The Income Test

(Income information for Medicaid Eligibility in Texas can be found in Section 2300 of the Health and Human Services Commission Medicaid Eligibility Handbook.)

In determining Medicaid eligibility, the applicant's gross monthly income is also considered. It is important to note only the applicant's income is counted. If the applicant is married, the community spouse's income is not counted. When a Medicaid eligibility worker considers the applicant's income, his or her gross income is counted, not just the amount the person receives each month in their social security or pension check. Usually taxes and Medicare insurance premiums are automatically deducted from these monthly checks. If this is the case, one has to be sure to add these in to properly calculate the total gross income.

Each state implements Medicaid differently. Texas is an "Income Cap" state. This means if a person's gross income exceeds $2,094.00 per month, he/she does not pass the income test. Normally, the applicant would not qualify for Medicaid. However, since 1993, there is a way to qualify even if the gross income exceeds the cap.

Miller Trust

In the situation when an applicant's gross income exceeds the income cap, he/she can establish a special Medicaid trust generally known as a "Miller Trust". In Texas this trust is sometimes referred to as the "Income Qualified Trust". This type of trust allows the applicant to meet income requirements in spite of having "excess income".

An applicant should have a Miller Trust drafted by an attorney who is familiar with the Medicaid guidelines in Texas to ensure that it is set up properly. The need for this type of trust should be determined before it is purchased. Unfortunately, many heath care providers mistaken this type of trust as a tool for preserving assets; however, it only solves the problem created by excess income when set up properly.

MIR, Inc. works under the direction of attorneys. However, this website is not a substitute for the advice of an attorney.