The Qualified Income Trust
The Problem
Florida enforces an income cap for Medicaid eligibility when it comes to institutional care, such as long-term custodial nursing home care. This cap is set by Florida Statutes Section 409.904 and is typically three times the SSI limit. For example, in 2000, the income cap was $1,536 per month. However, the average cost of nursing home care in Florida is much higher than this cap, according to the Agency for Health Care Administration. This means that even a small amount of income above the cap can make someone ineligible for Medicaid, depriving those in need of crucial care.
Congressional Response – The QIT
Instead of removing income as a factor, Congress created a workaround: the Qualified Income Trust (QIT). If a Medicaid applicant’s income exceeds the cap, they can create a QIT. Any income above the monthly limit is deposited into the trust, so for Medicaid eligibility purposes, their income does not exceed the cap. The excess funds stay in the trust until the Medicaid recipient passes away. At that time, the State of Florida is reimbursed from the trust for Medicaid funds paid on the recipient’s behalf.
State Recovery
After the Medicaid recipient’s death, the State must be reimbursed from the remaining trust funds for all Medicaid assistance provided under the State Medicaid program. Although this assistance is offered at a significant discount compared to private pay rates, the estate must still repay the State for the amount spent. However, this amount is usually much less than what would have been paid out-of-pocket for care.
How Shalloway & Shalloway, P.A. Can Help
Because Florida’s Medicaid income rules are strict and highly technical, a Qualified Income Trust must be set up and administered correctly to be effective. Working with an experienced Florida elder law attorney can help ensure the trust complies with state law and fits into a broader Medicaid planning strategy. Call us at (561) 686-6200 or contact us online: https://www.shalloway.com/contact-us/
