Miller Trusts - "Qualifying Income Trusts"

What is a Miller Trust?

There are many kinds of trusts and they are used for many different purposes. A “Medicaid Qualifying Income Trust” is a type of trust that allows a person to become eligible for Medicaid even if his or her income is over the qualifying limit.  This type of trust is commonly known as a “Miller Trust.”  It gets this name from a court case about using this type of trust to obtain Medicaid.  

The information below is not intended to provide you with a “do it yourself” trust document. A Miller Trust is a very difficult and complex document that has to be written so that it follows all the rules and regulations of Medicaid, both federal and state. Unless you are an expert in this area, you wouldn’t be able to write a Miller Trust that would be accepted. That’s why you can’t find  “do it yourself” forms for this on the internet. 

However, the information will give some important background information about the trust to help you better understand what it is, how it works, and whether a Miller trust is right for you.

What is Medicaid?

Medicaid is a government program that pays the medical expenses for low income people who fall below certain income and asset limits.  There are many different Medicaid programs and each has different rules about qualifying.  In addition to the financial limits, some Medicaid programs also require a person to meet certain medical conditions.   Also, if you stumbled upon this page after a Google search, keep in mind that each state designs its own Medicaid program. The information here is only for Alaska, and only talks about the financial aspect of Medicaid, since that’s what a Miller Trust is all about.

Medicaid is different from Medicare

The Medicaid and Medicare programs are very different. Medicare benefits are similar to health insurance benefits that are earned during your lifetime of work. A small percentage of your wages are taken out of every paycheck and matched by your employer. If you have worked long enough, you’ll qualify for Medicare when you reach the age of 65 or if you become disabled before then.

There are no financial limits for those receiving Medicare, so a Miller Trust is never needed to qualify for Medicare benefits. But, Medicare does not pay for some things that Medicaid will cover, so sometimes people need Medicare and Medicaid.  To receive Medicaid, you always need to meet the Medicaid income guidelines, even if you have Medicare. 

Medicaid Financial Limits

There are two parts to meeting the financial limits for Medicaid, income and resources.

To qualify for Medicaid, a person or household’s income must fall below a certain amount, based on federal poverty guidelines. The income limit for Medicaid depends on a person’s marital status, living situation, and the specific Medicaid program for which he or she is applying.  Because there are so many different Medicaid programs, and the income limits usually change every year, we couldn’t possibly tell you what the limit is for your situation. You can find a prescreening tool for Alaska Medicaid eligibility here:  https://aries.alaska.gov/screener/?logIn=N, but the best way to find out if you’re eligible is to apply.

There is also a limit on the amount of resources a person can own.  Resources are assets that are available to the individual, such as money in the bank, or things that can easily be sold for money.

A Miller Trust can only be used in situations where a person’s regular income is over the Medicaid limit, it can’t help a person qualify if the person just has too many resources. You cannot put excess resources into a Miller Trust – it is only for regular income.  If you have resources above the limit, you still may be able to qualify for Medicaid by setting up a Special Needs Trust or an ABLE account, but those are completely separate from a Miller Trust.  Some people have both kinds of trusts, but again, these are two separate documents, and the information here is only for a Miller Trust, which deals with income.