Does Maryland Require a Miller Trust? Income Rules Explained

The Short Answer: No, Maryland Does Not Use Miller Trusts

If you've been reading general Medicaid guides — especially ones written for states like Florida, Texas, or Arizona — you've probably encountered the Qualified Income Trust, commonly called a Miller Trust. These trusts are required in "income cap" states, where any applicant whose monthly income exceeds 300% of the Federal Benefit Rate ($2,982 in 2026) is automatically disqualified from Medicaid long-term care coverage. The Miller Trust captures excess income and routes it to the state, bringing the applicant's countable income below the cap.

Maryland doesn't work this way. The state is a medically needy spend-down jurisdiction, which means it handles excess income through a completely different mechanism. Understanding this distinction saves Maryland families from wasting time and attorney fees setting up a trust they don't need.

How Maryland's Spend-Down System Actually Works

Instead of disqualifying applicants with income above a hard cap, Maryland lets applicants "spend down" their excess income on medical expenses — most commonly, the cost of nursing home care itself.

The calculation works like this:

1. Start with the applicant's gross monthly income (Social Security, pensions, retirement distributions, all sources)
2. Subtract the Medically Needy Income Level (MNIL): $350 per month for a single individual, $392 per month for a couple
3. The remainder is the applicant's monthly spend-down liability

That spend-down amount functions like a health insurance deductible. Each month, the applicant must incur medical expenses equal to or greater than their spend-down liability before Medicaid kicks in to cover the rest.

Example: A parent receives $3,800 per month in combined Social Security and pension income. Subtract the $350 MNIL, and the spend-down liability is $3,450 per month. Since a Maryland nursing home costs roughly $12,927 per month — far more than $3,450 — the applicant meets their spend-down liability on the first day of each month. Medicaid covers the remaining $9,477.

In practice, many nursing home residents with income above the standard threshold qualify through the spend-down because nursing home costs generally exceed the spend-down amount for typical applicants. The applicant pays their share (the spend-down liability) to the facility, and Medicaid pays the balance.

Why This Matters More Than You Think

In income-cap states, a parent whose monthly income is $3,100 — just $118 over the $2,982 threshold — is completely locked out of Medicaid long-term care unless they establish a Miller Trust. Without the trust, they don't qualify. Period.

In Maryland, that same parent would have a spend-down liability of $2,750 ($3,100 minus $350). The nursing home costs $12,927. The parent pays $2,750, Medicaid covers $10,177, and no trust is needed. The higher the parent's income, the more they contribute to the nursing facility — but they still qualify.

This is a significant advantage for Maryland families. It means pension income, Social Security increases (including the higher benefits many retirees now receive after the repeal of the Windfall Elimination Provision and Government Pension Offset in January 2025), and retirement distributions do not automatically disqualify your parent from nursing home Medicaid. They increase the monthly patient liability, and eligibility still depends on the medically needy spend-down and other criteria.

The One Place Maryland's Income Rules Do Create a Hard Cap

For community-based programs like the Community Options Waiver, Maryland does enforce an income limit of $2,982 per month (300% of the Federal Benefit Rate). Unlike nursing home Medicaid, the waiver doesn't offer a spend-down pathway for applicants above this threshold.

This creates a real problem for parents whose income slightly exceeds $2,982 and who want to receive care at home rather than in a nursing facility. Because Maryland doesn't use Miller Trusts, these applicants can't use a trust to redirect excess income below the cap. Their options are:

• Apply for nursing home Medicaid (the medically needy spend-down works regardless of income level)
• Qualify through the Increased Community Services (ICS) program — specifically designed for nursing home residents with income above 300% of the FBR who have been institutionalized for at least six months on Medicaid, allowing them to transition to community-based care
• Apply for Community First Choice (CFC) — a state plan entitlement with no waitlist, though standalone CFC has its own income requirements tied to the medically needy standard

The waiver income cap is a genuine obstacle for some Maryland families, and it's one of the few situations where Maryland's system is less flexible than income-cap states that allow Miller Trusts for community-based programs.

What the Personal Needs Allowance Looks Like in Practice

Once your parent is approved for nursing home Medicaid, their monthly patient liability is calculated as:

Gross monthly income − $106 personal needs allowance − any applicable spousal income allowance = patient liability

The $106 personal needs allowance is the amount your parent keeps each month for personal expenses — toiletries, phone charges, clothing. Everything else goes to the nursing facility. If there's a community spouse whose income falls below the Minimum Monthly Maintenance Needs Allowance ($2,705), a portion of the applicant's income may be redirected to the spouse before calculating the patient liability.

Key Takeaways for Maryland Families

• Don't pay an attorney to set up a Miller Trust in Maryland — it's not recognized and not needed
• Income above $2,982 does not by itself disqualify your parent from nursing home Medicaid; the medically needy spend-down applies when the income is less than the monthly cost of care
• For a parent who meets the other eligibility criteria, higher income means a higher monthly contribution to the nursing facility, but Medicaid covers the gap
• The Community Options Waiver has a $2,982 income cap with no trust workaround
• The Social Security Fairness Act may have increased your parent's monthly benefit — factor this into the patient liability calculation

For a complete walkthrough of Maryland's income rules, patient liability calculations, and strategies for maximizing spousal income protection, see the Maryland Medicaid Long-Term Care & Asset Protection Guide.

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