Alabama Medicaid Elderly & Disabled Waiver: Benefits, Eligibility & How to Apply

Last updated: January 23, 2025

 

Overview of the Elderly and Disabled Waiver

Alabama’s Elderly and Disabled Waiver (E&D Waiver) provides Home and Community-Based Services (HCBS) for Alabama residents who are elderly and disabled and at risk of being institutionalized (being placed in a nursing home). The benefits received vary based on the needs and circumstances of the program participant. A senior living alone might receive in-home personal care assistance and homemaker services to promote independent living, while a senior with an informal family caregiver might be eligible for adult day health care and respite care to supplement the care already being provided.

The services offered under the E&D Waiver may be provided by licensed care workers or program participants have the option to self-direct their care via the Personal Choices Program. Via the participant-directed option, program participants receive an allotted budget, which can be used to hire their own caregiver. Qualified caregivers include sons, daughters, adult grandchildren, nieces, nephews, and in some cases, spouses. Counselors are available to assist program participants in navigating the responsibility of self-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).

Program participants can live at home or in an adult foster care home that serves only one participant. They cannot live in a group adult foster care home or an assisted living residence.

The E&D Waiver is not an entitlement program; meeting eligibility requirements does not equate to immediate receipt of program benefits. Instead, the number of participant enrollment slots is limited, and when they are full, a waiting list for program participation forms. A portion of these slots (25 slots) are reserved annually for persons residing in nursing home facilities who wish to transition back to community living.

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Wait List Alternatives: Are you interested in connecting with a Medicaid Planning Professional to discuss alternatives to Alabama’s Elderly and Disabled Waiver? Wait-lists can last from months to years, but there are other Medicaid programs that offer immediate care outside of nursing homes.
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The E&D Waiver is formally called the Alabama Home and Community-Based Elderly and Disabled Waiver. It is a 1915(c) Medicaid Waiver. The Personal Choices Program is a 1915(j) State Plan Option.

 

Benefits of the Elderly and Disabled Waiver

Follows is a list of potential benefits available via the E&D Waiver. An individual care plan determines which services and supports a program participant receives. Some care services may be participant-directed, allowing the beneficiary 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.
– Adult Companionship Services* – Supervision and limited assistance with non-medical daily living activities (i.e., bathing, dressing, mobility, meal preparation, laundry)
– Assistive Technology / Durable Medical Equipment
– Case Management
– Home Meal Delivery – Frozen and shelf-stable meals
– Home Modifications
– Homemaker Services* – Assistance with housecleaning, preparing meals, grocery shopping, paying bills, etc.
– Medical Supplies
– Personal Care Services* – Non-medical assistance with personal hygiene, toileting, meal preparation, housework, etc.
– Personal Emergency Response Systems (PERS) – Installation and monthly fee
– Pest Control Services
– Respite Care (Skilled) – In-home, short-term medical care to alleviate a primary caregiver
– Respite Care (Unskilled)* – In-home, short-term non-medical care to alleviate a primary caregiver
– Skilled Nursing
– Supervisory Visits

While services can be provided in an adult foster care home, the E&D Waiver does not cover the cost of room and board.

 

Eligibility Requirements for Alabama’s Elderly and Disabled Waiver

The E&D Waiver is for Alabama residents who are elderly (aged 65+), or younger if disabled, and at risk of nursing home placement. 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 annually in January. In 2025, an applicant, regardless of marital status, can have a monthly income up to $2,901. When both spouses are applicants, each spouse is considered individually, with each spouse allowed income up to $2,901 / 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 2025, 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) to prevent spousal impoverishment.

The CSRA allows the non-applicant spouse to keep 50% of the couple’s assets, up to $157,920. If the non-applicant’s share of assets falls under $31,584, they can keep 100% of the assets, up to $31,584.

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 applying for Alabama’s Elderly and Disabled Waiver. Medicaid has a Look-Back Rule and violating it results in a Penalty Period of Medicaid ineligibility.

 To determine if you might have assets over Medicaid’s countable limit, and if so, receive an estimate of the amount, use our Medicaid Spend Down Calculator.  

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 home, and in 2025, their home equity interest is no greater than $730,000. 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.

 

Medical Criteria: Functional Need

An applicant must require a Nursing Facility Level of Care (NFLOC). For the E&D 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 (i.e., removal of one’s clothes), are also considered. A diagnosis of dementia in and of itself does not mean one will meet a NFLOC.

 Learn more about long-term care Medicaid in Alabama. 

 

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 limit, 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 limit, Irrevocable Funeral Trusts (IFTs) are an option. IFTs are pre-paid funeral and burial expense trusts that Medicaid does not count as assets. Another option are Medicaid-Compliant Annuities, which turn countable assets into a stream of income. There are 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 for family as inheritance. In other words, these planning strategies protect assets from Medicaid’s Estate Recovery Program. 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. 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 Certified Medicaid Planner.

 

How to Apply for the Elderly and Disabled Waiver

Before You Apply

Prior to submitting an application for the Elderly and Disabled 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 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 E&D Waiver is not an entitlement program, there may be a waiting list for program participation. The E&D Waiver is approved for a maximum of 15,000 beneficiaries 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 E&D 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). Completed applications should be mailed to one’s Medicaid District Office. Applicants will be contacted by a Medicaid caseworker for an interview following the receipt of application.

Learn more about the E&D Waiver here, and 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 and Alabama Department of Senior Services (ADSS) administer the E&D Medicaid Waiver, and 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.

 What are 1915(c) HCBS Medicaid Waivers?
Historically Medicaid only paid for long-term care in nursing homes. 1915(c) HCBS Medicaid Waivers allow states to offer benefits outside of these institutions. “HCBS” stands for Home and Community Based Services. The goal of HCBS is to delay or prevent institutionalization, and to that end, care may be provided in one’s home, the home of a relative, assisted living, or adult foster care / adult family living. Waivers can target specific groups who require a Nursing Home Level of Care and are at risk of institutionalization, such as the elderly, disabled, or persons with Alzheimer’s. Waivers are not entitlements. This means that meeting eligibility criteria does not guarantee receipt of benefits, as there are a limited number of slots for program participants.

 

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