I recently was contacted by a potential client asking me to set up a Miller Trust for them. I have to admit that I did not know what they were talking about but discovered that was for good reason since California does not allow Miller Trusts otherwise known as Qualified Income Trusts or QIT. A short explanation of a Miller Trust/QIT is that it allows a Medicaid applicant to put their excess income into the trust when their income is over the Medicaid’s limit to become income eligible for Medicaid long-term care.
California’s version of Medicaid is called Medi-Cal. There is no asset or income limit to qualify for Medi-Cal long term care benefits. However, all but $35 and any out-of-pocket medical premiums of a skilled nursing facility occupant’s income must go towards their monthly resident cost (formerly known as share of cost) and then Medi-Cal will pay the difference between the income amount and the cost for the facility. Nearly all income is counted as income except for VA Aid and Attendance Pension and Holocaust restitution payments.
If the applicant is married, the income of the non-applicant spouse does not go towards the monthly resident cost. Also, if the non-applicant spouse’s income is less than $3,854 per month in 2024, then income of the applicant spouse can be transferred so the non-applicant spouse’s income reaches $3,854 per month. If the non-applicant spouse’s income is more than $3,854, they get to keep it, but all of the applicant spouse’s income goes towards their share of costs.
The average private pay rate in California effective January 1, 2024 is $12,608 per month. If an applicant’s income is more than $12,608, then it may not make sense to apply for Medi-Cal long term care benefits since the income would cover the cost and there would be no contribution from Medi-Cal. But, if the income is less than $12,608, Medi-Cal can help pay the difference.
Excellent information about Medi-Cal for long term care can be found here at the California Advocates for Nursing Home Reform – https://canhr.org/overview-of-medi-cal-for-long-term-care/.