Do you need a Miller Trust to qualify for Medicaid in Texas?

A Miller Trust is also called a "supplemental needs trust" and is a U.S specific term for a kind of special needs trust.

These supplemental needs trusts are compliant with rules of U.S state and federal laws, and are created to provide benefits to - and protect the assets of - physically disabled or mentally disabled persons. And still allow these persons to qualify for, and receive federal and Texas state health care benefits.

Especially long term nursing home care benefits under the TX Medicaid welfare program. Supplemental or SNT are frequently used to receive an inheritance or personal injury litigation proceeds on behalf of a disabled person in order to allow the person to qualify for Medicaid benefits in Texas and other states.

Miller Trust - Medicaid

A Miller Trust can be used to qualify a Texas Medicaid applicant with income in excess of the eligibility limit for long-term care assistance from Medicaid.

This type of trust is not really a special needs trust, it is not funded with the beneficiary's assets. The Miller trust can be named as recipient of the person's income, from a pension plan, SSI, or other income sources. As with a self settled special needs trust upon the death of the beneficiary, the Texas State Medicaid agency must be paid back for its medical assistance from any remaining assets in the Miller trust.

Still occasionally used is an older name for the trust - is “Utah Gap" trusts, reportedly coined by a Colorado advocate describing the gap between the income cap for eligibility and the actual cost of nursing home care as similar to the yawning chasm between mesas dotting the Southern Utah landscape. The Miller trust is significant only in those states which impose an income cap on Medicaid long-term care eligibility; ironically, Utah is not one of those states. Income caps are in place in about half of the states including Texas.

As an example - if your gross monthly income is $2,500 then - according to Medicaid you have too much income.  However, they do not have sufficient income to pay the full private nursing home rate which can be over $5,500 per month.

Should you apply for Medicaid in TX with income above this limit, and do not have a Miller Trust - then your application will certainly be denied and you will be stuck with uncovered nursing home costs until you establish proper eligibility. With no nursing home Medicaid coverage, the nursing facility may be looking at you to pay those fees that can run in excess of $5,000 per month.

The applicant, or some other person acting for the patient, can establish a proper Qualified Income Trust. (Miller Trust). When the document is properly prepared and signed - a bank account is set up for the management of the trust.  Every month the patient’s income is deposited into the trustaccount and payments are made to the nursing home from the Miller Trust funds. The person is entitled to a payment of $60 as a Personal Needs Allowance. They may spend the Personal Needs Allowance any way they want.

You should have a Miller Trust drafted by a lawyer who is familiar with the Texas Medicaid guidelines to make sure that it is set up properly.

When to start a Miller Trust in Texas

When you are dealing with the costs of nursing homes, the sooner you start planning for the trust - the better.

Any delays in proving eligibility for Texas Medicaid benefits increases the risk of holes in Medicaid coverage which may leave you, or family members having to pay. You should really begin the process the same month you apply for Texas Medicaid benefits. If you start earlier, it may save you a month or two of non-reimbursed nursing home expenses.

Each payment you make to a nursing home reduces the amount of money available to protect your assets.