Many seniors find themselves in need of Medicaid to pay for their long-term care but are surprised to learn that their modest monthly income may disqualify them. The reason for this is that Medicaid is a means-tested benefit. In other words, you must not have income exceeding certain thresholds in order to qualify and receive Medicaid benefits. For example, in New Jersey, the monthly income limit for nursing home or community-based services is $2,523 for individuals and $5,046 for married couples.Medicaid expects all of an applicants monthly income, besides a monthly personal needs allowance and Medicare premiums, to go toward nursing home costs. So, what if you have more income and other expenses? A Miller Trust may help you resolve this dilemma.A Miller Trust is a Medicaid planning tool that can assist you in meeting the income limits and qualifying for Medicaid. Unlike other planning tools, Miller Trusts don't have specific disability or age requirements. How Does a Miller Trust Work?If your income exceeds Medicaids income limit, you can deposit the amount of your excess income into a Miller Trust also referred to as a qualified income trust. Once it's deposited into this trust, it's not counted as income by Medicaid. However, to qualify, a trust must be irrevocable, which means you cannot cancel or change it. Once you put money into the trust, you cannot get it back directly. However, the trust can pay certain expenses on your behalf.A Miller Trust is a good option for any Medicaid applicant needing long-term care services, whether at home, in their community, or in a skilled nursing care facility. This trust is created by the applicant, a guardian, or a person with a properly drafted power of attorney. A trustee is chosen to manage the trust and the income deposited. Anyone other than the Medicaid applicant can serve as a trustee. Once the trust is set up, the trustee establishes a bank account to receive excess income from the Medicaid applicant. The income can only be used for certain expenses. For example, it may be used to pay the personal needs allowance of an individual in a nursing home, Medicare premiums, bills not covered by Medicaid, or supplement costs of a nursing home.Another requirement of a Miller Trust is that the applicants state Medicaid agency will be the beneficiary of any remaining funds in the trust upon the death of the Medicaid applicant. The amount the state receives is limited to the total value the state paid in long-term care on behalf of the applicant. Any amount remaining after this payment may go to a person the applicant chooses.Medicaid Income CapYou should be aware that not every state allows Miller Trusts as a method to qualify for Medicaid. Currently, only about 25 states, known as income cap states, permit it. Other states don't impose an income limit for nursing home care, and so there's no need for a Miller Trust in these locations. For example, in Massachusetts, you would pay all your income, minus certain deductions, to the facility, and Medicaid would pay the remaining cost.Before creating a trust, it's important to speak with an elder law attorney to ensure this option is right for you. If you live in a state where this isn't allowed, there may be other options, such as pooled income trusts, which serve a similar purpose.For guidance in Medicaid planning, consult a qualified elder law attorney in your area. You can also learn more about how Medicaid treats income on the ElderLawAnswers website.

It has been a tumultuous few years. Amid a continuing pandemic, tense midterm elections, and a war in Ukraine, we have grappled with more than our fair share of grim news. However, with the new year upon us, there are some silver linings in particular for seniors. Here are five reasons for seniors to celebrate in 2023:1. Social Security Benefits Are Seeing the Biggest Increase in 40 Years.Social Security beneficiaries will find that their monthly checks are increasing by nearly 9 percent, come January 2023. This cost-of-living adjustment (COLA) is the largest boost to Social Security benefits in more than four decades.For more than 65 million individuals currently receiving these benefits, payments will rise by about $140 on average per month.If you're a Social Security beneficiary, you can get an estimate of how much more you'll be receiving in 2023 by using the online My Social Security portal on the Social Security Administration website. 2. Medicare Part B Premiums Are Lower.For the first time in more than 10 years, Medicare Part B enrollees will see some of their costs decline.The Centers for Medicare and Medicaid (CMS) announced that the following will take effect in 2023:The Medicare Part B basic monthly premium is decreasing by $5.20 per month (savings of $62 for the year).The Medicare Part B annual deductible is decreasing by $7 per month (savings of $84 for the year).Note that beneficiaries with higher incomes pay higher monthly premiums. Read more in the news release from CMS.3. You Can Contribute More Than Ever to Retirement.The IRS is allowing record increases in 2023 for contributions to 401(k)s, Roth IRAs, and traditional IRAs.If you're working and have a 401(k), 403(b), or 457 plan, you can contribute up to $22,500 to that account in 2023. Working individuals who are 50 years and older can contribute another $7,500.If you have a Roth IRA or IRA, you can now contribute $6,500 in 2023 (up from $6,000 in 2022).4. You Dont Have to Wait Months for Medicare Part B Coverage to Begin.A new rule is also setting seniors up with improved access to health care coverage. In the past, if you waited until the last three months of your Initial Enrollment Period (IEP) to enroll in Medicare, you would have to wait another two to three months before your coverage began.As of January 1, 2023, if you enroll in Medicare during the last three months of your IEP, your Medicare Part B coverage will begin on the first day of the month after you sign up. You won't have to wait several months to receive benefits.If you sign up for Medicare during the General Enrollment Period, which runs from January 1 to March 31, you used to face a coverage gap. Coverage did not begin until July 1. Starting in 2023, your coverage will start the first day of the month after you enroll.5. SSI and SSDI Benefits Are Also Seeing a Boost.If you're a beneficiary of Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), you'll see modest increases in your monthly benefits payouts before the new year. Beginning on December 30, 2022, SSI individual recipients will receive $73 more a month. Couples will receive $110 more in SSI benefits per month.Meanwhile, SSDI benefits will see a monthly increase of about $119 more on average for those who are not blind. Access a comprehensive list of all 2023 Social Security changes in PDF format. 

There is nothing in Medicaid Law that causes more confusion than the 5-Year Look Back Period.Many people mistakenly believe that you can't do any planning within 5 years of needing care. This isn't exactly true. Here's how the Look Back Period Works: If you go into a nursing home and want to apply for Medicaid benefits to pay the bill, you must be below the low asset thresholds. Many families try to transfer assets to their children so that they can qualify without spending all of their money on care.However, when you apply for Medicaid, you must report any assets that you have gifted during the last 5 years. If you have made gifts, the state will impose a penalty period, during which time Medicaid will not pay your nursing home bill. The length of the penalty period depends on the amount of the gift. This is a problem because the nursing home is providing needed care and they deserve to be paid. But if you aren't eligible for Medicaid because you gave away your assets, then no one is paying their bill. This could force the nursing home to sue your children for payment. If your family has already made gifts, there are ways to fix the problem. There are also less risky options for Medicaid eligibility planning. While gifting during the 5-Year Look Back Period can be problematic, there are several other options available to protect assets, even after someone is in the nursing home. To learn more, consider attending one of our complimentary Elder Law Workshops. Register on our website at www.sechlerlawfirm.com/workshops/ or call my office at 724-564-6615 to schedule an initial consultation. Editors Note: This article was written by Tim Sechler, Esq., a Certified Elder Law Attorney and Principal of Sechler Law Firm, LLC.

If you are already 65 or approaching that age and remain employed and eligible for your employers health insurance coverage, you should not ignore the potential opportunities of Medicare coverage. The following are four potentially serious mistakes thatmany boomers should be cautious of when they become Medicare eligible.Missed Opportunity. You have a seven-month window to sign up- three months before your 65th birthday, the month of your birthday and three months after - so it is critical to get the timing right. Signing up in hopes of getting coverage early does not work and signing up late - even though you are still working - may result in financial penalties, which do not disappear.Electing COBRA coverage. Another mistake is taking COBRA (Consolidated Omnibus Budget Reconciliation Act) and not signing up for Medicare Part B. If you are 65 or older when you leave your employer and your employer offers you the opportunity to keep your health insurance through COBRA, chances are you should say no thanks. This applies even if your employer offers to pay your health coverage once you retire.Choosing Medicare Advantage because it seems easier. Medicare Advantage plans offer all-in-one options that are very similar to the health care coverage many people maintained while employed. However, traditional Medicare coverage with a Medigap supplemental plan and Medicare Part D prescription drug insurance while seemingly more complex, is likely the better choice for someone with a chronic medical condition or a serious illness.Failure to shop for coverage. For most people, their first Medigapchoice is their lasting choice because their options diminish once the initial selection is made. Aside from the initial Medicare eligibility age of 65, every year thereafter during the Medicare open enrollment period beginning October 15th through December 7th, you will have the opportunity to change Medicare Advantage plans. Its the enrollees decision and you may decide to make that an annual exercise. Before you enroll in any Medicare plan, carefully review your options.Whether you are approaching age 65 or have already arrived, seek advice from a licensed advisor that desires to help you with what options work best for you today and in the future.Editors Note: This article was written by Crystal A. Manning, Medicare Advisor. For more information on avoiding the above mistakes contact her directly at (412) 716-4942 or email crystalmanning33@gmail.com.