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

Last updated: June 23, 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 a several different eligibility groups, the focus of this page is strictly on Medicaid eligibility for elderly Arkansas residents, aged 65 and over. In addition, the focal point will be specifically on Medicaid for long term care, whether that is at home, in a nursing home, in an adult foster care home (adult family 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 Arkansas 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 criteria vary with marital status and that Arkansas offers several pathways towards eligibility.

1) Institutional / Nursing Home Medicaid – this is an entitlement (anyone who is eligible will receive assistance) program & is provided only in nursing home facilities.
2) Medicaid Waivers / Home and Community Based Services (HCBS) – there are a limited number of participant slots, which means wait lists may exist. 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 (anyone who meets the requirements is able to receive benefits) program. Services are available at home or adult day care.

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 not eligible or cannot become eligible for Medicaid. More.

2021 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 $2,382 / month** $2,000 Nursing Home $4,764 / month (each spouse is allowed up to $2,382)** $3,000 Nursing Home $2,382 / month for applicant** $2,000 for applicant & $130,380 for non-applicant Nursing Home
Medicaid Waivers / Home and Community Based Services $2,382 / month $2,000 Nursing Home $4,764 / month (each spouse is allowed up to $2,382) $3,000 Nursing Home $2,382 / month for applicant $2,000 for applicant & $130,380 for non-applicant Nursing Home
Regular Medicaid / Aged Blind and Disabled $794 / month $2,000 None $1,191 / month $3,000 None $1,191 / month $3,000 None
What Defines “Income”

For Medicaid eligibility purposes, any income that a Medicaid applicant receives is counted towards the income limit. To clarify, this income can come from any source. Examples include cash from family and friends, Veteran’s benefits (with the exception of VA Aid and Attendance, which is not counted as income), employment wages, alimony payments, pension payments, annuity payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. Covid-19 stimulus checks (both previous and subsequent payments) do not count as income and have no impact on Medicaid eligibility.

When only one spouse of a married couple is applying for nursing home Medicaid or home and community based services via 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. To be clear, income is not calculated separately for a couple with just one spouse applying for aged, blind and disabled Medicaid. Stated differently, in this case, a non-applicant spouse’s income is considered in the income eligibility of the applicant spouse. For more information about how Medicaid counts income, click here.

Also relevant for married couples with just one spouse applying for Medicaid nursing home care or a HCBS Medicaid waiver is a Minimum Monthly Maintenance Needs Allowance (MMMNA). This is an income allowance and is the minimum amount of monthly income to which the non-applicant spouse is entitled. As of July 1, 2021, this figure is $2,177.50 / month and will increase again July 1, 2022. Simply put, if the non-applicant spouse’s monthly income is under $2,177.50, the applicant spouse can transfer some of his or her income to bring the non-applicant spouse’s income to this level. Based on shelter and utility costs, a community spouse may be entitled to an even greater amount of monthly income, up to $3,259.50 / month. (This figure is effective 1/1/21 and will be effective until the following January). This spousal allowance rule not only allows the Medicaid applicant to transfer income to the non-applicant spouse to ensure he or she has sufficient funds with which to live, but also is effective in lowering the applicant’s countable income for eligibility purposes. Please note that this income allowance does not apply to married couples with just one spouse applying for aged, blind and disabled Medicaid.

**Although the income limit for nursing home Medicaid is $2,382 / month (in 2021), all of a beneficiary’s monthly income, with the exception of a personal needs allowance of approximately $40 / month, and possibly a monthly maintenance needs allowance for a non-applicant spouse, must be paid to the nursing home.


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, for Medicaid eligibility purposes, there are many assets that are considered exempt, or said another way, are 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 one’s primary home, given the Medicaid applicant lives in it or has “intent” to return to it, and his / her equity interest is not greater than $603,000 (in 2021). (Equity interest is the value of the home in which the Medicaid applicant owns). When a non-applicant spouse lives in the home, it is exempt regardless of where the applicant lives or the applicant spouse’s equity interest in it.

For married couples, as of 2021, the community spouse (the non-applicant spouse, also called the well spouse) can retain half of the couples’ joint assets, up to a maximum of $130,380, as the chart indicates above. That said, the community spouse is able to keep 100% of the assets up to $26,076.  This, in Medicaid speak, is known as the Community Spouse Resource Allowance (CSRA). As with the monthly maintenance needs allowance, this rule only applies to married couples with one spouse applying for institutional Medicaid or a home and community based services Medicaid Waiver.

One should be aware that Arkansas has a Medicaid Look-Back Period. This is a period of 60 months (5 years) that proceeds one’s Medicaid application date. During this time frame, Medicaid checks all past asset transfers (including asset transfers made by one’s spouse) to ensure no assets were sold or given away under fair market value. This is done so one does not give away assets in order to meet Medicaid’s asset limit. If one is found to be in violation of the look-back period, a penalty period of Medicaid ineligibility will result.

 For Medicaid long-term care eligibility, an applicant’s functional need is also a consideration. For nursing home Medicaid and many HCBS Medicaid Waivers, an applicant must require a nursing facility level of care (NFLOC). Furthermore, some program benefits may have additional eligibility requirements specific to the particular benefit. As an example, even if one is eligible for a Medicaid Waiver that offers home modifications as a benefit, a needs assessment might be required to demonstrate home modifications would be beneficial for the individual.


Qualifying When Over the Limits

For Arkansas 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) Medically Needy Pathway – In Arkansas, there is a Spend Down Program that is specifically intended for those that are categorically aged, blind or disabled that have income over the Medicaid limit. In a nutshell, one may still be eligible for Medicaid services even if they are over the income limit by paying their excess income (the income over the Medicaid income limit) on medical bills. Once one has met their “spend-down” for the spend-down period (paid their excess income down to the medically needy income limit), one will receive Medicaid benefits for the remainder of the spend-down period. (The spend down period is 3 months). Please note, the spend-down income limit is different than the aged, blind and disabled income limit in the above chart. As of January of 2020, for a single applicant, the income limit for medically needy eligibility is $108.33 / month, and for a married couple, the income limit is $216.66.

2) Qualified Income Trusts (QIT’s) – QIT’s, which are also called Miller Income Trusts (MIT’s) offer a way for individuals over the Medicaid income limit to still qualify for nursing home Medicaid or a Medicaid waiver. This is because money deposited into a QIT is not considered income when it comes to Medicaid eligibility. In very simple terms, income over the Medicaid’s limit is deposited into a trust, and a trustee is named, giving that individual legal control of the money. The QIT must be irreversible, meaning once it has been created, it cannot be changed or canceled. The money in the account can only be used for very specific purposes, such as paying medical expenses accrued by the Medicaid enrollee.

Make note, the Spend Down Program and Qualified Income Trust options do not assist one in reducing extra assets for Medicaid qualification. Said another way, if one meets the income requirements for Medicaid eligibility, but not the asset requirement, the above courses of action cannot assist one in “spending down” extra assets.

However, one can “spend down” assets by spending excess assets on non-countable ones, such as home modifications (addition of wheelchair ramps, stair lifts, walk-in showers, etc.), prepaying funeral and burial expenses, and paying off debt. As mentioned above, it’s important that one does not give away assets or sell them way under market value. Doing so can result in a penalty period of Medicaid ineligibility.

3) 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 and 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. Via this option, a cash allowance is provided on a monthly basis to use for personal care assistance, home modifications, assistive technologies, and personal emergency response systems.

2. AR Choices in Homecare Waiver – Intended to delay and prevent nursing home placements, supportive services for independent living are provided for seniors and physically disabled individuals. Attendant care services are available and can be self-directed, meaning program participants can hire the caregiver of their choosing. Learn more here.

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 cover the cost of personal care services. Other benefits may include medication oversight, non-medical transportation, and nursing evaluations. Click here for additional information.

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.


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. Persons can also contact the state DHS office at 501-682-1001. Unfortunately, at the time of this writing, persons cannot apply online for these programs. Persons can also contact their local Area Agency on Aging office for assistance.

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

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