Nursing Home Medicaid and the Miller Trust

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Medicaid is the federally-mandated health care program that Georgia provides to aged, blind or disabled individuals who live in nursing homes and have low income and limited assets. Unlike Medicare, Medicaid is a means-tested program. In other words, Medicaid will pay for nursing home expenses only for Georgians who meet the needs-based tests on income and resources. This brochure explains one of Medicaid’s income rules.

What is the Medicaid Income Cap?If an individual needs nursing home care and applies for Medicaid, the first eligibility test involves income. Georgia is an “income cap” state. This rule means that if an individual has income in excess of $2,199 per month (2015 limit) she is ineligible for nursing home Medicaid. This presents a financial dilemma for many people, because nursing home care costs far more than $2,199 per month. In fact, the average cost of care in nursing homes in Georgia is around $5,931 per month for a semi-private room! Fortunately, Georgia Medicaid offers a solution known as the Miller Trust.

What is a Miller Trust?A Miller Trust is an Irrevocable Qualified Income Trust. The Miller Trust specifically allows people who cannot afford nursing home care, but who have a monthly income that exceeds the Medicaid income cap, to be eligible for Medicaid coverage. The trustee is typically a family member, and the Medicaid applicant is the Trust beneficiary. The Miller Trust serves no purpose other than being a tool for Medicaid qualification. We call it the extra “hoop” that has to be jumped through.

What are the requirements of a Miller Trust?As an irrevocable Trust, it cannot be changed or cancelled. The Trust must also have the following features:

• The Trust must be set up in Georgia no earlier than the first month that anapplicant seeks to qualify for Medicaid.

• The only deposits into the Trust must be the applicant’s income (such as socialsecurity, pension, annuity payments and interest income).

• To receive deposits and make payments, the Trust must have its own checkingaccount (with no fees).

• The Trust cannot hold any assets, such as a house or other investments.• Any funds remaining in the Trust at the beneficiary’s death, under the terms of

the Trust, must be used to reimburse Georgia Medicaid for benefits received bythe beneficiary.

How does the Miller Trust Account receive income?The applicant receives income each month as usual into her regular checking account. At a minimum, the Medicaid applicant’s income in excess of the income cap ($2,199 in 2015) must be transferred into the Miller Trust account each month by check or automatic transfer. Some trustees elect to deposit all of the Medicaid applicant’s income into the Trust account each month. Once funds are transferred into the Trust account, they are spent in the four ways described below.

How can money in the Miller Trust account be spent?Only four types of payments may be made from the Trust:

• The Medicaid applicant’s personal needs allowance of $50 per month.• The spousal diversion amount payable to an applicant’s spouse who does not

live in the nursing home.• Medical expenses incurred by the applicant that are not paid by a third party,

such as Medicare or other health insurance premium(s).• Any remaining funds each month are paid to the nursing home as the “patient

liability,” the applicant’s contribution toward the cost of care after Medicaid’spayment to the nursing home.

Once the above monthly payments are made from the Trust, the balance in the account should be zero ($0) until the following month when the applicant’s income is again deposited into the trust.

Who can establish a Miller Trust?• The Medicaid applicant• An agent named by the Medicaid applicant’s financial power of attorney (if the

power of attorney includes the authority to create irrevocable trusts)• The Medicaid applicant’s Conservator via court order.

Although the Miller Trust is an extra procedure required by Georgia Medicaid for applicants with income greater than the income cap, the monthly accounting can become routine. It is important that trustees properly manage the deposits of income into the Trust and payments made from the Trust.

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