Gross Income Used to Determine Whether Qualified Income Trust is Necessary (Ohio)

In Merritt v. Ohio Department of Job and Family Services, Case No. CA2021-04-044 (12/27/2021), Jerome Merrit applied for Ohio nursing home Medicaid. His son, Glenn Merritt, arranged for Jerome’s admission to Heritagespring of West Cherster, using his healthcare and general power of attorney. The nursing home applied for Medicaid, but told Glenn that Jerome must establish and fund a qualified income trust (QIT).

Glenn established the QIT with $100, but made no further deposits until his Medicaid application was denied. Glen then fuded Jerome’s QIT in July 2020. He appealed denial of eligibility for prior months, arguing Jerome’s income should be caluclated AFTER payment of spousal support to two ex-wives. The administrative law judge disagreed and upheld the denial of benefits. Glenn appealed that decision as well. One issue on appeal was whether retroactive elgibility was available once the QIT was properly funded.

The Ohio Court of Appeals upheld the decision below. For purposes of determining whether a qualified income trust is necessary, the Department uses gross income, not net income or available income. “Thus, the plain meaning of the code makes clear that “available” income is determined by the person’s gross income before any deductions or exclusions are calculated.”

Regarding retroactive coverage, the Court held: “Given our analysis above, Jerome’s income made him ineligible for long-term Medicaid and he was required to fund a QIT with his excess income in order to become eligible. Thus, he remained ineligible until his QIT was properly funded, and he was not eligible prior to that date, retroactively or otherwise.”

The Court also rejected Glenn’s argument that the State is required to give notice that a QIT is necessary and rejected his argument that reasonable standards, required under 42 U.S.C. 1396a(a)(17), required the State to define the term “available.”