M.K. resided in an assisted living facility (ALF) since 2006. She applied for Medicaid benefits and was approved as of May 1, 2015. Due to the income limitations of the Medicaid program, M.K. deposited all of her income in a Qualified Income Trust, or QIT. By doing so, income deposited in the QIT was not considered by Medicaid in determining M.K.’s eligibility for Medicaid.

In 2017, the county welfare board did a routine re-determination of M.K.’s Medicaid eligibility. At that time, the Medicaid agency determined that M.K. was ineligible for Medicaid based upon excess income. In that regard, M.K.’s gross monthly income was $3,748.90, while the room and board charges for a semi-private room at the ALF was $120.00 per day, or $3,720 per month. Since M.K.’s monthly gross income for the semi-private room in which she resided at the ALF exceeded the room and board charges for the years 2016 and 2017, M.K. was found to be ineligible for Medicaid, and her benefits were terminated.

M.K. appealed, claiming that the Medicaid agency failed to consider the actual costs charged by the ALF, which far exceeded her income.

On appeal, the administrative law judge (ALJ) reversed the Medicaid denial, reestablishing M.K.’s eligibility. The ALJ held that all income deposited in the QIT was exempt and should not have been considered by Medicaid in determining continuing eligibility. In addition, then ALJ found that the agency did not cite any law or regulation which supported its decision to count the income deposited into the QIT in determining M.K.’s eligibility for Medicaid. The Director of the state Medicaid agency affirmed the ALJ’s decision.

The ALJ’s decision is annexed here – M.K. v. Morris County Office of Temporary Assistance

The Director’s Final Agency Decision is annexed here – M.K. v. Morris County Board of Social Services (final agency decision)

For additional information concerning Medicaid applications and appeals, visit:

NJ Medicaid Applications

For additional information concerning Medicaid and public benefits planning, visit:

NJ Medicaid and Public Benefits Planning