Alabama Medicaid Community Transition Waiver / Personal Choices Program

Overview of the Community Transition Waiver

Alabama’s Community Transition Waiver (ACT Waiver) primarily provides home and community based services (HCBS) for Alabama nursing home residents who are disabled or have long-term illnesses and want to return home or to the home of a family member. While program guidelines do not define “long-term illness”, it can be interpreted that Alzheimer’s disease and related dementias are likely qualifying illnesses, given that a Nursing Home Level of Care is required. The ACT Waiver also services Alabama state residents who are currently receiving services and supports from another Alabama HCBS Medicaid Waiver, such as the Elderly and Disabled Waiver, whose needs are not being met, and as a result, will need to be admitted to a nursing home if not for available benefits via the ACT Waiver.

The benefits received via the ACT Waiver vary based on the needs and circumstances of the program participant. For example, in-home personal care assistance, meal delivery, and home modifications might be benefits provided to promote independent living. In contrast, a program participant with an informal caregiver, such as a family member, might be eligible for adult day health care and respite care to supplement the care already being provided.

Services can only be provided in one’s home, the home of a family member with which a program beneficiary resides, or in an adult foster care home if only one person is being fostered. Services cannot be provided in group foster care homes or assisted living residences.

The services offered under this program may be provided by licensed care workers or program participants have the option to self-direct their personal care services via the Personal Choices Program. Via the self-directed option, program participants receive an allotted budget, which can be used to hire their own caregiver. One may hire their son, daughter, adult grandchild, niece or nephew, and in some cases, their spouse. Counselors are available to assist program participants in navigating the responsibility of directing their own care, while a financial management services agency handles the financial aspects of employment responsibilities (i.e., background checks, tax withholding, and caregiver payments).

The ACT Waiver is not an entitlement program; meeting eligibility requirements does not equate to immediate receipt of program benefits. Instead, there are a limited number of participant enrollment slots, and when they are full, a waitlist for program participation forms.

The ACT Waiver is a 1915(c) Medicaid Waiver. The Personal Choices Program is a 1915(j) State Plan Option.

Benefits of the Community Transition Waiver

Follows is a list of benefits available via the ACT Waiver. An individual care plan determines which services and supports a program participant receives. Some care services may be participant-directed, meaning the beneficiary is able to choose their care provider. These are indicated by an asterisk (*) below.

– Adult Day Health Care – Supervised care in a group setting a minimum of 4 hours / day. Transportation between home and the facility is provided.
– Assistive Technology – Devices / equipment used to increase functional ability ($15,000 lifetime limit)
– Case Management
– Companionship Services* – Supervision and limited assistance with non-medical daily living activities (i.e., bathing, dressing, mobility, meal preparation, laundry)
– Home Meal Delivery – Frozen and shelf-stable meals
– Home Modifications – Addition of wheelchair ramps, widening of doorways for wheelchair access, etc. ($5,000 lifetime limit)
– Homemaker Services* – Assistance with housecleaning, preparing meals, grocery shopping, picking up prescription medications, etc.
– Medical Supplies – As prescribed by a physician ($1,800 limit per year)
– Personal Assistance Service – Assistance for disabled persons with on-the-job, day-to-day activities
– Personal Care Services* – Non-medical assistance with personal hygiene, toileting, meal preparation, housework, etc.
– Personal Emergency Response Systems (PERS) – Includes installation and monthly charges
– Pest Control Service
– Respite Care* – Skilled / medical and unskilled / non-medical short-term care to alleviate a primary caregiver. Only unskilled respite care can be participant directed.
– Skilled Nursing
– Transitional Assistance Service – Financial assistance with security deposits, utility connection fees, moving expenses, etc. when relocating home from a nursing home

Eligibility Requirements for Alabama’s Community Transition Waiver

The ACT Waiver is for Alabama residents who are elderly (65+), or younger if disabled. Applicants must reside in a Medicaid-certified nursing home or be receiving home and community based services via another Alabama Medicaid Waiver that is not meeting their needs. Additional eligibility criteria are as follows:

Financial Criteria: Income, Assets & Home Ownership

Income
The applicant income limit is equivalent to 300% of the Federal Benefit Rate (FBR), which increases on an annual basis in January. In 2024, an applicant, regardless of marital status, can have a monthly income up to $2,829. When both spouses are applicants, each spouse is considered individually, with each spouse allowed income up to $2,829 / month. When only one spouse is an applicant, the income of the non-applicant spouse is not counted towards the income eligibility of their spouse. Furthermore, monthly income from the applicant spouse can be transferred to the non-applicant spouse as a Spousal Income Allowance, also called a Monthly Maintenance Needs Allowance.

In AL, the maximum amount of income that can be transferred to the non-applicant spouse is $2,555 / month (eff. July 2024 – June 2025) and is intended to ensure the non-applicant spouse has a minimum monthly income of this amount. Non-applicant spouses who have their own income equal to or greater than $2,555 / month are not entitled to a Spousal Income Allowance.

Assets
In 2024, the asset limit is $2,000 for a single applicant. For married couples, with both spouses as applicants, each spouse can have up to $2,000 in assets. When only one spouse is an applicant, the assets of both the applicant and non-applicant spouse are still limited. This is because Medicaid considers the assets of a married couple to be jointly owned. In this case, the applicant spouse can retain up to $2,000 in assets and the non-applicant spouse is allocated a larger portion of the couple’s assets as a Community Spouse Resource Allowance (CSRA).

The CSRA allows the non-applicant spouse to keep 50% of the couple’s assets, up to $154,140. If the non-applicant’s share of assets falls under $30,828, they can keep 100% of the assets, up to $30,828.

Some assets are not counted towards Medicaid’s asset limit. These generally include an applicant’s primary home, household furnishings and appliances, personal effects, and a vehicle.

Assets should not be given away or sold under fair market value within 60-months of long-term care Medicaid application. This is because Medicaid has a Look-Back Rule and violating it results in a Penalty Period of Medicaid ineligibility.

Home Ownership
The home is often the highest valued asset a Medicaid applicant owns, and many persons worry that Medicaid will take it. Fortunately, for eligibility purposes, Medicaid considers the home exempt (non-countable) in the following circumstances.

– The applicant lives in the home or has “Intent” to Return to it, and in 2024, their home equity interest is no greater than $713,000. Home equity is the current value of the home after subtracting any debt against it. Equity interest is the portion of the home’s equity value that is owned by the applicant.
– A non-applicant spouse lives in the home.
– The applicant has a blind or disabled child living in the home.
– The applicant has a child under 21 years old living in the home.

While one’s home is generally safe from Medicaid’s asset limit, it is not safe from Medicaid’s Estate Recovery Program. More on the potential of Medicaid taking the home.

Medical Criteria: Functional Need

An applicant must require at least one Waiver service on a monthly basis and need a Nursing Facility Level of Care (NFLOC). For the ACT Waiver, the tool used to determine if this level of care need is met is the Alabama Home and Community Based Services Program Assessment (HCBS-1) form. From a list of 11 criteria, an applicant must meet two. One of the criteria commonly met is the regular need for assistance with at least one of the Activities of Daily Living (i.e., transferring from the bed to a chair, mobility, eating, toileting, dressing). Relevant to some persons with Alzheimer’s disease or a related dementia, behavioral problems, such as aggressive physical behavior or inappropriate behavior, such as the removal of one’s clothes, are also considered. A diagnosis of dementia in and of itself does not mean one will meet a NFLOC.

Qualifying When Over the Limits

Having income and / or assets over Medicaid’s limit(s) does not mean an applicant cannot still qualify for Medicaid. There are a variety of planning strategies that can be used to help persons who would otherwise be ineligible to become eligible. Some of these strategies are fairly easy to implement, and others, exceedingly complex. Below are the most common.

When persons have income over the limits, Miller Trusts, also called Qualified Income Trusts, can help. “Excess” income is deposited into the trust, no longer counting as income.

When persons have assets over the limits, but not a great deal of “excess” assets, they can be “spent down”. This turns countable assets into non-countable assets. Examples of ways to do this include home projects, such as modifying the home for independent living or updating the plumbing, purchasing new appliances or furniture, and paying off existing debt. Applicants can also purchase Irrevocable Funeral Trusts, which are pre-paid funeral and burial expense trusts that Medicaid does not count as assets. Another option, but for persons who have a large amount of assets above Medicaid’s asset limit, is the Modern Half a Loaf. This strategy is complicated and should not be attempted without very careful planning. There are also many other options when the applicant has assets exceeding the limit.

Inadequate planning or improperly implementing a Medicaid Planning strategy can result in a denial or delay of Medicaid benefits. Professional Medicaid Planners are educated in the planning strategies available in Alabama to meet Medicaid’s financial eligibility criteria without jeopardizing Medicaid eligibility. Furthermore, there are additional planning strategies that not only help one meet Medicaid’s financial criteria, but can also protect assets from Medicaid’s Estate Recovery Program and instead preserve them for family as inheritance. These strategies often violate Medicaid’s 60-month Look-Back Rule, and therefore, should be implemented well in advance of the need for long-term care. However, there are some workarounds, and Medicaid Planners are aware of them. For these reasons, it is highly suggested one consult a Medicaid Planner for assistance in qualifying for Medicaid when over the income and / or asset limit(s). Find a Medicaid Planner.

How to Apply for the Community Transition Waiver

Before You Apply

Prior to submitting an application for Alabama’s Community Transition Waiver, applicants need to ensure they meet the eligibility criteria. Applying when over the income and / or asset limit(s) will be cause for denial of benefits. The American Council on Aging offers a free Medicaid Eligibility Test to determine if one might meet Medicaid’s eligibility criteria.

As part of the application process, applicants will need to gather documentation for submission. Examples include copies of Social Security cards, Medicare cards, life insurance policies, property deeds, pre-need burial contracts, bank statements up to 60-months prior to application, and proof of income. Unfortunately, a common reason applications are held up is required documentation is missing or not submitted in a timely manner.

Since the ACT Waiver is not an entitlement program, there may be a waitlist for program participation. The ACT Waiver is approved for a maximum of 675 participants per year. In the case of a waitlist, an applicant’s access to a participant slot is based on the date of Medicaid application and need for program benefits. Persons who submitted an application at a later date than other applicants may be awarded a participant slot first if their needs are greater.

Application Process

To apply for the ACT Waiver, applicants must fill out Form 204/205, which can be found on this webpage. (Under the application form is “Tips for Applying”, which applicants might find helpful). Application assistance is available by calling Alabama Medicaid’s helpline at 1-800-362-1504. Completed applications should be mailed to one’s Medicaid district office. As part of the application process, a needs assessment will be completed by an ACT Waiver case manager and a nurse.

Learn more about the ACT Waiver here, and learn more about the Personal Choices participant directed option here. Persons can also contact their local AAA (Area Agency on Aging) at 1-877-425-2243 or 1-800-243-5463 for information and / or assistance.

The Alabama Medicaid Agency administers the ACT Waiver and the Alabama Department of Senior Services (ADSS) operates the program. The Personal Choices State Plan Option is administered by the Alabama Medicaid Agency, Alabama Department of Senior Services (ADSS), and Alabama Department of Rehabilitation Services (ADRS).

Approval Process & Timing

The Medicaid application process can take up to 3 months, or even longer, from the beginning of the application process through the receipt of the determination letter indicating approval or denial. Generally, it takes one several weeks to complete the application and gather all of the supportive documentation. If the application is not properly completed, or required documentation is missing, the application process will be delayed. Based on federal law, Medicaid offices have up to 45 days to review and approve or deny one’s application (up to 90 days for disability applications). Despite the law, applications are sometimes delayed. Furthermore, as wait-lists may exist, approved applicants may spend many months waiting to receive benefits.