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A Qualified Income Trust (sometimes called a Miller Trust) is a legal instrument that meets the criteria set by the Omnibus Budget Reconciliation Act of 1993 (OBRA ’93). This act granted certain exemptions for the treatment of income and assets in determining Medicaid eligibility. There are specific requirements that must be met for the trust to qualify as an income trust; therefore, the department of children & Families legal counsel must approve the trust.
The following link is a guide designed to assist potential residents and their families through the process of selecting a nursing home:
Medicare will cover 100% of the cost of nursing home care for the first twenty days of coverage and co-pay for up to the next eighty days of coverage if you have spent three days in the hospital (not counting the day of discharge and if you are going for recovery and rehab in a long-term care facility). This is only if it is determined that you are making progress and that you are indeed benefiting from the care. Medicare does not pay long-term benefits past the first 100 days.
If you have purchased long-term care insurance at a young enough age for it to be affordable, this is certainly the best plan. However, it is often too late to purchase this type of insurance and many times the plan is not adequate to pay the bill.
Countable assets are those assets that will cause an applicant to become ineligible for Medicaid benefits. These include savings accounts, checking accounts, CDs, stock and bonds, boats, planes, etc. A non-countable asset is acceptable in the eyes of Medicaid and includes spousal pension plans, Medicaid-friendly income accounts, spousal IRAs, and exempt assets such as a personal residence, one car, household goods, burial plots and term life insurance.
The key is to take countable assets and income over the allowable limits and place them into a non-countable and special income trusts. Elder Planning Alliance has the expertise to do this properly.