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As a Medicare beneficiary, where you live – meaning your state of residence – can have a significant impact on the care that you receive and how you pay for that care during your “golden years.” This page explains how Alabama’s regulations and policies are likely to affect your bottom line.
Many Medicare beneficiaries who struggle to afford the cost of Medicare coverage are eligible for Medicare Savings Programs (MSPs). These programs always pay the Medicare Part B premium and – in some cases – cover Part A premiums, as well as Medicare cost sharing.
MSP asset limit: There is no MSP asset limit in Alabama.
Medicare covers a great number of services – including hospitalization, physician services, and prescription drugs – but Original Medicare doesn’t cover important services like vision and dental benefits. Some beneficiaries – those whose incomes make them eligible for Medicaid – can receive coverage for those additional services if they’re enrolled in Medicaid for the aged, blind and disabled (ABD).
In Alabama, Medicare enrollees whose incomes make them eligible for Medicaid ABD can receive coverage for Medicare cost sharing. But Alabama Medicaid does not cover any dental care for adults.
Medicaid ABD does offer limited vision benefits in Alabama. Adults are covered for a full eye exam and one pair of eyeglasses every two years.
Medicaid ABD is called SSI-Related Medicaid in Alabama.
Eligibility: The income limit is $861 a month if single and $1,281 a month if married.
Asset limits: The asset limit is $2,000 if single and $3,000 if married.
Medicare beneficiaries who also have Medicaid, an MSP, or Supplemental Security Income (SSI) will receive Extra Help. This program lowers Medicare Part D prescription drug costs. When beneficiaries apply for this program themselves, the income limit is $1,843 a month for singles and $2,485 a month for couples. The asset limit is $16,660 for individuals and $33,240 for spouses.
Medicare beneficiaries increasingly rely on long-term care, and the portion of seniors needing these services will keep rising as the population ages. However, long-term care is mostly not covered by Medicare. While Medicaid fills the gap in Medicare coverage for long-term care, its complex eligibility rules can make qualifying for benefits difficult. What’s more – eligibility rules vary significantly from state to state.
Income limit: The income limit is $2,523 if single.
When only one spouse needs Medicaid, the income limit for the single applicant is used – and only the applicant’s income is counted.
Nursing home enrollees can keep $30 as a personal needs allowance. Nearly all their remaining income must be paid toward their care.
Asset limit: The asset limit is $2,000 if single and $4,000 if married (and both spouses are applying). If only one spouse needs Medicaid, spousal impoverishment rules allow the other spouse to keep up to $128,640. This limit excludes certain assets like many household effects, family heirlooms, some prepaid burial arrangements, and one car.
States offer varying levels of community-based long-term care through Medicaid, which is provided in an enrollee’s home, or adult day care center. Programs offering these services are known as Home and Community Based Services (HCBS) waivers because recipients don’t have to enter a nursing home.
Specific HCBS programs in Alabama include the Elderly and Disabled (E&D) Waiver Program, State of Alabama Independent Living Waiver (SAIL) Program and the Technology Assisted (TA) Waiver for Adults Program.
Income eligibility: The income limit is $2,523 a month if single and $5,046 a month if married (and both spouses are applying).
When only one spouse needs Medicaid, the income limit for single applicants is used – and only the applicant’s income is counted.
Some states require HCBS recipients to pay some of their income toward their care, but Alabama allows HCBS recipients to keep $2,349 a month as a personal needs allowance.
Asset limit: The asset limit is $2,000 if single and $4,000 if married (and both spouses are applying). If only one spouse needs Medicaid, spousal impoverishment rules allow the other spouse to keep up to $137,400.
Alabama does not have a Medicaid spend-down, which means individuals with incomes above the eligibility limit cannot qualify for Medicaid for the aged, blind and disabled. But individuals who have incomes above the limit of $2,523 a month (per applicant) for nursing home benefits can become eligible for those services by depositing income into a Qualified Income Trust, which is also called a “Miller Trust.”
In Alabama, applicants can use a Miller Trust to qualify for Medicaid nursing home coverage, but not to become eligible for HCBS. In most other states that allow Miller Trusts, applicants can use one to qualify for either nursing home benefits or HCBS.
Eligibility rules for Medicaid LTSS programs differ from other Medicaid benefits when only one spouse is applying. When this occurs, usually only the applying spouse’s income is counted. With other Medicaid benefits, the income of both spouses is counted even if only one spouse needs Medicaid.
Spousal impoverishment rules allow the spouses of Medicaid LTSS recipients to keep a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s monthly income, along with resource and housing allowances. These rules apply when one spouse receives Medicaid coverage for LTSS, and the other spouse doesn’t have Medicaid.
In Alabama in 2022, these spousal impoverishment rules allow community spouses to keep:
States, as required by federal law, limit the home equity beneficiaries for nursing home care and HCBS can have. States set this home equity limit by choosing between a federal minimum of $688,000 and maximum of $1,033,000 in 2023.
In Alabama, LTSS recipients can’t have more than $688,000 in home equity.
Because long-term care is expensive, individuals may give away their assets to qualify for Medicaid LTSS. To limit this activity, federal law requires states to have a penalty period for Medicaid nursing home applicants who give away or transfer assets for less than their value. Medicaid will not cover LTSS during this period.
Alabama has chosen to have an asset transfer penalty for nursing home care and HCBS. This penalty is based on a 60-month look-back period prior to applying for Medicaid where asset transfers and gifts are prohibited. The penalty’s length is calculated by dividing the amount of money transferred or given away by the monthly cost of nursing home care, which is $6,800 in Alabama.
A state’s Medicaid agency is required to recover what it paid for LTSS and related medical costs beginning at the age of 55. States can choose to also pursue estate recovery for Medicaid benefits unrelated to LTSS (and for enrollees who did not receive LTSS).
Alabama has chosen to recover the cost of all Medicaid benefits received beginning at the age of 55. This means the state pursues estate recovery against enrollees who received Medicaid benefits for things like primary care or Medicaid-covered prescription drugs.
The state may also pursue estate recovery for enrollees under age 55 who were institutionalized.
In Alabama, only the probate estate is subject to estate recovery, meaning that retirement or bank accounts with “transfer-on-death” provisions are exempt (along with other property not subject to probate in Alabama).
Estate recovery is often delayed if an enrollee is survived by a child who is under 21 or is blind or disabled, and may be delayed when an enrollee is survived by their spouse.
State Health Insurance Assistance Program (SHIP)
Free volunteer Medicare counseling is available through Alabama’s State Health Insurance Assistance Program (SHIP) at 800-AGELINE (800-243-5463). The SHIP is part of the Alabama Department of Senior Services and sponsored by the federal government.
SHIPs can help beneficiaries enroll in Medicare, compare and change Medicare Advantage and Part D plans, and answer questions about state Medigap protections. They may also be able to offer referrals to local agencies for services like home care and long-term care. This website has more information about the SHIP in Alabama.
Elder Law Attorneys
Elder law attorneys can help individuals plan for Medicaid long-term care benefits. Use this search feature from the National Academy of Elder Law Attorneys (NAELA) to find local legal help.
If you are low-income, you may qualify to receive legal help with Medicaid issues from Legal Services Alabama.
Area Agencies on Aging
Area Agencies on Aging (AAAs) can provide information about benefits and services available to older adults and people with disabilities. This website lists AAAs in each region in Alabama.
The Alabama Medicaid program is administered by the Alabama Department of Public Health. You can find more information about applying for Medicaid or an MSP in Alabama by visiting this website or calling 800-362-1504.