Ohio Medicaid changes “Aged Blind Disabled” Eligibility – Miller Trusts for “Too Much 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.  Today’s installment will discuss 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.

Creating a Miller Trust will probably be easy.  There’s a form agreement.  (The form may change from the current draft, but Ohio Medicaid is unlikely to get away from having a form.)  A trust agreement is important to any trust.  The agreement describes how the trust will work and outlines the duties of the trustee and the benefits to the beneficiaries.  A trust agreement is sort of like the U.S. Constitution.  (A trust agreement certainly isn’t nearly as grand as the Constitution, but the trust agreement serves, more or less, the same purpose.)  The Constitution isn’t our nation, but it describes how our nation is supposed to work.  Similarly, a Miller Trust agreement (or any trust agreement, for that matter) isn’t actually the trust itself, but the agreement describes how the trust is supposed to work.

For people who already have Medicaid coverage for long term care whose income is above the $2,199 limit, Ohio Medicaid has contracted with Automated Health Systems to offer help preparing the Miller Trust agreement.  Letters with this offer are already going out to affected Medicaid recipients.  Ohio Medicaid has estimated that almost 9,000 people already receiving Medicaid will need Miller Trusts.

New applicants for long term care Medicaid who have income above the $2,199 limit may have to make their own arrangements for preparation of a Miller Trust agreement.  That preparation should be relatively easy, though.  After all, there’s probably going to be a form agreement.

Note:  The $2,199 income limit may be adjusted from time to time because of inflation.

As mentioned above, the trust agreement isn’t actually the trust.  The actual Miller Trust is going to be an account in a bank.  Considering the monthly activity in the Miller Trust account (scheduled for discussion in the next installment,) it almost certainly should be a simple checking account.  Many states already have Miller Trust requirements for people who have “too much income.”  Accordingly, any bank in Ohio that has a presence in other states will probably already be familiar with the Miller Trust type of account.  The people who work in the Ohio branches of these banks, and some banks and credit unions that do not have branches in other states, may not be familiar with the Miller Trust.  (For example, the manager of the branch where I do most of my banking had to check whether he could have a Miller Trust account.  He had never seen one before.)  Because of the income limits for Ohio Medicaid’s coverage of Assisted Living, there already are a small number of Miller Trusts in Ohio, so there already is some small level of familiarity with this type of account among bank personnel in Ohio.

The trustee is the person who must set up the actual Miller Trust account.  The trustee will have the power to set up the account through the Trust Agreement.  Then, after the account is set up, the trustee will do all of the work with the Miller Trust.  The trustee will have to accept deposits into and manage payouts from the Miller Trust.  (The next installment will discuss income and payouts in more detail.)

The nursing homes and assisted living communities where the people who need Miller Trusts live may be able to act as the trustees for their respective residents’ Miller Trusts.  I have seen news from the Ohio Health Care Association (a trade association of nursing homes, assisted living facilities, and related providers) stating that Ohio Medicaid will allow the business offices of the various care communities to take on the job of trustee for the Miller Trusts for their affected residents.  In addition, to avoid multiple bank fees, the care communities may be able to have one “pooled” Miller Trust account for all affected residents and have a sub-account inside that pooled account for each individual affected resident.  (This “pooled account” concept is very similar to how many care communities already handle the personal needs account (the account where money is kept for routine needs/wishes such as hair care in the salon or candy bars from the snack shop) for most or all of their residents.)

Once the Miller Trust account is set up, money must be moved into and out of the account in a very precise way (if Ohio Medicaid adopts the April 15, 2016 proposed version of the rule for Miller Trusts.)  I plan to discuss the requirements of this rule (as proposed,) we well as its pitfalls, in upcoming installments.

Now, as mentioned in a previous installment, don’t look too hard for logic in all of this.  Medicaid is a government-run program, and eligibility for Medicaid is the gate that controls who receives government benefits and who does not.  As with many government programs, logic is not the driving force.  A Miller Trust is sort of like a washing machine for income.  (To be sure, a Miller Trust doesn’t launder money like a drug dealer launders money.)  A Miller Trust washes the stain of being “income” off of money so that a person who needs long term care no longer has too much “income” to qualify for Medicaid.  It’s not logical, but it works.  The only explanation I can offer is “them’s the rules.”

I can’t help wondering if the “Miller” in Miller Trust comes from the Miller Brewing Company.  Whoever thought this up must have been drinking at the time.

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