Indiana’s New Income Limit Rule and Its Potential Impact on Your Medicaid Eligibility

Beginning June 1, 2014, Indiana implemented a change to its Medicaid eligibility standards for those residing in nursing homes or receiving waivered services. The new rule currently limits the gross income of Medicaid recipients to $2,199.00 per month (updated May, 2015). Each year, this Special Income Level (SIL) may be adjusted. Medicaid recipients whose income exceeded the SIL prior to June 1, 2014, received a written notice from the Indiana Family and Social Services Administration (FSSA) explaining that their Medicaid benefits would cease unless immediate action was taken. According to FSSA estimates, over 3,200 Indiana Medicaid recipients (residing in nursing homes or receiving waivered services) had incomes exceeding $2,199.00.

Does this mean that anyone with income exceeding $2,199.00 is not eligible for Medicaid benefits to help pay for nursing home costs or waivered services? Not if the appropriate action is taken immediately.

In order to avoid a discontinuation of Medicaid benefits, FSSA requires that a Qualified Income Trust, also known as a Miller Trust, be established. Once the Miller Trust has been established, a person who is authorized to perform financial transactions on behalf of the Medicaid recipient must take it to the bank, or other financial institution, to open a new checking account in the name of the trust. Each month, income that exceeds $2,199.00 must be deposited into the Miller Trust account. All or some of the income of the Medicaid recipient may be deposited into this account each month. Failure to deposit at least the income exceeding $2,199.00 into the Miller Trust account by the end of the month that the income was received may result in a discontinuation of benefits.

The trust must be irrevocable, must contain only the income of the Medicaid recipient and must state, “Upon the death of the beneficiary, the trust assets shall be paid to the Medicaid agency of the State of Indiana up to the total amount of the Medicaid payments made to or on behalf of the beneficiary”.

**Effective January 1, 2020, the Special Income Limit is $2,349.00

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