Month: September 2016

Ohio Medicaid changes “Aged Blind Disabled” Eligibility – Dependent Family Member in the Home

Posted on by — No Comments ↓

This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled program coming in 2016-2017.  The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.)  The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system.  The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care.  The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month.  The June 23, 2016 installment discussed the difficulty in understanding the need for a Miller Trust.  The July 1, 2016 installment discussed the need to empty the Miller Trust account every month.  The July 7, 2016 installment discussed  the need to balance the Miller Trust with the desire to have health insurance.  The July 15, 2016 installment discussed the confusing deposit rules for Miller Trusts.  The July 21, 2016 installment discussed the changes that the Ohio Department of Medicaid made to the form Miller Trust document.  The July 28, 2016 installment discussed whether income is supposed to go directly into the Miller Trust.  The August 4, 2016 installment discussed Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic.  The August 11, 2016 installment discussed money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a Miller Trust.  The August 18, 2016 installment discussed  the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums.  The August 25, 2016 installment discussed the impact of tax withholding on certain income sources and the difficulty that the tax withholding creates for the Miller Trust.  The September 2, 2016 installment discussed the limit placed on monthly costs of the Miller Trust.  The September 9, 2016 installment discussed how Ohio’s Medicaid rules appear to count income tax refunds twice.  The September 15, 2016 installment discussed the Ohio Department of Medicaid’s change in policy regarding real estate (other than the residence.)  The September 22, 2016 installment discussed keeping the house with an intent to return to home.  Today’s installment will discuss keeping the house while a dependent family member lives there.

Before July 31, 2016, a single person who asked for Medicaid’s help to pay for long term care costs and who owned a home had 13 months after the beginning of Medicaid coverage during which to put the home up for sale.  (If the Medicaid applicant were married and the spouse still lived in the home, there was no obligation to sell.)  That 13-month time period is gone.  As part of the big August 1, 2016 change in rules, Ohio Medicaid rescinded the 13-month rule.  Now, the person must decide to keep the house or to sell the house before applying for Medicaid.

If the person decides to sell, then the rules regarding real estate discussed in the September 15, 2016 installment apply.

If the person decides not to sell, then one of a number of certain conditions must apply.  Under the new rules, if a dependent family member lives in the home, the person may keep it and still receive Medicaid coverage for long term care.

The new rule that describes whether and how to count the house as an asset of the Medicaid applicant/recipient (Ohio Administrative Code section 5160:1-3-05.13) creates a new way for someone to live in a nursing home or assisted living facility AND receive Medicaid’s help with the nursing home/assisted living costs AND to keep his/her home.  Subsection (C)(4)(a) allows the person to keep the home and excludes the value of the home from the count of the person’s assets if a spouse or dependent relative lives there.

Now, protection of the house while the spouse lives there is not new.  This is a long-standing rule in Medicaid.  (Imagine the news headlines and the political fallout if Medicaid evicted spouses from their homes.)

The dependent relative exclusion is largely new.  (A blind or disabled child living in the home made it excludable under the old rules, but that was a more limited exclusion than this new one.)

The new rule defines “relative” to include children, stepchildren, grandchildren, parents, stepparents, grandparents (Remember, some people who need long term care are not elderly.), aunts, uncles, nieces, nephews, brothers, sisters, stepbrothers, stepsisters, half brothers, half sisters, cousins, and in-laws.  Look at the list.  “Relative” includes lots of people.

The new rule states that “dependency may be of any kind” and lists as examples, “financial, medical, etc.”  Look at how wide open “dependency” is.  It can be of “any kind.”  I assume that future rulemaking and possibly litigation will provide more details, but for now, “dependency” is enormously broad.  A so-called boomerang child (one who comes back home after having previously moved out) can be described as “dependent” because it’s less expensive to live in a house where Mom and Dad don’t charge rent.

But, THERE’S A CATCH.  And, it’s not in the rule regarding the house.

If the Medicaid recipient dies while still owning the house, Medicaid estate recovery will lead to a lien being placed on the property.  Medicaid estate recovery (as discussed in previous installments) is the federally-mandated effort to recover from Medicaid-covered people who have died whatever assets can be recovered as a way to replenish (perhaps even a little bit) the Medicaid fund.  If Medicaid spent a great deal of money on the deceased homeowner’s care, the lien could easily surpass the value of the property.  (The rule is so new that no cases of Medicaid estate recovery have yet occurred under the new system.  We’ll have to wait to see if a Medicaid lien results in an eviction of the “dependent family member” from the house.)

If, in an attempt to avoid Medicaid estate recovery, the Medicaid applicant/recipient gives away the house, Medicaid will call the gift an “improper transfer” and will not pay for the person’s care for the amount of time that the value of the house would have paid.

Thus, the “dependent relative” rule on the house is a wide open opportunity to keep the house for a while.  It is not, though, a way to keep the house forever.

 

Ohio Medicaid changes “Aged Blind Disabled” Eligibility – Intent to Return Home

Posted on by — No Comments ↓

This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled program coming in 2016-2017.  The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.)  The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system.  The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care.  The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month.  The June 23, 2016 installment discussed the difficulty in understanding the need for a Miller Trust.  The July 1, 2016 installment discussed the need to empty the Miller Trust account every month.  The July 7, 2016 installment discussed  the need to balance the Miller Trust with the desire to have health insurance.  The July 15, 2016 installment discussed the confusing deposit rules for Miller Trusts.  The July 21, 2016 installment discussed the changes that the Ohio Department of Medicaid made to the form Miller Trust document.  The July 28, 2016 installment discussed whether income is supposed to go directly into the Miller Trust.  The August 4, 2016 installment discussed Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic.  The August 11, 2016 installment discussed money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a Miller Trust.  The August 18, 2016 installment discussed  the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums.  The August 25, 2016 installment discussed the impact of tax withholding on certain income sources and the difficulty that the tax withholding creates for the Miller Trust.  The September 2, 2016 installment discussed the limit placed on monthly costs of the Miller Trust.  The September 9, 2016 installment discussed how Ohio’s Medicaid rules appear to count income tax refunds twice.  The September 15, 2016 installment discussed the Ohio Department of Medicaid’s change in policy regarding real estate (other than the residence.)  Today’s installment will discuss the intent to return to home.

Before July 31, 2016, a single person who asked for Medicaid’s help to pay for long term care costs and who owned a home had 13 months after the beginning of Medicaid coverage during which to put the home up for sale.  (If the Medicaid applicant were married and the spouse still lived in the home, there was no obligation to sell.)  That 13-month time period is gone.  As part of the big August 1, 2016 change in rules, Ohio Medicaid rescinded the 13-month rule.  Now, the person must decide to keep the house or to sell the house before applying for Medicaid.

If the person decides to sell, then the rules regarding real estate discussed in the September 15, 2016 installment apply.

If the person decides not to sell, then one of a number of certain conditions must apply.  The most likely condition that Medicaid recipients will invoke is the “intent to return home.”

If the person intends to return home, he/she is not required to sell the house before getting Medicaid coverage.  The intent to return must be expressed in a written, signed statement.  This exemption of the house ends if the person establishes a “principal place of residence” anywhere else.  This new “principal place of residence” is, in my opinion, how people will be tripped up in obtaining or keeping Medicaid coverage.

If a person has been in a nursing home or assisted living community for many months (unless on rehab,) I doubt that the house can be called the “principal place of residence.”  If the person’s health isn’t likely to improve, the “principal place of residence” has probably become the nursing home or assisted living community.  Even if the “intent to return home” is real, it may not be realistic.  The “principal place of residence” allows Ohio Medicaid to avoid covering someone whose intent to return home is not realistic.

Now, during this first year or two under the new rules, I’m not sure that Medicaid will challenge an applicant’s written statement of an intent to return home.  (There are so many changes, and they are so complex, that I expect the county Medicaid offices to be overwhelmed trying to keep up with new applications and annual renewals.  For example, the computer changes that the new rules necessitated have not gone well.  Some county Medicaid offices have been unable to process applications for weeks.)  At the person’s annual renewal, however, if he/she is still in the nursing home or assisted living community, the Medicaid office can decide that the house is no longer the “principal place of residence.”  (By the time of the first annual renewal, the person will have been out of the house for at least a year, after all.)  Medicaid coverage can be suspended until the house is sold and the proceeds spent.

Even if the Medicaid office allows the person to keep the house (i.e., Medicaid accepts the person’s statement of intent to return home even if it’s not likely that the person can ever return,) the person will not have money to keep up the house.  Medicaid rules allow the person to keep only $2,000 in savings and $50 of monthly income.  The person can’t keep up with property taxes, insurance, and maintenance on the house with that low amount of money.

In addition, if the person keeps the house until he/she dies, Medicaid will place a lien on the house for the amount of money that Medicaid spent on the person’s care.  (A lien on real estate is one of the methods of “estate recovery” after a Medicaid recipient dies.)

For a single person who needs Medicaid’s help to pay for long term care who owns a home, I suggest that the person decide what will happen with the house before applying for Medicaid rather than kicking the can down the road.  The statement of “intent to return” might be a way to delay making a decision, but the inability to pay to keep up the house will put the person in a financial bind quickly and also might cause the house to lose value.  In addition, the risk of Medicaid estate recovery always looms over the house.  For these reasons, I suggest dealing with the house (or at least deciding what to do with the house) sooner rather than later.

Letting go of the house is terribly emotional.  Still, I think it’s better to deal with it sooner rather than later.

Ohio Medicaid changes “Aged Blind Disabled” Eligibility – Real Estate blocks Eligibility

Posted on by — No Comments ↓

This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled program coming in 2016-2017.  The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.)  The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system.  The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care.  The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month.  The June 23, 2016 installment discussed the difficulty in understanding the need for a Miller Trust.  The July 1, 2016 installment discussed the need to empty the Miller Trust account every month.  The July 7, 2016 installment discussed  the need to balance the Miller Trust with the desire to have health insurance.  The July 15, 2016 installment discussed the confusing deposit rules for Miller Trusts.  The July 21, 2016 installment discussed the changes that the Ohio Department of Medicaid made to the form Miller Trust document.  The July 28, 2016 installment discussed whether income is supposed to go directly into the Miller Trust.  The August 4, 2016 installment discussed Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic.  The August 11, 2016 installment discussed money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a Miller Trust.  The August 18, 2016 installment discussed  the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums.  The August 25, 2016 installment discussed the impact of tax withholding on certain income sources and the difficulty that the tax withholding creates for the Miller Trust.  The September 2, 2016 installment discussed the limit placed on monthly costs of the Miller Trust.  The September 9, 2016 installment discussed how Ohio’s Medicaid rules appear to count income tax refunds twice.  Today’s installment will discuss the Ohio Department of Medicaid’s change in policy regarding real estate (other than the residence.)

Very few real properties are worth less than $1,500 (the resource limit for Medicaid eligibility under the old rules.)  So, ownership of real property would prevent eligibility for Medicaid for long term care.  Under the rules in place before August 1, 2016, the value of the real property did not count toward financial eligibility for Medicaid as long as the real property was up for sale.

According to Ohio Administrative Code section 5160:1-3-05.15, real property was exempt from the resource calculation for a Medicaid recipient/applicant if the property was up for sale through a broker or agent.  (Sale by owner was not sufficient.)  The broker or agent had to list the real property on the multi-listing service (the MLS.)  And, the asking price could not exceed the value listed in the county appraisal records.  If these conditions were met, the property was not counted against the Medicaid recipient/applicant.

As soon as the property sold, the Medicaid recipient/applicant would have to spend down the proceeds to resume Medicaid coverage.  If the property didn’t sell before the person passed away, the state could place a lien on the property through the Medicaid Estate Recovery process as a way to partially replenish the Medicaid coffers.  (This exemption of real property during the period it was listed for sale was very important during the 2008-2009 real estate market meltdown.)

Under the new rules that took effect on August 1, 2016, Medicaid has gotten out of the real estate business.  Ohio Administrative Code section 5160:1-3-05.15 has been rescinded.  There is no longer an exemption for real estate even if it is up for sale. (Note:  The residence is different and will be discussed in the future.)  The ownership of real estate will prevent an applicant from receiving Medicaid coverage for long term care unless the total value of all owned properties is less than $2,000 (the new limit on resources for a Medicaid recipient.)  In other words, the real property has to fit into the low limit placed on all resources of a Medicaid recipient.

Now, sale of the real property is not enough to qualify for Medicaid for long term care.  Sale of the property turns an illiquid asset (real property) into liquid assets (cash.)  The cash proceeds are not likely to be less than $2,000, so the former owner of the real estate would be Medicaid ineligible because of the cash resources he/she has received.  The person who needs long term care can do much more with cash than with real estate to move toward Medicaid eligibility.  The cash can be used for medical/care expenses, or it can be used to buy some items that the Medicaid applicant would like.  Of course, if the proceeds are great enough, some can be given to the person’s children and some used to pay off the Medicaid penalty that results from giving away assets.

Then, when the person’s assets are below $2,000 (and, if necessary, arrangements have been made for a penalty period, the person becomes eligible for Medicaid for long term care.

Because the new rules effectively prevent Medicaid eligibility for a real estate owner, I’m advising clients to sell properties quickly.  Because of the speed with which a deal can be completed, I’m starting to move to auctions rather than traditional listings for real property.  (I do apologize to my friends in the traditional real estate brokering business, but my clients’ needs must come first.)

Ohio Medicaid changes “Aged Blind Disabled” Eligibility – Tax Refunds may be counted Twice

Posted on by — No Comments ↓

This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled program coming in 2016-2017.  The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.)  The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system.  The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care.  The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month.  The June 23, 2016 installment discussed the difficulty in understanding the need for a Miller Trust.  The July 1, 2016 installment discussed the need to empty the Miller Trust account every month.  The July 7, 2016 installment discussed  the need to balance the Miller Trust with the desire to have health insurance.  The July 15, 2016 installment discussed the confusing deposit rules for Miller Trusts.  The July 21, 2016 installment discussed the changes that the Ohio Department of Medicaid made to the form Miller Trust document.  The July 28, 2016 installment discussed whether income is supposed to go directly into the Miller Trust.  The August 4, 2016 installment discussed Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic.  The August 11, 2016 installment discussed money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a Miller Trust.  The August 18, 2016 installment discussed  the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums.  The August 25, 2016 installment discussed the impact of tax withholding on certain income sources and the difficulty that the tax withholding creates for the Miller Trust.  The September 2, 2016 installment discussed the limit placed on monthly costs of the Miller Trust.  Today’s installment will discuss how Ohio’s Medicaid rules appear to count income tax refunds twice.

In determining eligibility for any of Ohio’s Medicaid programs, a Medicaid caseworker must see if the applicant’s income fits within the Medicaid program’s income requirements as set forth in the Ohio Administrative Code (OAC.).  In the general rules of Medicaid eligibility, “‘Income’ means any benefit in cash or in-kind, received by an individual during a calendar month.”  (OAC 5160:1-1-01(B)(31) entitled “Medicaid: definitions”)  So, income is anything that the person receives that month.  That’s the general understanding of “income,” the arrival of money that wasn’t here before.

Then, the rules for processing of applications shows that Medicaid looks at GROSS income.  The rules explain that “the amount of gross monthly non-exempt income must be established first. (OAC 5160:1-2-01.9(C) entitled “Medicaid: income, exemptions, and disregards”)  This provision means that Medicaid looks at all income, even if that income doesn’t arrive, such as Medicare Part B premiums and money withheld for taxes.  (This is the same sort of income described as “invisible” in the August 11, 2016 installment.)

The rules go on to state that income tax refunds are exempted from income (OAC 5160:1-2-01.9(D)(3) in the same “Medicaid: income, exemptions, and disregards” section discussed in the previous paragraph.)  The rules for Ohio’s Medicaid for people who are Aged, Blind, or Disabled agrees, stating that “any amount refunded on income taxes already paid” is not income (OAC 5160:1-3-03.1(J)(8) entitled Medicaid: income)  An exemption for income tax refunds make sense.  Tax withholding was included in “income” because “gross income” is where Medicaid starts its analysis.  An income tax refund is simply a return of money previously withheld that is above the amount of the tax liability.

BUT, what counts as “income” changes in the calculation of patient liability for someone in the Aged, Blind, or Disabled program who needs long term care.  “Patient liability” is the amount of money that the person receiving long term care must pay each month as his/her share of costs.  (Medicaid makes up the difference between the patient liability and the monthly payment for care to which the care provider is entitled.)

To receive Medicaid coverage for long term care services, the person must first be eligible for Medicaid.  The examination of income for that eligibility determination does not, though, carry through to the calculation of patient liability.

To calculate patient liability for long term care services, the administrative agency must “total all income, earned and unearned, of the individual, without applying any exemptions or disregards” (OAC 5160:1-3-04.3(C)(2) entitled Medicaid: determining patient liability)  Remember:  Income tax refunds were “exempt” from income in the eligibility determination.

Because the patient liability calculation must total ALL income, it is looking at gross income, and gross income includes tax withholding.  However, because the calculation does not apply any exemptions, the patient liability calculation also includes tax refunds.  That’s a problem.

Money withheld for taxes and money returned as a tax refund are the same money.  A tax refund is the money that didn’t arrive last year actually arriving this year.  The tax withholding amount was counted in “gross income” even when it didn’t actually arrive in the first place.  That same money should not be counted when it it actually arrives as a tax refund.  It’s the same money.

The inclusion of tax refunds in patient liability calculations (assuming it doesn’t get corrected in the near future) means that the person won’t have all of the money that the Medicaid caseworker calculates as the amount that the person is supposed to pay as patient liability.  Someone (perhaps the Medicaid recipient, perhaps the spouse, or perhaps the care provider) is going to receive less money than the amount to which he/she is entitled.

This double-counting of the tax refund may have been a mistake in drafting the Medicaid rule, or it may have been intentional as a way to shave a few bucks off of the state’s Medicaid costs.  Either way, this needs to be fixed.

Ohio Medicaid changes “Aged Blind Disabled” Eligibility – Limit on monthly Miller Trust fees

Posted on by — No Comments ↓

This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled (ABD) program coming in 2016-2017.  The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.)  The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system.  The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care.  The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month.  The June 23, 2016 installment discussed the difficulty in understanding the need for a Miller Trust.  The July 1, 2016 installment discussed the need to empty the Miller Trust account every month.  The July 7, 2016 installment discussed  the need to balance the Miller Trust with the desire to have health insurance.  The July 15, 2016 installment discussed the confusing deposit rules for Miller Trusts.  The July 21, 2016 installment discussed the changes that the Ohio Department of Medicaid made to the form Miller Trust document.  The July 28, 2016 installment discussed whether income is supposed to go directly into the Miller Trust.  The August 4, 2016 installment discussed Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic.  The August 11, 2016 installment discussed money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a Miller Trust.  The August 18, 2016 installment discussed  the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums.  The August 25, 2016 installment discussed the impact of tax withholding on certain income sources and the difficulty that the tax withholding creates for the Miller Trust.  Today’s installment will discuss the limit placed on monthly costs of the Miller Trust.

The Ohio Department of Medicaid rule on Miller Trusts (aka Qualified Income Trusts or QITs) took effect on August 1, 2016.  A copy of the final rule is available here.  The latest version of the form Miller Trust from the Ohio Department of Medicaid can be found here.

Ohio’s county offices that oversee Medicaid are going to be able to implement this rule (and the other rule changes that occurred at the same time) very slowly.  While the pace at which the counties get up to speed may seem frustrating, it is very hard to overstate the enormity of the changes that Ohio’s Department of Medicaid is trying to make.  Not only are there the rule changes for people who need long term care that I have been discussing (and will continue to discuss) in my blog and newsletter.  There are bigger changes (affecting tens of thousands more people) in the eligibility rules for Medicaid for people who are disabled but do not need long term care.  In addition, to oversee the new requirements for all affected people, the state and county Medicaid offices have to move to a new software system to manage the Medicaid program.

As discussed previously, someone in Ohio who needs Medicaid support to pay for long term care whose gross monthly income exceeds the Special Income Level ($2,199.00 at this time) must use a QIT to make the income over the Special Income Level not “income” anymore in the eyes of Medicaid.  (Yes, the process is as hard to follow in real life as it is to follow in that sentence.)  In order to get the benefits of the QIT, the amount of income over the $2,199 (or more than just that excess income) must be placed into the QIT each month so that the remaining “countable” income is $2,199 or less each month.  (I know, it’s not getting any more understandable.)  Please realize that there is no real-world logic in this requirement.  These are just the rules.  There are many requirements in the rules that could have been made easier or more logical, but, still, the underlying requirement to put money into a Miller Trust and spend it out of the Miller Trust all in the same month is not logical.

Miller Trusts accounts will probably not be free accounts.  Banks and credit unions sometimes offer free accounts if certain conditions are met.  Often, free accounts are available to a customer who keeps a certain minimum balance in an account or combination of accounts.  Because a person on Medicaid for long term care cannot have assets above $2,000, no one on Medicaid will be able to meet the minimum balance requirements.  Similarly, if a customer has a direct deposit into an account, there will be no fee.  As discussed in the July 15, 2016 installment, it does not appear that the Miller Trust account can accept direct deposits.  As a result, banks and credit unions will usually charge a monthly fee for Miller Trust accounts.

The new Miller Trust rule has provided for such fees.  Section E(4) of the rule (bottom of page 2 on the linked pdf) allows the Miller Trust (aka QIT, short for Qualified Income Trust) to pay up to $15 each month for “bank fees, attorney fees, and other expenses required to establish and administer the trust.”  A separate policy statement (MEPL 117) from the Ohio Department of Medicaid explains that the fee will be deducted from the Medicaid recipient’s patient liability (i.e., the amount that the person must pay toward his/her care costs each month.)  So, the Medicaid fund will, in the end, absorb the fees of the Miller Trusts.

Section E(4) of the Miller Trust rule also provides that, if $15 is “insufficient to cover the cost to administer the [Miller] trust,” the Medicaid recipient (sometimes the person would be an applicant at this point) can request that the Ohio Department of Medicaid allow a higher fee.  However, MEPL 117 states that a request for such a fee increase that is denied cannot be appealed (there are no hearing rights.)  MEPL 117 goes on to explain that, if higher fees are not allowed, the Medicaid recipient/applicant can move the Miller Trust account to a different bank or credit union.  This lack of hearing rights (aka appeal rights) isn’t fair, but the amount of money at stake is not likely to justify the time and expense of a hearing.  (Man, I feel really uncomfortable agreeing that a lack of fairness makes sense.)

In practice, $15 might be an appropriate amount to cover bank and credit union fees.  I’ve heard the fees of a number of different banks and credit unions, and the fees generally fall between $9 and $14.  So, $15 should be enough to cover “bank fees,” as the rule calls them.

That bank and credit union fees will leave $1 to $6 per month for the other allowable costs, “attorney fees, and other expenses required to establish and administer the trust.”  During the first few months of using the Miller Trust account, that amount will probably not be sufficient.

First, most people who need a Miller Trust will probably need paper checks.  Most people who need a Miller Trust will be older than 80 years old.  The Miller Trust trustee will probably be an adult child with an age in the high 50s or the 60s.  The Medicaid recipients and many (perhaps a large majority) of the adult children will probably not be people who use online banking.  As a result, most Miller Trust accounts will need paper checks.  The cost of paper checks is usually more than $15 and, depending on the delivery date, the cost of checks is likely to fall in the same month as the first account fee.  In such months, the $15 dollar allowance is not enough.  Check fees fall under “other expenses required to establish and administer the trust.”  Unfortunately, the form that the Ohio Department of Medicaid has created for the Miller Trusts does not look at any fee that isn’t a monthly bank fee (to use the language from the rule.)

Second, while the Miller Trust trustee (and, if a separate person, whomever is managing the Medicaid recipient’s income before some of it gets to the Miller Trust account) have difficulty understanding his/her obligations, legal fees for an elder law attorney may be necessary to help make sure the requirements are met.  The $1 to $6 dollars available isn’t going to be enough.  The trustee (and anyone else managing the Medicaid recipient’s money) are likely to forego help from an elder law attorney and, as a result, fail to comply with the Miller Trust rule.  When a non-compliance occurs, the Medicaid recipient is not eligible for Medicaid money for the month of the non-compliance.  His/her nursing home or assisted living facility won’t get its Medicaid payment for a month.