What is the monthly “income cap” and a “Miller Trust” in 2017 for Alabama Medicaid for long term care in a nursing home?
Continuing our series on Alabama Medicaid, let’s talk about the income cap and also what a “Miller Trust” is as this relates to the income cap.
To qualify for Alabama Medicaid, we have to satisfy the “income cap”. If we don’t, then we won’t qualify unless we can fix the problem with a “Miller Trust”.
“What is the monthly income cap for Alabama Medicaid in 2017?”
$2,205 is the monthly income cap for 2017.
Basically this means that the person going into the nursing home must make $2,205 or less to qualify.
“What if I make less than the income cap?”
Then you qualify under this requirement for Alabama Medicaid.
So you make $1,999 a month — no problem. You qualify under the income test.
“What about my spouse’s income?”
We don’t look at your spouse’s income for the “income cap” in Alabama. We completely ignore it unless your spouse makes too little (see below).
“What if I make more than the income cap?”
If you make more than $2,205, then you don’t qualify.
You can set up a “Miller Trust” to handle the excess income.
So for example, you make $2,700 a month in income. This is $495 a month too much.
If that is put into a Miller Trust (explained below) then you can qualify.
“What is a Miller Trust?”
It is also called a “Qualifying Income Trust“. All this means, as a practical matter, is your income goes into this “Trust” and Medicaid has all but $30 go to the cost of the nursing home care.
(Note there is an exception if the spouse at home — known as the community spouse — does not make enough income. We’ll discuss this in our series of articles on Medicaid).
The whole purpose is to allow you to qualify for Medicaid. Otherwise it would be absurd to qualify if you make $2,205 in income but if you made $2,206 you don’t qualify.
“How do I set up a Miller Trust?”
You can do this on your own but normally best to have an attorney set it up for you.
The basic idea is you have a bank account that only has your income going into it. Then there is a trustee whose name the account is in and your income check (all or enough to get you below the income cap) is direct deposited.
You must make sure that only approved uses of the money occur or you could lose your Medicaid eligibility. Simple answer — the money goes to pay the nursing home.
(Here is a link to Alabama Medicaid on a Miller Trust).
Here’s the practical reality of the “income cap” in Alabama — assume all of your money will go to a nursing home and Medicaid pays the rest
Alabama Medicaid lets you keep $30 as a “personal needs allowance” every month. All the rest of your income goes to the nursing home.
Unless your spouse living at home makes less than $2,003 a month then you may can divert some of your income to your spouse at home.
But besides this, Medicaid is looking to be the “last man in line” — they are the last person paying on your nursing home. So it makes sense that basically all of your income goes to the nursing home, then Medicaid steps up.
“What if I have further questions about qualifying for Alabama Medicaid for long term care?”
Give us a call at 205-879-2447 or fill out our contact form and we’ll get right back with you.
Our goal is to answer your questions so you have a good roadmap of where you are now and where you want to go and how to get there.
We look forward to chatting with you!