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More Seniors in NJ to Get Access to Home-Based and Community Services

'Miller trusts' will help elderly, disabled qualify for Medicaid services delivered outside of nursing homes

Lowell Arye
Human Services Deputy Commissioner Lowell Arye talks about plans to help New Jersey seniors and disabled residents pay for home- and community-based services.. Listening to Arye's presentation is state Sen. Joseph F. Vitale (D-Middlesex).

The state is acting to remove a significant barrier that has prevented many seniors and disabled residents from receiving the home- and community-based services that were expanded this month.

Under the Medicaid Comprehensive Waiver, the state is increasing its funding for long-term services and support outside of nursing homes through managed care.

The state has long made it easier for residents to qualify for nursing homes than for home care and assisted-living residences. The disabled and elderly can subtract the average cost of nursing homes from their incomes, to determine if they were eligible for Medicaid.

But there was no equivalent deduction for healthcare services delivered outside of nursing homes.

Now the state is offering residents the option of deducting a portion of their income if they receive home and community services, which should make many more eligible for Medicaid.

The money that is deducted would be put into a bank account known as a Miller trust, named after a Colorado court case that first allowed these trusts.

In a Miller trust, some of a resident's money is put into the account every month. That amount is then deducted from the person’s total income to determine if he or she is eligible for home- and community-based Medicaid services and support. The money in the trust can only be spent on bank fees and other necessary and medical-related expenses, with the remaining amount given to Medicaid. States have been allowed to establish these trusts since the early 1990s.

“It’s going to be a huge help to people,” said Tom Begley, a lawyer specializing in elder and disability law and a partner in Moorestown-based Begley Law Group. Begley said client interest in the trusts will be “tremendous.”

State Human Services Deputy Commissioner Lowell Arye has said the state decided on using Miller trusts to meet its goal of expanded eligibility after an earlier plan to track how much residents hypothetically would spend on long-term services ran into operational challenges.

To qualify for Medicaid, New Jersey residents must have an income of less than $2,163.60 per month. While New Jersey joined other states in allowing deductions for nursing-home expenses in the 1990s, it didn’t follow some other states in allowing a similar deduction for services outside of nursing homes.

“It created an undue and unfair bias toward institutional care,” said Evelyn Liebman, AARP’s New Jersey associate state director for advocacy.

AARP lobbied for a home and community deduction for years before the state decided to pursue the comprehensive waiver. With an eye toward “balancing” more Medicaid long-term funding outside of nursing homes, state officials have been exploring ways to expand financial eligibility.

State officials have cited operational challenges in making this change, while Liebman noted that the retirement of many experienced human services workers made it more difficult for the state to track the substantial paperwork needed to expand eligibility.

Discussions between state officials and AARP representatives led to Miller trusts as a solution.

“The idea is not to impoverish someone,” while still targeting Medicaid funding to those with medical and financial need, Liebman said.

Liebman described the trusts as “progress” and said state officials have been willing to work with advocates.

“It would help us rebalance and also would eliminate the inequity of having a system biased toward institutional facilities rather than having people receiving home- and community-based supports,” she said.

But she said AARP representatives still have several concerns. Residents will have to work with banks and attorneys to establish the trusts – meaning that residents with limited financial or intellectual capacity will need assistance at little to no cost, Liebman said.

In addition, AARP wants the state to ensure potentially eligible residents are aware of the trusts as an option, and that the state allow mortgage or rent payments to be placed in the trusts.

While the state is wrapping up the details of the program, it’s announced that it will be retroactive to July 1. That’s an important date, since the state’s five insurers that serve as Medicaid managed-care organizations started offering managed long-term services and support then, a central mechanism for shifting more focus to home- and community-based services under the waiver.

The Miller trust program will be established on an interim basis through June 30, 2015, when the state will assess its effectiveness. Liebman said AARP would also be keeping a close eye on whether it works as intended. She said Indiana did a good job of working for local agencies that serve seniors to help them with the trusts, but that it still took many residents time to find banks willing to open the accounts because they weren’t familiar with them.

Lori Wolf, a partner in the Hackensack office of law firm Cole Schotz, said New Jersey has less flexibility than most other states in allowing residents to protect their financial assets and receive Medicaid long-term services.

“The use of Miller trusts, even in a limited scope, is going to make more families comfortable,” said Wolf, who has advised clients on elder care planning.

Begley added that it’s going to benefit both residents and the state -- both by making it easier for residents to remain in their homes rather than in nursing homes and by reducing the cost to Medicaid, since home- and community-based services are generally less expensive than nursing homes.

Nursing-home industry advocates have noted that the industry is facing several challenges, including caring for a more severely ill population as younger, healthier residents are able to live in the community.

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