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      Medicaid Information

    Title XIX of the Social Security Act is a pgrogram which provides medical assistance for certain individuals and families with low incomes and resources.

    The program, known as Medicaid, became law in 1965 as a jointly funded cooperative venture between the Federal and State governments to assist States in the provision of adequate medical care to eligible needy persons.

    Medicaid is the largest program providing medical and health-related services to America's poorest people. Within broad national guidelines which the Federal government provides, each of the States:

    1. establishes its own eligibility standards;
    2. determines the type, amount, duration, and scope of services;
    3. sets the rate of payment for services; and
    4. administers its own program.

    Thus, the Medicaid program varies considerably from State to State, as well as within each State over time.

    • Medicaid Eligibility Information
    • Medicaid Services Information
    • Link to more information about Medicaid

    Qualified Income Trust - Miller Trust (Texas)

    Qualified Income Trust - Miller Trust
    (Income Requirements by State)

    Miller Trusts (now called Qualified Income Trusts) in very simple terms, allow people who earn too much money to qualify for Medicaid.

    Many people hear about Qualified Income Trusts and think they need one. But after learning more about the Medicaid eligibility rules, they quickly discover they are far too "wealthy" to qualify for Medicaid even with a Qualified Income Trust.  

    Here's the reason: To qualify for Medicaid in Texas, you must have both limited resources and limited income.

    Resources Test: If you have more than $2,000 worth of assets (excluding certain exempt property, but including cash, stocks, bonds, retirement accounts, nonhomestead real estate and other investments), you are too wealthy to qualify for Medicaid. Creating a Qualified Income Trust won't help you pass the resources test.

    Importantly, though, many assets are excluded in calculating your available resources. For instance, the $2,000 figure generally does not include a homestead (no matter how much it is worth), $2,000 of personal property, a burial plot, a small amount of life insurance and a car worth no more than $4,500, unless it is used for medical transportation, in which case it can be worth more.

    If you want to qualify for Medicaid and you own more than the $2,000 resource limit, you can give away assets or convert them into properties that are not counted as part of the $2,000. But be careful. When you make gifts, there is a 36-month look-back rule (60 months when gifts are made to a trust) to keep you from giving away your property and then applying for Medicaid the next day.

    Also, to complicate matters, there are spousal impoverishment rules that generally allow the spouse of someone trying to qualify for Medicaid to retain about $87,000 worth of property. A spouse's property is not counted when determining the total value of assets for the $2,000 resources test. With proper planning, though, more than $87,000 can be protected.

    Income Test: Assuming you pass the resources test, you must also earn less than $1,593 per month to qualify for Medicaid. But the problem for many people is that their pension and Social Security checks add up to more than $1,593, thereby making them too wealthy to qualify for Medicaid but too poor to pay for nursing home care (which on average costs $2,908 per month in Texas). And that is where Qualified Income Trusts come in handy, because they operate to limit the amount of money you are treated as earning so that you can qualify for Medicaid benefits.

    What you do is assign your income to the Qualified Income Trust, which then limits how much of the income can be distributed. This way, a person who makes more than $1,593 each month will be treated as earning less than that amount, thereby satisfying the Medicaid income test. The trust can allow for certain payments, including insurance premium payments, other payments to support the person's spouse, and $60 for the beneficiary's personal needs. Money remaining in the trust after those payments must be paid to the nursing home for the beneficiary's care, with Medicaid picking up the balance.

    If you are married, the rule in Texas is that you are treated as earning only the income which is payable directly to you.

    This so-called "name-on-the-check" rule completely ignores Texas community property laws, but it's the rule. Therefore, if a husband is receiving a pension and Social Security, and his wife is receiving only Social Security, when he tries to qualify for Medicaid, both his pension check and his Social Security check will be counted in determining if he earns too much money. This is the rule despite the fact that he would be considered as earning only half of their total income under Texas law.

    If you want to learn more about Qualified Income Trusts, one of the easiest ways is to search the Internet for the words "Texas qualified income trust." You will instantly be presented with a list of Web sites which discuss the subject.

    You can also call the Texas Department of Human Services at 888-834-7406 . The agency has a summary of Qualified Income Trusts, and it publishes a Medicaid Eligibility Handbook, which may prove helpful.

    Note: Most of the dollar figures in this answer change at least once each year, and they may have already changed from the time of this printing.

    Additional Websites for Information

    Long-term Care Medicaid Eligibility in Texas - The Texas Department of Human Services determines financial eligibility for all Title XIX Medicaid services provided to aged or disabled people residing in Texas. To learn more, please visit their website.

    Nursing Home Compare - The primary purpose of this tool is to provide detailed information about the performance of every Medicare and Medicaid certified nursing home in the country. To locate nursing home information in Texas search under "Select a Geographic Area" located on this page.

    Spousal Impoverishment by HCFA - The expense of nursing home care -- which ranges from $2,000 to $3,000 a month or more -- can rapidly deplete the lifetime savings of elderly couples. In 1988, Congress enacted provisions to prevent what has come to be called spousal impoverishment.

Sites of Interest

Disability and Aging Issues