- Under federal law, NJ is allowed to offer expanded Medicaid programs to individuals whose income exceeds the Medicaid income cap.
- Since NJ proposed to offer expanded Medicaid coverage, 42 S.C. 1396a sets forth the Federal government’s requirements for the state Medicaid plan and sets forth regulations for how the programs will be administered.
Understanding NJ’s Obligation to Provide Assisted Living Medicaid
Federal Medicaid regulations can be found in Title 42, Chapter IV, et seq. New Jersey must comply with these Federal regulations in its Medicaid plan.
New Jersey’s Medicaid plan is called a 1115 Demonstration. It includes two components, Managed Long-Term Services and Supports (“MLTSS”) which covers assisted living services, and Home and Community Based Services (“HCBS”). New Jersey consolidated its Medicaid programs into this 1115 Demonstration Waiver program in 2015. The timing is important. “Pursuant to its approved State Plan medically needy groups and medically needy categories were now eligible for Medicaid long-term care if they establish a QIT, also known as a Miller Trust.
Sometimes an individual’s gross monthly income is not counted when determining financial eligibility for Medicaid long-term care. How can that be, you may ask? Well, by “using what is known as a QIT (a Qualified Income Trust), all individuals in need of institutional services under [MLTSS], may now receive nursing facility services or Home and Community-Based Services including assisted living.”
QIT’s and How They Work to Achieve Medicaid Eligibility
The State Medicaid Manual states that income can be placed into a properly created Miller Trust (QIT) by the recipient of the funds “without those funds adversely affecting the individual’s eligibility for Medicaid. Also, income generated by the trust which remains in the trust is not income to the individual.
With income paid to the QIT, and remitted for room and board, all remaining payments qualify as medical assistance. Medical assistance is defined under 42 U.S.C. §1396(d)(a) as “payment of part or all of the cost of the following care and services or the care and services themselves.” It then goes on to list medical services it covers, which includes the following:
(d)(a)(3) other laboratory and X-ray services
(d)(a)(6) Medical care or any other type of remedial care required
under state law furnished by licensed practitioners within the
scope of their practice as defined by State law; and
(d)(a)(12) Prescribed drugs….
The statute points to the definition of medical care, and defines medical care as follows:
The term “medical care” means amounts paid for (A) the diagnosis, cure, mitigation, treatment or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body, (B) amounts paid for transportation primarily for and essential to medical care referred to in subparagraph (A) and (C) amounts paid for insurance covering medical care referred to in subparagraphs (A) and (B).
Medicaid can now be offered by the states in a nursing facility or in a home community-based setting.
As previously stated, Federal regulations set rules and restrictions on the state’s Medicaid programs. Federal law does not mandate that states like NJ offer “Medicaid only” programs like MLTSS, but if they do, “they are subject to various statutory restrictions in determining to whom medical assistance should be extended.”
In New Jersey, all assisted living charges for room and board must be paid for by the individual. If the individual does not have sufficient funds to pay for room and board, the individual is required by New Jersey to apply for Supplemental Security Income and use that income to pay room and board charges to the assisted living.
New Jersey Assisted Living Medicaid
New Jersey’s Assisted Living program is provided under a Section 1915(c) federal waiver. Its purpose is to avoid nursing home institutionalization. An applicant has the option of choosing to remain in an assisted living (HCBS) or relocating into a nursing facility once he or she meets the eligibility criteria for MLTSS.
N.J.S.A. §30:4d-3 & N.J.A.C. §10:71-3 et. seq. determines when an applicant is qualified for assisted living and home-based Medicaid to qualify an interested individual.
- Must be a USA citizen. N.J.A.C. §10:71-3.3
- Must be a New Jersey resident. NJ.A.C. §10:71-3.4
- Must be blind, disabled or over the age of 65. N.J.A.C. §10:71-3.9
- Must require a nursing home level of care for medical eligibility as determined by a nurse in a pre-admission screening. N.J.A.C. §10:71-3.10 & §8:85-2.1.
- Gross monthly income must be at or below $2,250, or if there is excess income, it is to be deposited into a Qualified Income Trust (QIT) beginning with the month eligibility is sought. NJ.A.C. §10:71-5.2 & 10:71-5.6. (Emphasis added)
- Countable resources are $2,000 or less the first minute of the first day of the month that eligibility is sought. J.A.C. §10:71-4.5.
Conclusion
Income eligibility is calculated based upon an applicant’s income received each month. Income exceeding the monthly eligibility cap of $2,250 must be deposited into a QIT account in that month. Income in a QIT is disregarded for eligibility purposes.
An applicant’s monthly income that exceeds a facility’s monthly semi-private pay rate does not make an applicant ineligible for Medicaid. New Jersey must include medical assistance expenses, in addition to the assisted living facility cost, health insurance premiums, diagnostic testing and prescription medication costs in its Medicaid eligibility decisions. New Jersey cannot engage in unlawful rule making by imposing eligibility criteria not supported by Federal law.
To discuss your NJ Medicaid matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Medicaid Attorney