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Impending Change Has Georgians Racing to Set Up Trusts

Georgia elder law attorneys are fielding calls from the distraught families of nursing home residents who will lose their Medicaid coverage on July 1. That's when the state's Medicaid income rules change and nearly 1,700 Georgia nursing home residents will be forced to pay for their care themselves or leave the nursing home because their incomes are too high.

The change in the law is intended to save the state millions, but state officials seem to have overlooked a provision in federal Medicaid law that allows nursing home residents whose incomes are too high for Medicaid to set up a special trust. Nursing home residents' loved ones are scrambling to set up such trusts before the July 1 deadline. As a result, the change in the law could wind up saving the state nothing.

Up till now, Georgia has been one of the states that allows nursing home residents whose incomes are higher than Medicaid law allows ($1,692 a month in 2004) to "spend down" to the Medicaid level by deducting their medical expenses, including nursing home costs, from income. But in order to balance the state budget, the law was changed this year, transforming Georgia into an "income cap" state, in which no deductions for medical expenses are possible.

Officials projected that becoming an income cap state would save the state nearly $10 million in the next fiscal year. But the officials appear not to have taken into account the availability of a special trust allowed under federal law, called a "qualified income" or "Miller" trust, which is an option for nursing home residents whose incomes are above the Medicaid ceiling. Excess income goes into the trust and is not counted in determining Medicaid eligibility.

"If every single person has a Miller trust, the state will absolutely not save any money," Alpharetta elder law attorney and ElderLawAnswers member Daniel Munster told the Atlanta Journal-Constitution.

Munster said he already has 15 requests from nursing home residents to set up Miller trusts. He said it will be impossible to get such trusts executed for all eligible beneficiaries by July 1.

Family members of nursing home residents are confused and outraged by the state's move.

"These are people being kicked out [of nursing homes] in three weeks — that's the message people are hearing," said Becky Kurtz, the state's long-term care ombudsman.

Nursing home operators, meanwhile, are worried about finding places to send discharged patients. Contrary to the state's assumption, most residents don't have families who can pay the private pay rate, said Fred Watson, president of the Georgia Nursing Home Association. The state should have exempted current nursing home residents from the change, Watson said.

For the full Atlanta Journal-Constitution article, go to: http://www.ajc.com/metro/content/metro/0604/09medicaid.html

For more on Medicaid's treatment of income, click here.