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Problem: Monthly income continuously bumps assets over limit. What to do? Medicaid says they don't know what to do either.

Income Limit: $2200 Asset Limit: $2000.
Income is $2100 and each month when it is direct deposited into the account I receive a denial letter due to over on assets.
Assisted living cost $3800 per month so there is still not enough money to pay bills.

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Talk to an attorney and create a miller trust. The money over the qualifying limit is placed into the trust... This brings the income down to qualifying limits. The beneficiary of the trust is Medicaid, so it is paid back to Medicaid in the end, but, meanwhile the elder can get below to income line

Get an attorney and get one set up
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So, is the idea that Medicaid is paying the difference between her income and the cost of AL.?
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No. Medicaid pays $1100 toward AL and the family pays the difference.
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Maybe I'm missing something here. Why isn't Medicaid paying the difference between her income and the cost of care?

Alternatively, how about setting up her account so that her pesion and SS checks get deposted to NH instead of her bank account?
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