Jewish Seniors: Don’t Get Lost in the Medicaid Maze
New Jersey Medicaid updates to help Jewish baby boomers achieve and retain Medicaid eligibility.
To those who’ve been in the field of Medicaid planning and consulting for many years and have witnessed countless changes in the system, the institution of new laws comes as no surprise. Come November, there are a number of important changes being made to the Global Options Medicaid program, otherwise known as ‘assisted living Medicaid’.
Currently, anyone applying for Global Options Medicaid for assisted living coverage in NJ will need to be below the income cap of $2,163. This is only true for assisted living and those living in the community, whereas for nursing home care (Institutional Medicaid), there is no income cap. This change will come in as early as November.
The state of New Jersey will soon allow an individual to set up what’s called a ‘Qualified Income Trust’ (QIT), also known as a ‘Miller Trust’, in which he can deposit monthly income in excess of the aforementioned $2,163. The good news is that many more NJ residents can gain Medicaid eligibility, if the trust is set up properly.
In order to have this set up properly, there are several requirements;
1. The QIT must be irrevocable. This will be treated no differently than a disability, funeral or burial plot fund which needs to be an irrevocable trust fund.
2. The QIT can contain only income and not resources. Examples of income are, social security and pension checks, as well as rental income. Resources include, profit from the sale of real estate, personal property, cash, stocks, bonds or funds from savings accounts.
3. Only the income of the nursing home resident can be deposited into this QIT and not the income of the community spouse.
4. Whatever income is being deposited must be deposited in its entirety. For example, one cannot deposit half of a social security check, however one CAN deposit only the SSI check and not the pension, or vice versa.
5. As set forth by federal and state law, there will need to be an account trustee to manage the account.
6. Income that is deposited into the QIT may only be used in the same way as Post-eligibility Treatment of Income under the Medicaid spousal impoverishment provisions enacted by congress in 1988. These include, paying for care, Personal Monthly Allowance (PNA) of $35 per month for the nursing home resident, a secondary insurance premium and any income that is to go towards the MMNA (Monthly Maintenance Needs Allowance) of $1,966.25 for the community spouse.
7. The state will be the first beneficiary of all remaining funds in the QIT after the death of the nursing home resident.
The bad news is that the Medical Assistance Program (Nursing Home Medicaid) will undergo some changes as well, and the resource cap for Medicaid eligibility will be lowered for the Med-needy program. Instead of the existing cap of $4,000 for an individual and $6,000 for a couple, under the new changes it will be lowered to $2,000 for an individual and $3,000 for a couple. The income cap and all other ‘excludable assets’, for example, home and vehicle, will remain the same for the time being.
The new laws governing eligibility for Medicaid bring the good news that many more NJ citizens will be eligible for Medicaid after setting up a QIT properly, and the bad news that the resource cap will be lowered for the Med-needy program. At the end of the day, though, what matters for Medicaid eligibility is to be in the know and stay informed.