Made $1 Too Much for Medicaid? Stop! Don't Give Up. The 'Miller Trust' Hack That Qualifies You Instantly

⚠️ 2026 Update: Medicaid income limits are adjusted annually based on the COLA. The figures below reflect current estimates for the 2026 fiscal year.

⚖️ The "$1 Penalty" Trap

Your dad needs a nursing home that costs $12,000 a month. You apply for Medicaid to help cover the cost.

The Rejection: The Medicaid income limit is roughly $3,037/month (2026 est.), but your dad receives $3,100/month from Social Security and Pension.

Because he earns just $63 too much, he is disqualified from getting thousands of dollars in aid. This is the nightmare of "Income Cap" states. But there is a recognized legal strategy called the Miller Trust.

Made $1 Too Much for Medicaid? Stop!

A Miller Trust (officially known as a Qualified Income Trust or QIT) is a legal checking account utilized specifically to lower your "countable income" for Medicaid eligibility purposes.

How It Works (The Flow of Money)

It sounds complicated, but the concept is straightforward. You divert the excess income into the trust, so Medicaid strictly views his income as falling within the limit.

🔄 The Monthly Routine:

1. Deposit: Each month, the specific income source (e.g., Pension check of $3,100) is deposited directly into the Miller Trust bank account.
2. Countable Income: Because the money is correctly funneled through the trust, Medicaid calculates his countable income as $0 (or sufficiently reduced). He is now eligible!
3. Payment: The Trustee (you) writes a check from the trust to the Nursing Home to pay for his "Patient Share of Cost." Medicaid covers the remaining balance.

Do You Need One? (The "Income Cap" States)

Not all Americans need this. If you live in a "Spend Down" (Medically Needy) state, you can often just qualify by deducting medical expenses. However, in strictly defined "Income Cap" states, a Miller Trust is MANDATORY if income exceeds the limit by even a single dollar.

State Type	Key States (Examples)	Action Required
Income Cap States	Florida, Texas, Alabama, Colorado, Arizona, Mississippi	MUST have a Miller Trust if income > ~$3,037 (2026 est).
Medically Needy States	New York, California, Illinois, Massachusetts	Can typically "spend down" excess income on medical bills. Trust may not be required.

Crucial Rule: The trust must be "Irrevocable." Furthermore, upon the beneficiary's passing, the State (Medicaid) has the first claim to recover expenses from any remaining funds in the trust. This is the "Payback" provision.

Chief Editor’s Verdict

Do NOT try to set up a Miller Trust using a generic template found online. One wrong clause, and Medicaid will deny the application, potentially leaving you liable for months of nursing home bills.

Spend the $1,500 - $3,000 to hire a qualified Elder Law Attorney. It is a strategic investment that secures essential long-term care benefits.

[Legal Disclaimer]
The information provided in this article is for educational purposes only and does not constitute legal, tax, or financial advice. Medicaid rules (including Income Caps and Trust requirements) vary significantly by state and are subject to change annually (2026 figures are estimates). Reading this article does not create an attorney-client relationship. Always consult with a licensed Elder Law Attorney in your specific jurisdiction before making decisions regarding Medicaid planning or drafting legal documents.