Ohio Medicaid changes “Aged Blind Disabled” Eligibility – Automatic Transfers into Miller Trust

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.  Today’s installment will discuss Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic.

The Ohio Department of Medicaid has finalized its new rule on Miller Trusts (aka Qualified Income Trusts or QITs.)  A copy of the final rule is available here.  The new version of the form Miller Trust from the Ohio Department of Medicaid can be found here.

Because the rule calls them QITs and today’s installment makes a number of references to the new rule, I’ll usually call them QITs.

The Ohio Department of Medicaid had originally announced that the new rules would take effect on July 1, 2016.  As that date approached, and the enormity of the changeover became more apparent, the effective date was delayed until August 1, 2016.

While the delay 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.)

Last week’s installment described the lack of clarity in Ohio Medicaid’s new rule whether money is supposed to get deposited into the QIT account directly from the income source or it is supposed to be transferred into the QIT account from another account belonging to the Medicaid recipient.  This lack of clarity is compounded by indications in the new rule that the Ohio Medicaid wants the deposits/transfers to go into the QIT account automatically.

Section H of the QIT rule tries to describe the requirement(s) to have money transferred into the QIT automatically.  If money that needs to go into the QIT can’t go into it automatically, the manual transfers into the QIT must be documented.  I hope that the monthly QIT statements that must be provided to the Medicaid caseworker with each annual Medicaid renewal will provide adequate documentation that the manual transfers into the QIT actually took place.

In addition, the reason(s) why the transfers can’t be automatic must be documented.  Unfortunately, there is no explanation what documentation will suffice.  Perhaps a letter stating that the bank or credit union can’t transfer money automatically will suffice.  With luck, only a few people will have trouble arranging automatic transfers into the QIT.  (People who disagree with what I wrote last week about “deposits” versus “transfers” into the QIT should arrange automatic “deposits” into the QIT directly from one or more of the Medicaid-recipient’s income sources.)

But wait.  There’s more (as the TV infomercials say.)

The second sentence of Section H states, “Every effort should be made to have the individual’s EXCESS income deposited directly into the QIT on a monthly basis.”  (emphasis added.)  It is possible to read that sentence as requiring that the amount of the person’s income above the Special Income Limit (currently $2,199) must go into the QIT and any additional income that goes into the QIT (i.e., any deposit/transfer into the QIT that leaves less that $2,199 outside the QIT) must go into the QIT manually.

I do not believe the better, more logical, (or certainly more practical) reading of the second sentence of Section H requires a part automatic/part manual placement of money into the QIT (for people who will have less than $2,199 outside the QIT.)  BUT, some Medicaid caseworkers somewhere in Ohio will eventually read it that way.  Some representative of some Medicaid recipient will eventually have this discussion with the county Medicaid office.  I fear that this little, stupid sentence is going to require a revision of the rule, the issuance of a policy letter (known as an Action Transmittal,) or a hearing.  I hope that none of my clients becomes the guinea pig for this issue.

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