Getting Medicaid and then Keeping it (Part 2)

            In my post last week, I started to tell you about the dangers of losing Medicaid benefits after qualifying for them.  That’s because you cannot put things on “autopilot”.  One reason is that getting a Medicaid approval only lasts for one year.  The State requires recipients to go through an annual redetermination process.

            While these renewals – or redeterminations – are much less intensive than the original application process, they are an importunity for the State to “take another look”.  In recent months I have seen two cases in which clients we obtained Medicaid benefits for lost some of those benefits.  In each case the problem stemmed from the use of a Qualified Income Trust (QIT), also commonly referred to as a Miller Trust.

            QITs are necessary when an applicant’s gross monthly income exceeds Medicaid’s strict income cap  ($2313 in 2019).  If you are over the income limit then you cannot qualify for Medicaid. That income, typically resulting from Social Security and pension, cannot be reduced  and you cannot call up the Social Security Administration or the pension custodian and tell it to reduce your monthly benefit.  The only way to achieve Medicaid eligibility is to set up and use a QIT, through which some of your income needs to pass.

            The rules imposed by New Jersey Medicaid on the use of QITs are very technical and strict.  Failure to adhere to these rules can result in a loss of benefits. That is exactly what happened in those two instances.  During the redetermination process, the caseworker determined that the QIT was not being used properly and imposed a penalty, a period of ineligibility.  In one case the penalty was 10 days in the other 14 days.  This means that the recipient would lose Medicaid benefits for that period of time and would need to pay the facility at its private pay rate.  Of course, the Medicaid recipient has no more funds so it is the family that incurs the cost.

            Each month a certain amount of income must be deposited into the QIT bank account.  Before the end of the month that income must be distributed out of the account to the nursing facility.  In other words, if the balance at the beginning of the month is $100, then income must go in and out of the account so that the balance remains at $100 at the end of that month.  In each case, the last monthly statement just before the redetermination date showed the monthly income still sitting in the account.  The account balance was more than $100.

            In the first instance I was able to convince the caseworker to remove the penalty. In the second case no such luck.  Next week I’ll tell you the reason for the difference in outcomes.