Alabama Medicaid Long Term Care Programs, Benefits & Eligibility Requirements

Summary
Medicaid’s rules, benefits and even its name can all vary by state. This article focuses on Alabama Medicaid Long Term Care for seniors, which is run by the Alabama Medicaid Agency and will help pay for care in nursing homes, recipients’ homes and adult foster care homes through one of three programs – Nursing Home Medicaid, HCBS Waivers or ABD Medicaid. These programs are different from the regular Medicaid that is for financially limited people of all ages.

Alabama Medicaid Long Term Care Programs

Nursing Home / Institutional Medicaid

Alabama Nursing Home Medicaid will cover the cost of long-term care in a nursing home for financially limited Alabama residents who require a Nursing Facility Level of Care. Coverage includes payment for room and board, as well as all necessary medical and non-medical goods and services, such as:

• Personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting)
• Skilled nursing care
• Physician’s visits
• Prescription medication
• Medication management
• Mental health counseling
• Social activities

Items not covered include a private room, specialized food, comfort items not considered routine (tobacco, sweets and cosmetics, for example) and any care services not considered medically necessary.

Alabama Nursing Home Medicaid beneficiaries are required to give most of their income to the state to help cover nursing home costs. They are allowed to keep a “personal needs allowance” (PNA) of $30/month, which can be spent on personal items such as clothes, snacks, books, haircuts, flowers, etc. They can also keep enough of their income to make Medicare premium payments if they are dual eligible, and enough to make any Medicaid-approved spousal income allowance payments to financially needy spouses who are not Medicaid applicants or recipients.

Alabama Nursing Home Medicaid is an entitlement, which means all eligible applicants are guaranteed by law to receive benefits without wait. However, not all nursing homes accept Medicaid, and those that do may not have any available spaces when you or your loved one needs care. So, eligible applicants are guaranteed nursing home coverage without wait, but they are not guaranteed coverage in any facility they choose.

Home and Community Based Services (HCBS) Waivers

Home and Community Based Services (HCBS) Waivers will pay for long-term care services and supports that help Alabama Medicaid recipients who require a Nursing Facility Level of Care remain living in the community instead of living in a nursing home. The word “waiver” means something like “voucher” in this instance. Think of it as a voucher that will pay for long-term care services for Alabama residents who live in their home, the home of a loved one or an adult foster care home. While Alabama’s HCBS Waivers will cover some long-term care services and supports in those settings, they will not cover room and board costs such as mortgage payments, rent, utility bills and food expenses.

The HCBS Waivers relevant to Alabama seniors are the Elderly & Disabled Waiver and the Alabama Community Transition Waiver.

Elderly & Disabled (E&D) Waiver
Alabama’s Elderly & Disabled (E&D) Waiver covers long-term care services and supports that help Alabama seniors (age 65 and over) who require a Nursing Facility Level of Care remain living in the community instead. E&D Waiver recipients can live in their own home, the home of a family member or an adult foster care home. However, the state may deny E&D Waiver applicants who live in adult foster care for several reasons including overall cost vs. nursing home, unsuitable conditions or an uncooperative participant.

E&D Waiver benefits include adult day care, case management, meal delivery, housekeeping services and personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting). These benefits can be provided by licensed caregivers, and program participants have the option to self-direct some of their E&D benefits through the Personal Choice Program. This allows E&D Waiver recipients to hire and pay family members as caregivers, including spouses.

Unlike Nursing Home Medicaid, Alabama’s E&D Waiver is not an entitlement. Instead, there are a limited number of enrollment spots (roughly 15,000 per year as of 2024), and once those spots are full additional applicants are placed on a waitlist.

Alabama Community Transition (ACT) Waiver
The Alabama Community Transition (ACT) Waiver provides long-term care services and supports to Alabama nursing home residents who require a Nursing Facility Level of Care and are living in a Medicaid-approved nursing home, but wish to return to living in the community. The ACT Waiver will assist in the transition from a nursing home to one’s own home or the home of a family member, but not into an adult foster care home or an assisted living residence.

Depending on the beneficiary’s needs and circumstances, the ACT Waiver can help cover moving expenses and provide long-term care services and supports in the beneficiary’s new residence. ACT Waiver benefits can include adult day care, assistive technology, meal delivery, home modifications, housekeeping services, Personal Emergency Response Systems and personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting).

ACT Waiver benefits can be provided by licensed caregivers, and program participants have the option to self-direct some of their benefits through the Personal Choice Program. This allows ACT Waiver recipients to hire and pay family members as caregivers, including spouses.

The ACT Waiver has a limited number of enrollment spots (675 per year as of 2024). Once those spots are full, additional applicants will be placed on a waitlist.

Aged, Blind, and Disabled Medicaid

Alabama’s Aged, Blind, and Disabled (ABD) Medicaid provides basic healthcare coverage and long-term care goods and services to Alabama residents who are aged (65 and older), blind or disabled and live in the community. ABD Medicaid can sometimes be referred to as state Medicaid or regular Medicaid for seniors, but it should not be confused with the regular Medicaid that is available to financially needy people of all ages. ABD Medicaid is an entitlement, which means that anyone who meets the requirements is guaranteed by law to receive the benefits without any wait.

1. ABD Long Term Care Benefits
Alabama ABD Medicaid will cover long-term care benefits for seniors who show a medical need for those benefits, which can include in-home personal care, adult day care, home modifications and Personal Emergency Response Systems (PERS). ABD Medicaid recipients qualify for these benefits one at a time. This is different from Nursing Home Medicaid, which makes all of its services immediately available for anyone who qualifies. Instead, ABD Medicaid recipients will be evaluated by the state to determine what kind of long-term care benefits they need and will receive.

2. Living Independence for the Elderly (LIFE)
Alabama residents who are age 55 or older and have ABD Medicaid can cover their medical, social service and long-term care needs with one comprehensive plan and delivery system using the Living Independence for the Elderly (LIFE) program. LIFE program participants are required to need a Nursing Facility Level of Care, but they must live in the community. Alabama LIFE will coordinate the care and benefits of Medicaid and Medicare for “dual eligible” seniors. LIFE also administers vision and dental care, and LIFE day centers provide meals, social activities, exercise programs and regular health checkups and services to program participants. The Alabama LIFE program, Mercy LIFE of Alabama, is located in Daphne. LIFE is also known as Program of All-Inclusive Care for the Elderly (PACE) in other states, and the term PACE is sometimes used in connection with Alabama’s LIFE program. To learn more about LIFE/PACE, click here.

Eligibility Criteria For Alabama Medicaid Long Term Care Programs

To be eligible for Alabama Medicaid, a person has to meet certain financial and functional (medical) requirements. The financial requirements vary by the applicant’s marital status, if their spouse is also applying for Medicaid, and what program they are applying for – Nursing Home Medicaid, Home and Community Based Services (HCBS) Waivers or Aged, Blind, and Disabled (ABD) Medicaid.

Alabama Nursing Home Medicaid Eligibility Criteria

Financial Requirements
Alabama residents have to meet an asset limit and an income limit in order to be financially eligible for nursing home coverage through Alabama Medicaid. For a single applicant in 2024, the asset limit is $2,000, which means they must have $2,000 or less in countable assets. Countable assets include bank accounts, retirement accounts, stocks, bonds, certificates of deposit, cash and any other assets that can be easily converted to cash. An applicant’s home does not always count as an asset (see the How Medicaid Treats the Home section below for more details), and there are other non-countable assets, like Irrevocable Funeral Trusts and Medicaid Compliant Annuities. To understand exactly how your assets might impact Medicaid eligibility, consult with a professional like a Certified Medicaid Planner.

The 2024 income limit for Alabama Nursing Home Medicaid for a single applicant is $2,829/month. Almost all income is counted – IRA payments, pension payments, Social Security benefits, property income, alimony, wages, salary, stock dividends, etc.  However, Alabama Nursing Home Medicaid recipients are required to give most of their income to the state to help cover the cost of care. They are only allowed to keep $30/month of their income as a “personal needs allowance,” plus enough to make Medicare premium payments if they are dual eligible.

For married applicants with both spouses applying, the 2024 asset limit for Alabama Nursing Home Medicaid is $2,000 per spouse, and the income limit is $2,829/month per spouse. For a married applicant with just one spouse applying, the 2024 asset limit is $2,000 for the applicant spouse and $154,140 for the non-applicant spouse, thanks to the Community Spouse Resource Allowance. The 2024 income limit is $2,829/month for the applicant, and the income of the non-applicant spouse is not counted. Married Alabama Nursing Home Medicaid recipients are also required to give most of their income to the state. They are allowed to keep $30/month as a personal needs allowance and enough to make Medicare premium payments. In addition, they are allowed to keep enough income to make any allowable spousal income allowance payments to financially needy spouses who are not enrolled in Medicaid.

Nursing Home Medicaid applicants are not allowed to simply give away their assets in order to meet their eligibility limit. To make sure they don’t, Medicaid uses the Look-Back Period. In most states, including Alabama, the Look-Back Period is 60 months (five years). This means the state will look back into the applicant’s financial history for the 60 months prior to their application date to see if they have given away any assets or sold them at less than fair market. If they have, their application will be denied and they will face a penalty period of ineligibility.

Functional Requirements
The functional, or medical, criteria for Nursing Home Medicaid in Alabama is needing a Nursing Facility Level of Care (NFLOC), which means the applicant requires the kind of full-time care normally associated with nursing homes. To determine if Medicaid applicants do require a NFLOC, the state uses the Alabama Home and Community Based Program Assessment (HCBS-1) form. This assessment takes into consideration the applicant’s ability to complete the Activities of Daily Living (mobility, bathing, dressing, eating, toileting) and the Instrumental Activities of Daily Living (such as shopping, cooking, cleaning and taking medications), as well as their cognitive ability.

Alabama Medicaid Home and Community Based Services (HCBS) Waivers Eligibility Criteria

Financial Requirements
Alabama residents have to meet an asset limit and an income limit in order to be financially eligible for Home and Community Based Services (HCBS) Waivers. For a single applicant in 2024, the asset limit for HCBS Waivers in Alabama is $2,000, which means they must have $2,000 or less in countable assets. Countable assets include bank accounts, retirement accounts, stocks, bonds, certificates of deposit, cash and any other assets that can be easily converted to cash. An applicant’s home does not always count as an asset (see the How Medicaid Treats the Home section below for more details), and there are other non-countable assets, like Irrevocable Funeral Trusts and Medicaid Compliant Annuities.

The 2024 income limit for HCBS Waivers in Alabama for a single applicant is $2,829/month. Almost all income is counted – IRA payments, pension payments, Social Security benefits, property income, alimony, wages, salary, stock dividends, etc. To understand exactly how your income or assets might impact Medicaid eligibility, consult with a professional like a Certified Medicaid Planner.

For married applicants with both spouses applying, the 2024 asset limit for HCBS Waivers in Alabama is $2,000 per spouse, and the income limit is $2,829/month per spouse. For a married applicant with just one spouse applying, the 2024 asset limit is $2,000 for the applicant spouse and $154,140 for the non-applicant spouse, thanks to the Community Spouse Resource Allowance. The 2024 income limit is $2,829/month for the applicant, and the income of the non-applicant spouse is not counted.

HCBS Waiver applicants are not allowed to simply give away their assets in order to meet their eligibility limit. To make sure they don’t, Medicaid uses the Look-Back Period. In most states, including Alabama, the Look-Back Period is 60 months (five years). This means the state will look back into the applicant’s financial history for the 60 months prior to their application date to see if they have given away any assets or sold them at less than fair market. If they have, their application will be denied and they will face a penalty period of ineligibility.

Functional Requirements
The functional, or medical, criteria for Home and Community Based Service (HCBS) Waivers through Alabama Medicaid is needing a Nursing Facility Level of Care (NFLOC), which means the applicant requires the kind of full-time care that is normally associated with a nursing home. To determine if the Nursing Facility Level of Care requirement is for HCBS Waivers, the state uses the Alabama Home and Community Based Program Assessment (HCBS-1) form. This assessment takes into consideration the applicant’s ability to complete the Activities of Daily Living (mobility, bathing, dressing, eating, toileting) and the Instrumental Activities of Daily Living (such as shopping, cooking, cleaning and taking medications), as well as their cognitive ability.

Alabama Aged, Blind, and Disabled Medicaid Eligibility Criteria

Financial Requirements
Alabama residents have to meet an asset limit and an income limit in order to be financially eligible for Aged, Blind, and Disabled (ABD) Medicaid. For a single applicant in 2024, the asset limit is $2,000, which means they must have $2,000 or less in countable assets. Countable assets include bank accounts, retirement accounts, stocks, bonds, certificates of deposit, cash and any other assets that can be easily converted to cash. An applicant’s home does not always count as an asset (see the How Medicaid Treats the Home section below for more details), and there are other non-countable assets, like Irrevocable Funeral Trusts and Medicaid Compliant Annuities.

The 2024 income limit for a single applicant is $963/month. Almost all income is counted – IRA payments, pension payments, Social Security benefits, property income, alimony, wages, salary, stock dividends, etc.

For married applicants, the 2024 asset limit for Alabama ABD Medicaid is a combined $3,000, and the income limit is a combined $1,435/month. These limits apply to married couples with both spouses applying and married couples with just one spouse applying.

The Look-Back Period does not apply to ABD Medicaid. However, ABD Medicaid applicants should be careful about Look-Back violations because they might eventually need Nursing Home Medicaid or HCBS Waivers, and those violations will make them ineligible for either of those programs.

Functional Requirements
The only functional requirement for receiving healthcare coverage through Alabama’s Aged, Blind, and Disabled (ABD) Medicaid is being aged (65 and over), blind or disabled. For ABD Medicaid applicants who require long-term care services and supports, Alabama Medicaid will conduct an assessment of their ability to perform the Activities of Daily Living (mobility, bathing, dressing, eating, toileting) and the Instrumental Activities of Daily Living (such as shopping, cooking, cleaning and taking medications) to determine what kind of long-term care benefits the applicant needs and the state will cover.

How Alabama Medicaid Treats the Home for Eligibility Purposes

One’s home is often their most valuable asset, and if counted toward Medicaid’s asset limit, it would likely cause them to be over the limit. However, in many situations the home is not counted against the asset limit:

• If the applicant lives in their home and the home equity interest (the portion of the home’s equity value that the applicant owns minus any outstanding mortgage/debt) is less than $713,000 (as of 2024) then the home is exempt.
• If the applicant’s spouse, minor child, or blind or disabled child of any age lives there, the home is exempt regardless of the applicant’s home equity interest, and regardless of where the applicant lives.
• If none of the above-mentioned people live in the home, the home can be exempt if the applicant/beneficiary files an “intent to return” home and the home equity interest is at or below $713,000.

These rules apply to all three types of Medicaid, with one important exception – ABD Medicaid applicants can disregard the home equity limit. Value does not matter regarding their home’s exempt status.

Alabama Nursing Home Medicaid applicants and recipients may also want to consider protecting their home (and other assets) from estate recovery. States are required by law to try and collect reimbursement for long-term care after the death of Medicaid recipients. They do this through their Medicaid Estate Recovery Programs (MERPs). The rules and regulations regarding estate recovery can vary greatly by state, but all states have a MERP. To learn more about Medicaid Estate Recovery in Alabama and how you can protect your home from it, click here, or you can contact a professional, like a Certified Medicaid Planner.

Medicaid Planning

Even if an Alabama resident doesn’t meet their financial limits for Medicaid eligibility, there are still ways they can qualify. If they are over their asset limit, they can reduce their assets by “spending down” or using a Medicaid Asset Protection Trust. While the Look-Back Period prevents Nursing Home Medicaid and HCBS Waivers applicants from simply giving away their home, they could use the Child Caregiver Exemption or Sibling Exemption to transfer their home to a qualified family member, which would prevent the home from counting against the asset limit.

Alabama residents who are over their income limit can use a Qualified Income Trust (QIT) to reduce their income and become eligible. However, QITs can only be used by Nursing Home Medicaid or HCBS Waivers applicants/recipients, they can not be used by ABD Medicaid applicants/recipients.

These Medicaid Planning strategies tend to be complicated, so consulting with a professional like a Certified Medicaid Planner or an Elder Law Attorney before attempting any of them on your own is recommended.

Applying For Alabama Medicaid Long Term Care Programs

The first step in applying for Alabama Medicaid Long Term Care coverage is deciding which of the three Medicaid programs discussed above you or your loved one wants to apply for – Nursing Home Medicaid, Home and Community Based Services (HCBS) Waivers or Aged, Blind, and Disabled (ABD) Medicaid.

The second step is determining if the applicant meets the financial and functional criteria, also discussed above, for that program. Applying for Alabama Medicaid when not financially eligible will result in the application, and benefits, being denied.

During the process of determining financial eligibility, it’s important to start gathering documentation that clearly details the financial situation for the Alabama Medicaid applicant. These documents will be needed for the official Medicaid application. Necessary documents may include tax forms, Social Security benefits letters, deeds to the home, proof of life insurance and quarterly statements for all bank accounts, retirement accounts and investments. For a complete list of documents you might need to submit with your Medicaid Long Term Care application, go to our Medicaid Application Documents Checklist.

After financial eligibility requirements are checked and double checked, documentation is gathered, and functional eligibility is clarified, Alabama residents can call the Alabama Medicaid Agency at 1-800-362-1504 to take the next steps in the application process. They can also download, complete and return this blank application to their local district Medicaid office.

For step-by-step guides to take you through the application process of all three types of Medicaid Long Term Care, click on the program you want: 1) Nursing Home Medicaid 2) HCBS Waivers 3) ABD Medicaid.

Choosing an Alabama Medicaid Nursing Home

After being approved for nursing home coverage through Alabama Medicaid, you or your loved one has to choose which Medicaid-accepting nursing home best meets your needs. Even though Nursing Home Medicaid is an entitlement, not all nursing homes take Medicaid, and those that do may not have available spaces. Finding the right facility can be a chore, especially if you’re looking in a specific location.

There are about 220 nursing homes in Alabama that accept Medicaid. Birmingham and Mobile each have about 15 of these facilities, the most of any cities in the state. Huntsville, the state’s largest city, has nine nursing homes that accept Medicaid and there are eight in Montgomery, the state capital. Outside of these areas, the choices narrow.

After finding nursing homes in your area that accept Medicaid, you can start comparing them, if there are multiple options. The Nursing Home Compare search can be filtered by overall rating, health inspections, staffing and quality measures, so that can be a good place to start. The Alabama Nursing Home Association locator also includes specialty care units, such as facilities that handle Alzheimer’s disease and other related dementias, behavioral issues and hospice. Each nursing home and specialty care facility listing includes an address, phone number, fax number and the names of the head administrator and director of nursing. Alabama residents.  You can also get information on nursing homes by contacting your local Area Agency on Aging.

Once you’ve done the research, you or someone you trust should visit potential options before making a final decision. Call first to make an appointment for the visit, and arrive prepared with a list of questions. Some things you might ask are: Does the residence provide transportation? Does it organize social activities? How does it facilitate oral and eye care? Who are the staff doctors? What’s the food like? CMS has a thorough “Nursing home checklist” you can use to evaluate a nursing home while visiting.

According to data collected by the CMS, Alabama nursing homes averaged 10.2 health deficiencies resulting in citations from 2018-2023, which is significantly lower than the national average of 27.2 during that same time frame. Alabama nursing homes also had a lower number of fire safety deficiencies than the national average, 9.9 compared to 13.5. The CMS data also showed the percentage of Alabama nursing home residents who reported depressive symptoms (1.1%) was considerably less than the national average (9.0%).