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

Last updated: December 06, 2021

 

Arkansas Medicaid Definition

In Arkansas, the Arkansas Department of Human Services’ (DHS) Division of Medical Services (DMS) is the agency that administers the state’s Medicaid program.

Medicaid is a wide-ranging, jointly funded state and federal health care program for low-income individuals of all ages. While there are several different Medicaid eligibility groups, the focus of this page is eligibility for elderly Arkansas residents, aged 65 and over. Specifically, long term care is covered. In addition to care services in nursing homes, adult foster care homes / adult family homes, and assisted living facilities, AR Medicaid pays for non-medical services and supports to help frail seniors remain living at home.

  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 Arkansas seniors may be eligible. These programs have varying financial and medical (functional) eligibility requirements, as well as benefits. Further complicating eligibility are the facts that the criteria vary with marital status and that Arkansas offers several pathways towards eligibility.

1) Institutional / Nursing Home Medicaid – This is an entitlement program; Anyone who is eligible will receive assistance. Care is provided only in nursing home facilities.

2) Medicaid Waivers / Home and Community Based Services (HCBS) – This is not an entitlement program; There are a limited number of participant slots and wait lists may exist. Intended to delay nursing home admissions, services are provided at home, adult day care, an adult family home, or in assisted living. More on Waivers here.

3) Regular Medicaid / Aged Blind and Disabled (AABD) – This is an entitlement program; Anyone who meets the requirements is able to receive benefits. Various long-term care services, such as personal care assistance or adult day care, may be available.

The table below provides a quick reference to allow seniors to determine if they might be immediately eligible for long term care from an Arkansas Medicaid program. Alternatively, one can take the Medicaid Eligibility Test.  IMPORTANT: Not meeting all of the criteria below does not mean one is ineligible or cannot become eligible for Medicaid. More.

2022 Arkansas 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 $2,523 / month* $2,000 Nursing Home $2,523 / month for each spouse* $3,000 Nursing Home $2,523 / month for applicant* $2,000 for applicant & $137,400 for non-applicant Nursing Home
Medicaid Waivers / Home and Community Based Services $2,523 / month $2,000 Nursing Home $2,523 / month for each spouse $3,000 Nursing Home $2,523 / month for applicant $2,000 for applicant & $137,400 for non-applicant Nursing Home
Regular Medicaid / Aged Blind and Disabled $841 / month $2,000 Help with ADLs $1,261 / month $3,000 Help with ADLs $1,261 / month $3,000 Help with ADLs
*All of a beneficiary’s monthly income, with the exception of a personal needs allowance of $40 / month, Medicare premiums, and possibly a monthly maintenance needs allowance for a non-applicant spouse, must be paid to the nursing home.

 

What Defines “Income”

Any income that a Medicaid applicant receives is counted towards the income limit. This income can come from any source and includes cash from family and friends, employment wages, alimony payments, pension payments, annuity payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. Veteran’s benefits, with the exception of VA Aid and Attendance, also count as income. Holocaust restitution payments and Covid-19 stimulus checks are not considered income and do not impact Medicaid eligibility.

When only one spouse of a married couple is applying for nursing home Medicaid or a Medicaid waiver, only the income of the applicant is counted. This is often referred to as the “name on the check rule” and means that the income belongs to the person whose name is on the check. Therefore, a non-applicant spouse’s income is disregarded. However, the non-applicant spouse (also called a community spouse) may be entitled to a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their applicant spouse. The MMMNA is the minimum amount of income a non-applicant spouse is said to require to avoid spousal impoverishment. The MMMNA is $2,288.75 (effective 7/1/22 – 6/30/23). If a non-applicant’s monthly income is under $2,288.75, income can be transferred from their applicant spouse, bringing their income up to this level.

In Arkansas, a non-applicant spouse can further increase their spousal income allowance if their housing and utility costs exceed a “shelter standard” of $686.63 / month (effective 7/1/22 – 6/30/23). However, in 2022, in no case can a spousal income allowance put a non-applicant’s monthly income over $3,435. This is the Maximum Monthly Maintenance Needs Allowance. Learn more about how the spousal allowance is calculated.

In addition to providing spousal support, the monthly maintenance needs allowance is effective in lowering the applicant’s countable income for eligibility purposes.

Income is counted differently when only one spouse applies for regular AABD Medicaid; The income of both the applicant spouse and the non-applicant spouse is calculated towards the applicant’s income eligibility. More about how Medicaid counts income.

 

What Defines “Assets”

Countable assets are assets that can easily be converted to cash to help cover the cost of long-term care and include the following: Cash, stocks, bonds, investments, credit union, savings, and checking accounts, pension funds, and real estate in which one does not reside. However, there are many assets that are exempt, or said another way, not counted towards the asset limit. Exemptions include personal belongings, household goods / furnishings, an automobile, life insurance policies without a cash surrender value, burial spaces, irrevocable burial plans, and generally one’s primary home. For the home to be exempt, the Medicaid applicant must live in it or have “intent to return” and have a home equity interest under $636,000 (in 2022). Equity interest is the value of the home, minus any outstanding debt, in which the Medicaid applicant owns. If a non-applicant spouse lives in the home, it is exempt regardless of where the applicant lives or the applicant spouse’s home equity interest. For seniors applying for regular Medicaid, there is no home equity limit.

 While one’s home is generally exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s estate recovery program. Following a long-term care Medicaid beneficiary’s death, the state Medicaid agency attempts reimbursement of care costs through whatever estate of the deceased still remains. This is often the home. Without proper planning strategies in place, the home will be used to reimburse Medicaid for providing care rather than going to family as inheritance.

All assets of a married couple are considered jointly owned regardless of the long-term care Medicaid program for which one is applying. However, the non-applicant spouse of a nursing home or waiver applicant is permitted a Community Spouse Resource Allowance (CSRA). In 2022, the community spouse (the non-applicant spouse) can retain 50% of the couples’ joint assets, up to a maximum of $137,400, as the chart indicates above. If the non-applicant’s half of the assets is under $27,480, 100% of the assets, up to $27,480 can be retained by the non-applicant.

Arkansas has a 60-month Medicaid Look-Back Period that immediately proceeds one’s Medicaid application date. During this time frame, Medicaid checks all past asset transfers to ensure no assets were sold or given away under fair market value. This includes asset transfers made by one’s spouse. The look back is intended to discourage persons from gifting assets to meet Medicaid’s asset limit. Violating the look-back period results in a penalty period of Medicaid ineligibility.

 Non-Financial Eligibility Requirements – For Arkansas Medicaid-funded long-term care, an applicant’s functional need is considered. For nursing home Medicaid and HCBS Medicaid Waivers, a nursing facility level of care (NFLOC) is required. Furthermore, there may be additional eligibility requirements for specific program benefits. As an example, for a Medicaid Waiver to cover the cost of home modifications, an inability to safely living independently without modifications may be required. For long-term care services via the regular Medicaid program, a functional need with the activities of daily living is required, but a NFLOC is not necessarily required. 

 

Qualifying When Over the Limits

Elderly AR residents (65 and over) who do not meet the eligibility requirements above can still qualify for Medicaid.

1) Medically Needy Pathway – Arkansas has a Spend Down Program for regular Medicaid / aged, blind or disabled for persons who have income over the Medicaid limit. This program allows persons to become income-eligible for Medicaid services by spending the majority of their income on medical bills. In 2022, the medically needy income limit in AR is $108.33 / month for a single applicant and $216.66 / month for a couple. The “spend-down” amount is the difference between one’s monthly income and the medically needy income limit. In AR, it is calculated for a 3-month period. Once the “spend down” is met, one will be Medicaid eligible for the remainder of the period. The medically needy asset limit is $2,000 for an individual and $3,000 for a couple. Learn more about the medically needy pathway.

2) Qualified Income Trusts (QIT’s) – Also called Miller Income Trusts (MIT’s), QITs offer a way for individuals over the Medicaid income limit to still qualify for nursing home Medicaid or a Medicaid waiver. For Medicaid eligibility purposes, monthly income put into an irrevocable QIT no longer counts as income. Irrevocable means the trust cannot be changed or cancelled. In very simple terms, income over the Medicaid limit is deposited into the trust in which a trustee has legal control. Funds can only be used for very specific purposes, such as paying medical expenses accrued by the Medicaid enrollee.

3) Asset Spend Down – Persons who have countable assets over AR Medicaid’s asset limit can “spend down” assets and become asset eligible. This can be done by spending “excess” assets on non-countable ones. Examples include making home modifications (i.e., addition of wheelchair ramps, stair lifts, walk-in showers) prepaying funeral and burial expenses, and paying off debt. Remember, assets cannot be gifted or sold under fair market value. Doing so violates the look back rule and can result in a penalty period of Medicaid ineligibility. It is recommended one keep documentation of how assets were spent as proof the look back rule was not violated.

4) 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 these persons, Medicaid planning exists. By working with a Medicaid planning professional, families can employ a variety of strategies to not only become Medicaid eligible, but also to protect their home from Medicaid’s estate recovery program.  Read more or connect with a Medicaid planner.

 

Specific Arkansas Medicaid Programs

1) Independent Choices (IC) Program – A self-directed option for elderly and disabled program participants of AR Choices in Homecare and Medicaid Personal Care. A monthly cash allowance is provided to use for personal care assistance, home modifications, assistive technologies, and personal emergency response systems.

2) AR Choices in Homecare Waiver – Supportive services for independent living are provided for seniors and physically disabled individuals. Attendant care services are available and can be self-directed. This means program participants can hire the caregiver of their choosing.

3) Living Choices Assisted Living Waiver (ALW) – While this program does not cover the cost of room and board in assisted living facilities, it does pay for personal care services. Other benefits may include medication oversight, non-medical transportation, and nursing evaluations.

4) Medicaid Personal Care – Assistance with activities of daily living, such as bathing, dressing / undressing, grooming, and eating, are available via the Arkansas state Medicaid plan. Program participants may live at home or in an assisted living facility.

5) Program of All-Inclusive Care for the Elderly (PACE) – Combines the benefits of Medicaid, including long-term care, and Medicare into a single program.

 

How to Apply for Arkansas Medicaid

For more information, or to apply for any of the Medicaid programs listed above, persons should contact their local Department of Human Services (DHS) Office. To find your local office, click here. Alternatively, persons can contact the state DHS office at 501-682-1001. One’s local Area Agency on Aging office may also be of assistance. Unfortunately, at the time of this writing, persons cannot apply online for these programs.

To learn more about applying for Medicaid long term care, click here.

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