Medicaid is the Federal program administered by the states which provides health care for those who cannot afford it, based primarily on a standard of impoverishment.
Federal law establishes certain mandatory requirements which each state must adopt in its local Medicaid program.
To qualify for Medicaid, an applicant must meet the asset guidelines for Supplemental Security Income (SSI).
[3] Congress recognized that disabled persons were a special class of individuals who benefited from the use of MQTs and thus permitted the establishment of supplemental needs trusts.
The same basic rules apply as to the spendthrift irrevocable nature of the SNT formed by a third party, as well as the age 65 limitation, and the requirement for an EIN.
Thus, a first-party SNT may have limited utility when its secondary goal is to pass assets of the disabled individual to family members or other remaindermen.
The difference between the actual and countable income amounts is referred to as the "gap" from which this type of trust takes one of its several names.
The QIT is most often used when nursing home (SNF) or adult living facility (HRF/ALF) costs, are sought from Medicaid.
The Miller trust can be named as recipient of the individual's income from a pension plan, Social Security, or other source, effectively impoverishing them for this purpose.
Income that is routed into a Miller Trust each month, as received, is no longer counted for Medicaid eligibility.
Upon the death of the beneficiary, the state Medicaid agency must be paid back for its medical assistance from any remaining assets in the Miller trust.
The Miller trust is significant only in those states (about half) which impose an income cap on Medicaid long-term care eligibility.
In some states, a disabled individual over age 65 is entitled to transfer assets to a pooled trust and then be immediately eligible for Medicaid.
Upon the death of the disabled individual, the balance is either retained in the trust for the nonprofit association or paid back to the State Medicaid agency for its medical assistance.
However, revocation may interfere with the receipt of governmental benefits, or may (with first-party SNTs) trigger a Medicaid repayment, so a trustee needs to use extreme caution in making this decision.
Also, if the SNT is revoked for reasons other than good cause, the disabled beneficiary who relies on it may have legal recourse against the settlor for loss of governmental benefits and damages.