Ohio Medicaid changes “Aged Blind Disabled” Eligibility – “Invisible” Gross Income

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.  Today’s installment will discuss money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a 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.

To add to the confusion that the Medicaid recipient use a Miller Trust (or his/her family or guardian or long term care provider that is actually handling the income) is already suffering, people will not always realize that some money that counts as “income” does not actually arrive in the Medicaid recipient’s bank account.  Unfortunately, counting everything that constitutes gross is important in determining whether someone needs a Miller Trust at all.  It is also important in the monthly management of the Miller Trust.  Counting gross income incorrectly can make someone ineligible for Medicaid at the time of application and, later, can temporarily suspend Medicaid benefits when a mistake in QIT management is found.

The Miller Trust requirements are triggered by GROSS income over the Special Income Level ($2,199 per month at this time.)  Medicare Part B premiums ($104.90 per month for most Medicare recipients) is part of gross income.  For the vast majority of Medicare-covered people, the Part B premium is deducted from Social Security retirement payments before the monthly Social Security income arrives in the person’s account (via direct deposit.)  Because the Part B premium doesn’t actually arrive, it is easy to overlook when counting up gross income.  Some people on Medicaid for long term care in Ohio whose gross income is approximately $2,300 per month will probably fail to set up Miller Trusts because they overlook the Part B premium and don’t realize that they must comply with this requirement.  Others, even after setting up the Miller Trust, are likely to put too little money into the Miller Trust because they overlook the Part B premium that must be counted in the $2,199 that can stay out of the Miller Trust.

Tax withholding on monthly payments, most often pension payments, will cause the same problems.  Because the withheld money doesn’t arrive, it will often get overlooked in deciding whether to set up a Miller Trust and then again will get overlooked in determining how much money to put into the Miller Trust each month.

“Invisible” income will add to the difficulties that confront Ohioans who need Medicaid for long term care.

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