Alabama Medicaid Eligibility for Long Term Care: Income & Asset Limits

Last updated: May 16, 2018

Alabama Medicaid Definition

Medicaid is a wide-ranging health insurance program for low-income individuals of all ages. Jointly funded by the state and federal government, it provides health coverage for diverse groups of Alabama residents, including pregnant women, parents and caretaker relatives, adults with no dependent children, disabled individuals, and seniors. However, this page is focused strictly on Medicaid eligibility for Alabama elders, aged 65 and over, and specifically for long term care, whether that be at home, in a nursing home, or in an assisted living facility.

  The American Council on Aging now offers a free, quick and easy Medicaid eligibility test for seniors.

 

Income & Asset Limits for Eligibility

There are several different Medicaid long-term care programs for which Alabama seniors may be eligible. These programs have slightly different financial and medical (functional) eligibility requirements, as well as varying benefits. Further complicating eligibility are the facts that the requirements vary with marital status and that Alabama offers multiple pathways towards Medicaid eligibility.
1) Institutional / Nursing Home Medicaid – this is an entitlement program. This means anyone who meets the requirements will receive assistance, which is provided only in nursing home facilities.
2) Medicaid Waivers / Home and Community Based Services (HCBS) – with these programs, there are a limited number of enrollment slots. Therefore, wait lists may exist. Benefits are provided at home, adult day care, or in assisted living.
3) Regular Medicaid / Elderly and Disabled – this is an entitlement program and is provided at home or adult day care.
The table below provides a quick reference to allow Alabama seniors to determine if they might be immediately eligible for long term care from a Medicaid program. Alternatively, take the Medicaid Eligibility TestIMPORTANT, not meeting all the criteria below does not mean one is not eligible or cannot become eligible. More.

2018 Alabama Medicaid Long Term Care Eligibility for Seniors
Type of Medicaid Single Married (both spouses applying) Married (one spouse applying)
Income Limit Asset Limit Level of Care Required Income Limit Asset Limit Level of Care Required Income Limit Asset Limit Level of Care Required
Institutional / Nursing Home Medicaid $2,250 / month $2,000 Nursing Home $3,375 / month $3,000 Nursing Home $2,250 / month for applicant $2,000 for applicant & $123,600 for non-applicant Nursing Home
Medicaid Waivers / Home and Community Based Services $2,250 / month $2,000 Nursing Home $4,500 / month $3,000 Nursing Home $2,250 / month for applicant $2,000 for applicant & $123,600 for non-applicant Nursing Home
Regular Medicaid / Aged Blind and Disabled $750 / month $2,000 None $1,125/ month $3,000 None $750 / month $2,000 None
What Defines “Income”

For Medicaid eligibility purposes, any income that a Medicaid applicant receives is counted. To clarify, this income can come from any source. Examples include employment wages, alimony payments, railroad retirement, black lung, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. However, when only one spouse of a married couple is applying for Medicaid, only the income of the applicant is counted. Said another way, the income of the non-applicant spouse is disregarded. For married couples, with non-applicant spouses’ with insufficient income in which to live, there is what is called a Minimum Monthly Maintenance Needs Allowance (MMMNA). This rule is intended to insure non-applicant spouses have sufficient income in which to live. Basically, if the non-applicant spouse, also called a community spouse or well spouse, has income under $2,030 / month (as of 2018), he or she is entitled to a portion of the applicant spouse’s income. If the well spouse has income equivalent to $2,030 / month or income in excess of this amount, the applicant spouse cannot allocate any money to the non-applicant spouse.

 

What Defines “Assets”

Countable assets include cash, stocks, bonds, investments, promissory notes, credit union, savings, and checking accounts, and real estate in which one does not reside. However, for Medicaid eligibility, there are many assets that are not counted. In other words, they are exempt. Exemptions include personal belongings, such as clothing, household furnishings, an automobile, burial funds (limited to $5,000 in 2018), and one’s primary home, given the Medicaid applicant or their spouse lives in the home and the equity value is under $572,000 (in 2018). For married couples, as of 2018, the community spouse can retain up to a maximum of $123,600 of the couple’s joint assets, as the chart indicates above. This is referred to as the Community Spouse Resource Allowance (CSRA).

It is vital that one does not give away assets or sell them for less than fair market value in an attempt to meet Medicaid’s asset limit. This is because Alabama has a Medicaid Look-Back Period, which is a period of 60 months (5 years) that dates back from one’s Medicaid application date. During this time frame, Medicaid checks all past transfers to ensure no assets were sold or given away for less than they are worth. If one is found to be in violation of the look-back period, one will be ineligible for Medicaid for a period of time.

 

Qualifying When Over the Limits

For Alabama elderly residents (65 and over), who do not meet the eligibility requirements in the table above, there are other ways to qualify for Medicaid.

1) Qualified Income Trusts (QIT’s) – QIT’s, also referred to as Miller Trusts or Qualifying Income Trusts, are for Medicaid applicants who are over the income limit, but still cannot afford to pay their cost of long-term care. This type of trust offers a way for Alabama residents over the Medicaid income limit to still qualify for long-term care Medicaid, as money deposited into a QIT does not count towards Medicaid’s income limit. In simple terms, one’s excess income (over the Medicaid limit) is directly deposited into a trust, in which a trustee is named, giving that individual legal control of the money. The account must be irreversible, meaning once it has been established, it cannot be changed or canceled, and must have the state of Alabama Medicaid authorities listed as the remainder beneficiary. In addition, the money in the account can only be used for very specific purposes, such as paying long term care services / medical expenses accrued by the Medicaid enrollee. As previously stated, the income in this account is exempt from Medicaid’s income limit.

Unfortunately, Income Only Trusts do not assist one with extra assets in qualifying for Medicaid. Said another way, if one meets the income requirements for Medicaid eligibility, but not the asset requirement, the above option cannot assist one in reducing their extra assets. However, one can “spend down” assets by spending excess assets on non-countable assets, such as home modifications (addition of a first floor bedroom, wheelchair ramps, roll-in showers, pedestal sinks, and stair lifts), vehicle modifications (wheelchair lifts, adaptive control devices, and floor modifications to allow one to drive from a wheelchair), prepaying funeral and burial expenses, and paying off debt.

2) Medicaid Planning – the majority of persons considering Medicaid are “over-income” or “over-asset” or both, but still cannot afford their cost of care.  For persons in this situation, Medicaid planning exists. By working with a Medicaid planning professional, families can employ a variety of strategies to help them become Medicaid eligible. Read more or connect with a Medicaid planner.

 

Specific Alabama Medicaid Programs

1. Alabama Elderly and Disabled Waiver (E & D) – Assists seniors in living in the community by providing benefits that promote independent living, such as meal delivery, homemaker services, personal care assistance, and adult day health. Wait lists may exist.

2. Alabama Personal Choices (PC) – Allows elderly individuals receiving services via a HCBS Medicaid Waiver to self-direct their own care services. Participants are able to hire, train, manage, and even fire, their own caregivers.

3. Alabama SAIL Waiver – Intended to delay or prevent nursing home placement, or assist with the transition of institutionalization back into the community, of disabled individuals and seniors who meet the medical qualification. Home modifications, assistive technology, personal assistance, and other benefits are available.

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