If you are a Colorado senior needing nursing home care, you may have encountered information regarding Medicaid. When you or your spouse require long-term care services, Health First Colorado (the state’s Medicaid program) can provide financial assistance with associated costs. Nevertheless, if your income exceeds certain thresholds, you might find yourself in a precarious legal situation.
You may be surprised to learn that even if you do not have much savings, Colorado Medicaid may still deny your application. Your monthly income may be “too high” by Medicaid standards. But on the other hand, your savings may not be enough to cover the high costs of professional long-term care.
In Colorado, you can resolve this issue using a legal tool known as a Miller Trust (Qualified Income Trust).
The income cap issue
To qualify for long-term Medicaid benefits in Colorado, your gross monthly income cannot exceed a specific legal limit (at $2,982 per month for 2026 but may change annually). If your income is over this limit, your Medicaid application will be denied.
High Social Security or pension benefits can push your monthly income over the eligibility limit. Before applying, review your total monthly income to see if you need a Miller Trust. If you exceed the cap, you will need a strategy to manage your funds and remain eligible.
What is a Miller Trust?
A Miller Trust is a special, Medicaid-approved legal arrangement designed to help certain people qualify for Medicaid long-term care. It provides legal ways for you to comply with the state’s monthly income limits for applicants.
The trust does not hide your money. Rather, Miller Trusts help you “divert” excess funds when your income is over the limit. Think of it as a special bank account for your income. Instead of the excess staying in your personal bank account, your income gets transferred directly into the trust. Once the money is in the trust, the state of Colorado no longer counts it toward the income limit.
Important things to know
Before you decide to set up your trust, there are a few important rules you need to know. For one, Miller Trusts strictly address income, as Colorado assesses your monthly income to determine if you qualify. They cannot touch or accept personal savings, property and other assets—only income. If your primary challenge is managing countable assets rather than income, a Miller Trust alone will not resolve your situation
You cannot freely use the money in your trust. A Miller Trust has rules for any funds placed in the account. The state approves the use of your trust money to pay for your medical expenses and a portion of your care costs. After you pass away, any money left in the trust typically must go to the state (up to the amount Medicaid paid). Because trust funds are paid out monthly toward care costs, leftover funds are rare.
The rules surrounding Colorado Medicaid are complex. It is advisable to work with a qualified Medicaid planner or legal professional to secure your long-term care benefits. Taking this step ensures the protection of your funds while you can focus on receiving quality care.