dime from the Medicaid program.

Doesn’t sound very fair does it?

The rest of the states will offset a person’s income with their costs of care to determine income eligibility. That makes perfect sense.  It’s simple math. They net income against the costs of care. If the result is under the income limit, you satisfy income requirements.   Not in Texas!

Medicaid income rules say you  don’t qualify if your gross income is a penny over the limit.

Single people whose income is “too high” but without sufficient assets to pay for care are then forced to rely on the generosity of family and friends. Usually the financial burden falls on the adult children. If the children are unable to pay the monthly nursing home fees they bring the parent home. Not only are their lives forever changed, the quality of care available for the patient can suffer. For a married person, the spouse suffers the terrible dilemma of depleting limited assets to pay the nursing home leaving no money left for his or her needs.

A Miller Trust solves the problem in both cases.

The trust is an irrevocable trust that allows a person with “excess income” to become income eligible by running their income through a bank account specifically set up for that purpose.  Typically, all of the patient’s income is deposited into a special checking account. The patient’s nursing home bills, medical insurance premiums and a personal needs allowance are paid from the trust bank account according to strict Medicaid rules.

Medicaid income rules are complicated. Correctly setting up the trust and its attendant bank account is critical to getting eligibility approved.  That’s why using an experienced elder law attorney like Houston Elder Care Attorney Michael L. Holland is such a good idea.