By Joseph E. Balmer   |   June 25th, 2016

ALERT: Significant Changes in Ohio’s Medicaid Income Rules Have Arrived! Qualified Income Trust Needed For Higher Income Families To Be Eligible

medicaid qualified income trust ohioFor those receiving long-term care services, Ohio’s Medicaid program has always had a monthly income limit.  In 2016, that limit is $2,199 per month.  However, until now, Ohio was a spenddown state, which meant that as long as the individual spent down each month on monthly expenses below the income threshold, the individual would be eligible to receive Medicaid services.  Effective July 1, 2016, no one will be able to spend down to meet the monthly income threshold, but will need to deposit any excess income into a Qualified Income Trust (QIT) to become eligible for Medicaid coverage.

A QIT will divert some of the applicant’s monthly income into an irrevocable trust managed by a trustee (usually a family member).  The trust can only be funded with the individual’s pension, social security or other income.  No other resources may be added to the trust.  The income must first be paid to the individual and then transferred into the trust.  The money in the trust can only be used for incurred medical expenses, monthly personal or maintenance needs allowance, bank fees associated with the trust and patient liability, if applicable.  The State of Ohio must be named as the beneficiary of the trust up to the total amount of Medicaid payments made on the individual’s behalf.

The State of Ohio argues that this new system will help high income individuals qualify for Medicaid programs.  However, this was not a problem in the past as long as monthly expenses were enough to get the applicant below the income threshold.  With the new system, an irrevocable  trust will have to be set up, a tax ID number must be obtained from the IRS, a trust bank account will need to be established and separate tax returns will be required for the trust.  The Ohio Department of Medicaid has hired Automated Health Systems (AHS) to help individuals set up a QIT and answer questions.  Those not using AHS are encouraged to seek legal assistance to set up a QIT.  If not done before July 1, it would need to be done prior to the next Medicaid redetermination date in order to maintain coverage.

However good the intention may be, it appears to this author that the new system being implemented does not simplify the application process and adds an additional burden on the person who ultimately agrees to be the trustee of the irrevocable trust established to manage the excess monthly income.

Contact Us For Questions On Ohio Medicaid Qualified Income Trust

If you have questions Medicaid or need legal help to properly set up a Qualified Income Trust (QIT), please contact Holzfaster, Cecil, McKnight & Mues, LPA at (937) 293-2141 to schedule an appointment.

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Joseph E. BalmerAbout The Author: Joseph E. Balmer
Joseph Balmer manages the Probate, Trust and Estate Administration department at Dayton, Ohio, law firm, Holzfaster, Cecil, McKnight & Mues, and has been certified by the Ohio State Bar Association as a specialist in Estate Planning, Trust and Probate Law since 2006.

Medicaid: Qualified Income Trust Needed For Eligibility
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