Hearing that your parent's income is too high for nursing home Medicaid is frightening, but in many states it is not the final word on whether Medicaid will help pay. Depending on where your parent lives, the way past the limit is a Miller trust, a medically needy spend-down, or a choice between the two. In 2026, the federal benchmark these rules turn on is $2,982 a month, which is 300% of the $994 Supplemental Security Income (SSI) benefit rate, though the limit that applies is the one your state publishes. Approval also doesn't end the monthly bill: most of your parent's income will still go to the nursing home, and knowing how much ahead of time takes some of the fear out of it.

In This Guide

Why Your State Uses a Trust or a Spend-Down When Income Is Too High

If you've been told "your mother makes too much," it can sound like a verdict. It's really a description of which door your state built.

Federal Medicaid law gives states two optional ways to cover people with income above the ordinary limits. The first is the special income level group for people in institutions. Federal matching money is available only if income before deductions stays at or under 300% of the SSI benefit rate. For 2026, 300% of the SSI rate is $2,982 a month, but the special income level that applies is the one in your state's own rules, and it doesn't always read $2,982.

The second is the medically needy program, the spend-down. Nursing facility care is not on the short federal list of services a medically needy program must provide, so whether a state's medically needy program pays for nursing home care is the state's own choice.

That choice decides whether a Miller trust is even available. Under Section 1917(d)(4)(B) of the Social Security Act, a qualified income trust gets its special treatment only if the state covers the special income level group but does not cover nursing facility services for the medically needy.

  • Income-cap state: no nursing home coverage through medically needy, so the Miller trust is the route.
  • Medically needy state: pays for nursing home care through a spend-down, so the federal trust route doesn't apply.
  • States that run both: a resident above the special income level uses the spend-down, as Louisiana's manual describes.

Income Too High for Nursing Home Medicaid? Find Your State's Route

The grid lists states whose own manuals or regulations state their route. If your state isn't listed, ask its Medicaid agency.

State Route above the limit What the state's own rule says
Alabama Miller trust Income limit $2,982; above it, eligible only with a Qualifying Income Trust
Arizona Miller trust (Income-Only Trust) Used only under the 300% gross income test of the Arizona Long Term Care System (ALTCS), $2,982 for 2026
Florida Miller trust Income cap of 300% of the SSI rate; applicants over it "may qualify" with an income trust
Georgia Miller trust (state guide) Medicaid CAP $2,982; medically needy budgeting does not pay the nursing home (details)
New Jersey Miller trust A qualified income trust (QIT) replaced medically needy for nursing facilities on December 1, 2014
Ohio Miller trust (state guide) Special income level $2,982; the older aged, blind and disabled spenddown ended in 2016 (background)
South Carolina Miller trust (Income Trust) Income routed through the trust doesn't count toward the Medicaid Cap
Tennessee Miller trust (state guide) Medicaid Income Cap $2,982; a QIT is required to become income-eligible
Texas Miller trust (state guide) Special income limit $2,982 on countable income; a QIT "can overcome" it
Louisiana Both; Miller trusts not used Residents over the special income level use a one-month long-term care spend-down
Virginia Both; Miller trusts not recognized Residents over the 300% limit go on a monthly medically needy spenddown
Michigan Both Extended-Care limit $2,982; a Group 2 (medically needy) deductible pathway remains
Minnesota Both The Elderly Waiver uses a 300% special income standard; nursing facility residents over the limit can use an LTC spenddown
New Hampshire Both Cap $2,982; medically needy above it, tested against the facility rate (see below)
Pennsylvania Both (medically needy guide) $2,982 limit for the non-money-payment categories, plus a medically needy only category
Wisconsin Both $2,982 categorically needy limit; medically needy above it, within limits (see below)
California Medically needy No special income level pathway in the table kept by the Medicaid and CHIP Payment and Access Commission (MACPAC); the route is a spend down of excess income
North Carolina Medically needy No special income level pathway in MACPAC's table; income is tested against the facility's own Medicaid and private rates
Massachusetts Medically needy (state guide) A six-month deductible; MassHealth doesn't pay the bills used to meet it
New York Medically needy standard Applicants above a category's level are directed to "spenddown to the Medicaid Income level"
Washington Both; ask whether a trust is used Special income level $2,982; a facility resident above it can still qualify under the medically needy program
Maryland Cost-of-care test Income is compared with the projected cost of care; spend-down is possible above it
Missouri Unsettled for nursing homes State agencies describe the trust's reach differently (see below)

Missouri

Missouri's agencies disagree on paper. The Department of Health and Senior Services home and community-based services (HCBS) manual limits Qualified Income Trust use to people needing nursing facility care or the Aged and Disabled Waiver. The Department of Social Services trust template names only the Home and Community-Based Waiver program (age 63 and over) and the MOCDD children's program as "QIT programs," not nursing facility coverage. In Missouri, ask the Family Support Division in writing which route applies before anyone signs a trust.

The other states that run both routes

In New Hampshire, Wisconsin, Michigan, Pennsylvania and Minnesota, the state rules we reviewed set out both the special income level and the medically needy route but didn't say whether a Miller trust is used. Ask the state agency before you set one up.

Route 1: How a Miller Trust Works

A Miller trust (also called a qualified income trust, QIT, or in Arizona an Income-Only Trust) sounds like something for wealthy families. It's the opposite: a tool for people whose income is a little too high. Our Miller trust glossary entry has the short definition.

What goes in, and who runs it

Federal law requires a Miller trust to hold only pension, Social Security and other income, plus income that builds up inside it. Arizona's ALTCS rules add that savings can't be used to fund it and that income goes in during the month it's received.

Many families ask whether Mom can simply be her own trustee. The Texas Health and Human Services Commission recommends that the beneficiary not serve as trustee, and its rules require the trust to be irrevocable. South Carolina goes further: the applicant cannot be their own trustee, and the trust needs a separate bank account in the names of the applicant and the trustee only. If you're the one taking this on, it's a monthly job, not a one-time signature.

The monthly deposit is where families get hurt

A trust that is set up correctly but funded late can cost a month of coverage.

  • Texas: income must be deposited the same month it's received, or it counts that month and can make your parent income-ineligible. A trustee who misses the distribution deadline, the last day of the following month, has made a transfer of assets. An entire income source must go in; a partial deposit is forgiven only in the first month. If a qualifying trust was already in place, the Texas income disregard can start up to three months before the application date.
  • Alabama: the first possible month of eligibility is the month the income goes into the trust account.
  • Georgia: the trust can't be backdated. It takes effect the month it is completed and signed by everyone required, and it must be set up in Georgia.
  • Arizona: money paid from the trust to your parent, or for shelter, counts as income for eligibility. The trustee must tell the local ALTCS office about changes in trust income 45 calendar days ahead.
  • South Carolina: eligibility can't start before the month the trust document is signed, and coverage for a month isn't approved until the trustee proves that month's income was deposited.

If you're the trustee, set up an automatic transfer for the day the check lands and keep every bank statement.

Route 2: How a Medically Needy Spend-Down Works

The word "spend-down" can feel like being asked to go broke first. For income, it means something narrower: your parent becomes eligible once medical bills equal the amount by which income exceeds the state's standard. Our spend-down glossary entry covers the basics.

Three details decide how that math works for your parent:

  • It's countable income, not gross. The excess is measured after the deductions the state's rules allow, not from the gross figure on a benefit statement.
  • The budget period is your state's. Federal rules cap budget periods at 6 months and let each state choose. Louisiana uses a one-month period for nursing home residents. Pennsylvania computes its medically needy spend-down over a six-month period.
  • Bills outside the Medicaid plan can count. States must count necessary services recognized under state law even if their Medicaid plan doesn't cover them, within reasonable limits the state may set.

States may also count a resident's future nursing home costs, projected to the end of the budget period at the Medicaid rate, but only if the state elects that option. Ask whether your state projects facility costs; it changes how fast the spend-down is met.

One thing doesn't vary from state to state: the bills used to meet a spend-down are not reimbursed by Medicaid. Your parent pays them.

And one warning for families in income-cap states. Georgia budgets an over-the-cap applicant without a trust as medically needy, but says that in that case "Medicaid will not cover the vendor payment to the nursing home." A spend-down in a trust state is not a substitute for the trust.

What Your Parent Pays Each Month After Approval

After eligibility, the state takes your parent's total income, subtracts a short list of allowances, and reduces its payment to the nursing home by what's left. Income that was disregarded to get your parent eligible, including income routed through a Miller trust, is still counted at this step. Texas says the same in its own rules: the co-payment is based on total income, including trust income, and Texas allows no deduction for trust administration costs.

Federal rules set the order of deductions: first the personal needs allowance, then an allowance for a spouse at home, then one for family at home, then incurred medical expenses such as health insurance premiums. The personal needs allowance must be at least $30 a month, and states may set it higher. Texas sets its nursing home personal needs allowance at $75 a month, effective since January 2024. Our personal needs allowance guide has more.

The spouse at home is protected by the community spouse income allowance, which is the shortfall between the state's minimum monthly maintenance needs allowance and the spouse's own income. The community spouse income allowance is deducted only to the extent your parent's income is actually made available to the spouse. For 2026, the federal minimum monthly maintenance needs allowance is $2,705 a month from July 1, 2026, in every state except Alaska ($3,381.25) and Hawaii ($3,111.25), and the standard maximum is $4,066.50. A fair hearing can allow more if the spouse at home shows exceptional circumstances causing significant financial duress. Our spousal impoverishment guide covers the resource side, and the Centers for Medicare & Medicaid Services (CMS) summarizes the federal spousal impoverishment rules.

Two notes on that example. The married figure is Texas-specific: Texas uses $4,066.50, which equals the federal maximum. Other states may use a different allowance, down to the federal minimum, which from July 1, 2026 is $2,705 everywhere except Alaska ($3,381.25) and Hawaii ($3,111.25); that changes the result. The example also omits health insurance premiums, which Texas may deduct.

Other states shift these numbers in small ways that add up. Tennessee subtracts a $70 personal needs allowance and lets the trustee keep up to $20 a month for trust expenses. South Carolina adds a trustee fee of up to $10 a month and bank charges of up to $20 a month for residents who needed an income trust. Ohio allows up to $15 a month for bank fees, attorney fees and other costs of setting up and running the trust.

When Income Is Higher Than the Nursing Home Bill

Some families hit a harder wall: income so high that a trust or spend-down still doesn't get the nursing home paid. That isn't a failure of planning on your part. These states test income against the cost of care itself.

  • Arizona: an Income-Only Trust works only if income outside the trust plus income in it is at or below the private pay rate for the area. The Arizona Health Care Cost Containment System (AHCCCS) can make a case-by-case exception when the private pay rate isn't enough to meet your parent's needs.
  • North Carolina: income is tested against the facility's Medicaid rate, then against its private rate for 31 days, then against predictable medical expenses the facility won't cover. An applicant whose leftover income exceeds those expenses is financially ineligible for help with the cost of care.
  • New Hampshire: above the $2,982 cap, a resident qualifies as medically needy only when net income is at or below the monthly Medicaid nursing facility rate.
  • Maryland: if income after deductions exceeds the projected cost of care, eligibility may come through spend-down under coverage group L99, but Medicaid then does not cover the cost of care in the facility. It covers other medical services instead.
  • Wisconsin: a resident over $2,982 is ineligible for medically needy Medicaid only if income is greater than monthly need, which includes the facility's private rate.

Home Care and Assisted Living Waivers

If you're hoping Dad can stay home with help or move to assisted living instead, the income rules follow him there, though not always in the same way. Our guide to what to do when income is too high for a home care or assisted living waiver covers those rules state by state.

States may cover a home and community-based waiver group made up of people who would qualify for Medicaid if they were in an institution. Where a state uses the special income level as a principal group, only the applicant's own income is compared with that standard, even if a spouse lives in the home. A person on a waiver waiting list is not eligible for that group. Federal sources also tie Miller trusts to waivers: the CMS waiver application asks each state whether it is a "Miller Trust State," but each state's own rules decide which waivers accept a trust.

After approval, a waiver participant keeps a maintenance allowance the state sets, not the nursing home personal needs allowance, and spousal protections reach waiver participants through September 30, 2027.

State rules for waivers can be stricter than for nursing homes:

  • Michigan: a MI Choice waiver applicant whose gross countable income is above $2,982 a month can't spend down to qualify.
  • Missouri: the Home and Community Based waiver income standard is absolute, so applicants can't spend down to qualify, though income deposited in a valid trust is excluded from that test.
  • Texas: a QIT works for home and community-based waiver services as well as nursing facility care, at the same $2,982 limit.
  • New Jersey: the trust route covers people in a nursing facility, an assisted living facility or their own home.
  • Washington: a person above the special income level can still qualify for Washington's Home and Community Services waivers under a net-income test that deducts the average nursing facility rate.

What Happens to Money Left in the Trust

This question often comes with guilt attached, as if asking it means you're thinking about money instead of Mom. You're not. You're making sure you understand what you're signing.

Federal law requires every Miller trust to pay the state whatever remains in it when your parent dies, up to the total amount Medicaid paid for your parent's care. In South Carolina, money in the trust account must reimburse Medicaid before any survivorship rights on the account take effect.

The trust's spending is narrow, too: Tennessee's trust can't pay trustee fees, attorney fees, funeral expenses or old medical bills. What your parent leaves in other forms is a separate question, covered in our guide to Medicaid estate recovery.

Your Next Steps

You don't have to solve all of this today. Take it in this order.

  1. Find your parent's route. Use the grid above, then confirm it with your state Medicaid agency, especially in Missouri or any state not listed. Our state-by-state guide to nursing home Medicaid covers the other eligibility gates.
  2. Check the right income figure. Ask whether your state measures gross or countable income. Texas, for instance, tests countable income. Our income limits by state guide has each state's number.
  3. In a trust state, set up the trust before the month you need covered. Use the state's template or form if it has one, open the separate account, and make the first deposit in the month the income arrives.
  4. In a spend-down state, start saving every medical bill. Services your state recognizes but its Medicaid plan doesn't cover can count, subject to the state's limits.
  5. Don't forget savings. A Texas QIT, for example, settles the income test only, not the countable resources test. The look-back on gifts applies too; see our look-back period guide and Medicaid planning strategies.

If your parent's income or family situation is complicated, a written answer from the state agency or an elder law attorney is worth getting before the first deposit.

Frequently Asked Questions

Will Medicare pay for the nursing home while we sort out Medicaid?

Only for a short time, and only for skilled care. Medicare Part A covers skilled nursing facility care on a short-term basis after a qualifying hospital stay, up to 100 days per benefit period. It doesn't pay for long-term custodial care.

Can the trustee pay Mom's bills straight from the trust account?

Not the way a checking account works. In South Carolina, a Miller trust account may pay your parent the personal needs amount or pay a spouse entitled to a spousal allocation, but checks may not be written to third parties on their behalf. Check your own state's rules before the trustee writes one.

When does a Miller trust end?

A Tennessee qualified income trust ends when your parent dies, when it is no longer needed for Medicaid eligibility in Tennessee, or when nursing facility or home and community-based care is no longer medically necessary or no longer received. Other states set their own terms.

Does a Miller trust help Mom qualify for SSI or a Medicare Savings Program?

Not in Texas. Income directed to a Texas trust is disregarded only for nursing home and waiver Medicaid; it still counts for SSI and for Medicare Savings Programs such as Qualified Medicare Beneficiary coverage.

Learn More

MedicaidMedicaid Long-Term Care and Nursing Home Coverage by StateMedicaid pays for nursing-home care in every state, but the income cap, level-of-care test, and rules vary. The federal floor, what changes, and your state. MedicaidMedicaid Income Limits by StateMedicaid income limits for 2026 depend on your pathway: expansion adults, aged and disabled, or nursing-home care. See the figures and your state's limits. FinancialHow to Pay for Nursing Home CareHow to pay for nursing home care in 2026: what it costs and how Medicaid, Medicare, VA benefits, long-term care insurance, and private pay each fit in. MedicaidMedicaid Personal Needs Allowance ExplainedHow the Medicaid Personal Needs Allowance works in 2026: the $30 federal floor, what the states set, and how patient liability is calculated. MedicaidMedicaid Spousal Impoverishment: How the At-Home Spouse Is ProtectedWhen one spouse needs Medicaid for long-term care, spousal impoverishment rules let the at-home spouse keep income and assets. Here's how the 2026 limits work.

Find personalized help working out your parent's Miller trust or spend-down with Brevy's care navigator at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.

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Brevy Care Team

Expert eldercare guidance from Brevy's team of healthcare professionals and researchers.