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

Arkansas Medicaid Long-Term Care Definition

Medicaid is a health care program for low-income individuals of all ages. While there are varying coverage groups, our focus is on long term care Medicaid eligibility for elderly Arkansas residents, aged 65 and over. 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. There are three categories of Medicaid long-term care programs for which Arkansas seniors may be eligible.

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

2) Medicaid Waivers / Home and Community Based Services (HCBS) – Not an entitlement; 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.

3) Regular Medicaid / Aged Blind and Disabled (AABD) – An entitlement; 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.

Medicaid in Arkansas is also called Health Care. While it is a state and federal funded program, it is administered by the state under federally set parameters. The Arkansas Department of Human Services’ (DHS) Division of Medical Services (DMS) is the administering agency.

Income & Asset Limits for Eligibility

Each of the three Medicaid long-term care programs have differing financial and medical eligibility criteria. Further complicating financial eligibility is that the requirements change annually, vary based on marital status, and Arkansas offers alternative pathways towards eligibility.

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 does not mean one is ineligible or cannot become eligible for Medicaid. More.

Countable vs. Non-Countable Income
Nearly all income received is counted towards the income limit. This 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. Nationally, Holocaust restitution payments are not counted as income. Furthermore, in AR, the VA Aid and Attendance, which is above and beyond the Basic VA Pension, does not count.

Treatment of Income for a Couple
When only one spouse of a married couple applies for Nursing Home Medicaid or a Medicaid Waiver, the income of the non-applicant spouse (also called a community spouse) is disregarded. This means their income does not impact their applicant spouse’s income-eligibility. Furthermore, the non-applicant spouse is entitled to a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their applicant spouse. The MMMNA is the minimum amount of monthly income a non-applicant spouse is said to require to avoid impoverishment.

Effective 7/1/24 – 6/30/25, the MMMNA is $2,555. If a non-applicant spouse’s income is under $2,555 / month, income can be transferred to them 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 $766.50 / month (eff. 7/1/24 – 6/30/25). However, in 2025, a Spousal Income Allowance cannot push a non-applicant’s monthly income over $3,948. This is the Maximum Monthly Maintenance Needs Allowance. More on how this allowance is calculated.

Income is counted differently when only one spouse applies for Regular Medicaid / Aged Blind and Disabled; the income of both the applicant and non-applicant spouse is calculated towards the applicant’s income eligibility. There is no Minimum Monthly Maintenance Needs Allowance for the non-applicant spouse. More on how Medicaid counts income.

Asset Definition & Exceptions

Countable vs. Non-Countable Assets
Countable assets (non-exempt assets) are calculated towards Medicaid’s asset limit. This includes cash, stocks, bonds, investments, bank accounts (credit union, savings, and checking), pension funds, and real estate in which one does not reside. In Arkansas, IRA’s and 401K’s are counted. There are also many assets that are non-countable; they are exempt from the asset limit. This includes 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.

Treatment of Assets for a Couple
All assets of a married couple are considered jointly owned (regardless of the long-term care Medicaid program for which one or both spouses is applying). There is, however, a Community Spouse Resource Allowance (CSRA) that protects a larger amount of a couple’s assets for a non-applicant spouse of a Nursing Home Medicaid or Medicaid Waiver applicant. This is intended to prevent a non-applicant spouse from becoming impoverished, and in 2025, allows that spouse to keep 50% of the couple’s assets, up to a maximum of $157,920. If 50% of the couple’s assets falls under $31,584, the non-applicant spouse can keep all of their assets up to $31,584. Note: There is no CSRA for Regular Medicaid.

Medicaid’s Look-Back Rule
Arkansas has a 60-month Medicaid Look-Back Period for Nursing Home Medicaid and Medicaid Waivers that immediately precedes the date of application. During the “look-back”, Medicaid checks all asset transfers made by the applicant and their spouse to ensure none were gifted (including selling an asset for under fair market value). The Look-Back Rule is meant to discourage persons from gifting assets to meet Medicaid’s asset limit. Violations are penalized with a Penalty Period of Medicaid ineligibility. Note: The Look-Back Rule does not apply to Regular Medicaid.

The U.S. Federal Gift Tax Rule does not extend to Medicaid eligibility. This rule, in 2025, allows individuals to gift up to $19,000 per recipient without filing a Gift Tax Return. Gifting under this rule violates Medicaid’s 5-year Look-Back Period.

Arkansas Medicaid Home Exemption Rules

For the home to be exempt, the Medicaid applicant or their spouse must live in it. If there is no spouse in the home, there is a home equity interest limit of $730,000 (in 2025). Home equity is the value of the home, minus any outstanding debt against it. Equity interest is the amount of the home’s equity that is owned by the applicant. Furthermore, if neither the Medicaid applicant nor their spouse live in the home, the applicant must have “Intent to Return”. Note: There is no home equity interest limit for Regular Medicaid. Other exemptions exist.

While one’s home is generally exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s Estate Recovery Program (MERP). Following the death of a long-term care Medicaid beneficiary, AR’s 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.

Medical / Functional Need Requirements

An applicant must have a medical need for long-term care Medicaid. For Nursing Home Medicaid and Medicaid Waivers, a Nursing Facility Level of Care (NFLOC) is required. Furthermore, certain benefits may have additional eligibility requirements specific to that particular benefit. For example, for home modifications to be covered under a waiver, an inability to safety live independently without modifications may be required. For long-term care services via the Regular Medicaid program, a functional need with Activities of Daily Living is required, but a NFLOC is not necessarily required.

Qualifying When Over the Limits

It is possible for elderly AR residents (aged 65 and over) who do not meet the financial eligibility requirements above to 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 income limit. This allows persons to become income-eligible for Medicaid services by spending the majority of their income on medical expenses. In 2025, the medically needy income limit (MNIL) 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 MNIL. In AR, it is calculated for a 3-month period. Once the “spend down” is met, one is 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.

2) Qualified Income Trusts (QIT’s) – Also called Miller Income Trusts (MIT’s), or in Arkansas, Income Trusts, these trusts allow Nursing Home Medicaid and Medicaid Waiver applicants with income over Medicaid’s limit to still become income-eligible. Monthly income put into an irrevocable QIT is not counted as income by AR Medicaid. “Irrevocable” means that the terms of the trust cannot can changed or cancelled. Overly simplified, a trustee has legal control of the trust funds, and the Medicaid applicant is no longer considered the owner. There are very strict rules as to how money in the trust can be spent. For instance, one allowable expense is paying for 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” excess assets on non-countable ones to become asset-eligible. This includes 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 within 60-months of application for Nursing Home Medicaid or home and community based services via a Medicaid Waiver. Violating the Look-Back Rule results in a Penalty Period of Medicaid ineligibility. It is recommended one keep documentation of how assets were spent as proof this rule was not violated.

4) Medicaid Planning – The majority of persons considering Medicaid are “over-income” and / or “over-asset”, but they 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.   Connect with a Medicaid Planner.

Specific Arkansas Medicaid Programs

In addition to paying for nursing home care, Arkansas Medicaid offers the following programs that assist elderly individuals in living at home or in the community.

1) ARChoices in Homecare Waiver – Supportive services and goods for independent living are provided for seniors and adults with physical disabilities. This includes adult day care, meal delivery, home modifications, personal emergency response systems, and attendant care services. Program participants can receive a cash allowance with which to self-direct their own care via a program option called Independent Choices (IC). This allows one to hire the caregiver of their choosing, including select relatives.

2) 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 include medication oversight, non-medical transportation, and nursing evaluations.

3) Medicaid State Plan Personal Care – Assistance with daily living activities is provided. This includes bathing, dressing / undressing, grooming, eating, meal preparation, housekeeping, and grocery shopping. Care can be participant-directed via a cash allowance through the Independent Choices option. This allows persons to hire the caregiver of their choice, with the exception of a spouse or legal guardian. Program participants may live at home, an assisted living facility, or a residential care facility.

4) Program of All-Inclusive Care for the Elderly (PACE) – Combines the benefits of Medicaid, including long-term care, and Medicare into a single program. Additional benefits, such as dental and eye care, may be available.

5) Money Follows the Person (MFP) – This federal program helps institutionalized persons who are eligible for Medicaid to transition back home or into the community.

How to Apply for Arkansas Medicaid

Seniors can apply for AR Medicaid online at Access Arkansas, in-person at their local Department of Human Services (DHS) Office, or by mail. The Arkansas Department of Human Services Application for SNAP, Health Care, and TEA / RCA Benefits can be found here. For more information or for application assistance, one can contact their local DHS office or the state DHS office at 501-682-1001. One’s local Area Agency on Aging office may also be helpful in answering questions or offering application assistance. The application process may vary based on the program for which one is applying.

Arkansas Medicaid applicants should be certain that all eligibility requirements are met prior to applying for benefits. For seniors who have income and / or asset(s) greater than the allowable amounts, Medicaid Planning can be invaluable. Furthermore, the application process is complicated and assistance with the process may be welcomed. Familiarizing oneself with general information about applying for long-term care Medicaid can be helpful.