Long Term Care word on notebookstethoscope and green plan
For many seniors, a frustrating paradox stands between them and essential healthcare: their Social Security or pension income is just high enough to disqualify them from Medicaid, but nowhere near enough to pay for private nursing home care out of pocket.
If your monthly income pushes you over the strict Medicaid limit, you aren’t necessarily out of options. In many states, a specialized legal tool called a Miller Trust—officially known as a Qualified Income Trust (QIT)—is the key to unlocking long-term care benefits.
The Problem: The Hard Income Cap
In 2026, many “income-cap” states limit an individual’s gross monthly income to $2,982.
Medicaid eligibility is rigid. If your gross monthly income is even $1 over the limit, you face an automatic disqualification from long-term Medicaid benefits. You cannot simply pay the difference out of pocket; without the proper legal structure, you are stuck in a coverage gap.
The Solution: What is a Miller Trust?
A Miller Trust (or QIT) is a specialized legal arrangement designed specifically for individuals who have too much income for Medicaid, but not enough to pay for long-term care.
It is exclusively used in “income-cap” states—states that do not allow you to simply “spend down” excess income on medical bills to qualify.
How It Works
By routing your excess income through a Miller Trust, the state legally disregards that money when calculating your Medicaid eligibility.
- Income is Redirected: Your regular income (like Social Security or a pension) is deposited directly into the trust’s bank account.
- Medicaid Disregards the Funds: Because the income is legally owned by the trust rather than you as an individual, Medicaid caseworkers “disregard” it during the financial assessment.
- Eligibility is Achieved: Your individual income successfully drops below the threshold, allowing you to qualify for coverage.
Income-Cap States vs. Medically Needy States
Depending on where you live, the rules for handling excess income vary drastically. States generally fall into two categories:
1. Income-Cap States (Requires a Miller Trust)
These jurisdictions do not allow a “spend-down” for long-term care. If you are over the limit, a Miller Trust is your only pathway to eligibility. These states include:
- Alabama
- Alaska
- Arizona
- Arkansas*
- Colorado
- Delaware
- Florida*
- Georgia*
- Idaho
- Indiana
- Iowa*
- Kentucky*
- Mississippi
- Nevada*
- New Mexico
- Ohio
- Oklahoma
- Oregon
- South Carolina
- South Dakota
- Tennessee*
- Texas*
- Wyoming
*Note: Some states feature a hybrid system, offering a Medically Needy pathway for certain programs (like standard medical care) but requiring a QIT for long-term care or Home and Community-Based (HCBS) waivers.
2. “Medically Needy” States (The Spend-Down Pathway)
In contrast, “Medically Needy” states allow applicants to subtract their out-of-pocket medical expenses from their gross income until they hit the state’s required threshold. The following states provide a medically needy pathway:
- Arkansas
- California
- Connecticut
- Florida
- Georgia
- Hawaii
- Illinois
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Montana
- Nebraska
- Nevada
- New Jersey
- New York
- North Carolina
- North Dakota
- Pennsylvania
- Rhode Island
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
Strict Rules and Requirements for a Miller Trust
A Qualified Income Trust is a highly regulated legal document. To maintain Medicaid eligibility, you must adhere to strict operational rules:
- Income Only: Only guaranteed, recurring income (such as Social Security or pensions) can be deposited into a Miller Trust. You cannot put assets, stocks, or non-income resources into this account.
- A Dedicated Bank Account: The trust must operate through its own distinct checking account. It is typically opened with a $0 balance using the beneficiary’s Social Security Number.
- Strict Spending Controls: Trust funds cannot be used for discretionary personal expenses (like gifts or vacations). The money is legally earmarked and can only be used for allowable medical costs, Medicare premiums, and a small, state-approved personal needs allowance.
- Medicaid Recovery Provision: A Miller Trust must include a “state payback” clause. Upon the death of the beneficiary, any funds remaining in the trust account must be used to reimburse the state for the cost of the Medicaid benefits provided.
