Medicaid eligibility for long term care often comes with strict income limits. For some individuals, their income may exceed these limits, making them ineligible for Medicaid assistance.
However, this doesn't mean they can afford their long term care expenses out of pocket.
Qualified Income Trusts, commonly known as Miller Trusts, provide a solution for individuals who have income that exceeds Medicaid limits but still need assistance covering their long term care costs.
It's called a "trust" because the excess income is placed into the trust account, managed by a trustee, and used to pay for the individual's medical expenses not covered by Medicaid.
Let's take the case of a person who has a monthly income of $3,000 from various pensions and Social Security.
If the Medicaid income limit in their state is $2,300, they wouldn't normally qualify for Medicaid due to their high income.
However, by redirecting $700 of their monthly income into a QIT, they could reduce their countable income to the Medicaid limit and thus become eligible for Medicaid benefits.