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Financial help for Alabama Medicare enrollees

Alabama residents can use a Miller Trust to qualify for Medicaid nursing home coverage, but not for in-home long-term care coverage

Josh Schultz // October 4, 2020

Reviewed by our health policy panel.

Medicare beneficiaries may also qualify for Medicaid. Medicaid may help pay for some Medicare expenses or cover services that aren’t covered by Medicare. This page describes how Alabama’s regulations and policies may impact your bottom line.

Does Alabama help with my Medicare premiums?

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.

  • Qualified Medicare Beneficiary (QMB): The income limit is $1,084 a month for individuals and $1,743 a month for couples.  For those who qualify, QMB pays Part A and B cost sharing and Part B premiums. QMB will also cover a beneficiary’s Part A premiums, if the beneficiary owes them.
  • Specified Low-income Medicare Beneficiary (SLMB): SLMB pays for Part B premiums. The income limit is from QMB levels up to $1,296 a month if single or $1,743 a month if married.
  • Qualifying Individuals (QI): The income limit is from SLMB levels up to $1,436 a month for singles and $1,940 a month for married couples. QI pays for Part B premiums.
  • Qualified Disabled Working Individuals (QDWI): The income limit is $4,339 a month if single and $5,833 a month if married. QDWI pays for Part A premiums (but not Part B premiums) owed by certain disabled beneficiaries who return to work.

MSP asset limit: There is no asset limit for QMB, SLMB or QI in Alabama. The QDWI asset limit is $4,000 for enrollees living alone and $6,000 for enrollees living with another person.

The income limits for QMB, SLMB and QI vary based on an applicant’s marital status. In contrast, eligibility rules for QDWI, Medicaid for the aged, blind and disabled, and Long Term Services and Supports programs vary based on the number of household members (but not the applicant’s marital status).

Who’s eligible for Medicaid for the aged, blind and disabled (ABD) in Alabama?

Medicare covers many services – including hospitalization, physician services, and prescription drugs – but coverage varies between Original Medicare and Medicare Advantage. Medicare can also have significant premiums and cost sharing obligations (i.e. co-pays, coinsurances, deductibles).

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 three years.

Medicaid ABD is called SSI-Related Medicaid in Alabama.

Eligibility: The income limit is $803 a month if single and $1,195 a month if married.

Asset limits: The asset limit is $2,000 if single and $3,000 if married.

Assistance with prescription drug costs in Alabama

Medicare beneficiaries who are enrolled in Medicaid, an MSP, or Supplemental Security Income (SSI) also receive Extra Help – a federal program that lowers prescription drug costs under Medicare Part D. Enrollees who don’t receive this benefit automatically can apply for it through the Social Security Administration (SSA), in which case the income limit is $1,615 a month if single and $2,175 a month if married. The asset limit is $14,610 if single and $29,160 if married.

How does Alabama regulate long-term services and supports (LTSS)?

Medicare beneficiaries increasingly rely on long-term services and supports (LTSS) – or long-term care – which for the most part is not covered by Medicare. In 2015, 20 percent of Medicare beneficiaries who were living at home received some assistance with LTSS – and even more seniors will need those services as the population ages.

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Medicaid fills this gap in Medicare coverage for long-term care, but its complex eligibility rules can make qualifying for benefits difficult. What’s more – eligibility rules vary significantly from state to state.

Medicaid nursing home coverage in Alabama

Income limit: The income limit is $2,349 if single and $4,698 if married (and both spouses are applying).

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 $126,800. This limit excludes certain assets like many household effects, family heirlooms, some prepaid burial arrangements, and one car.

Home and Community Based Services (HCBS) waivers 

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 $2,349 a month if single and $4,698 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 $126,800.

Qualifying for Medicaid with income above the eligibility limit in Alabama

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 $2,349 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.

Spousal impoverishment protections in Alabama

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 2020, these spousal impoverishment rules allow community spouses to keep:

Permitted home value in Alabama

Federal law requires states to restrict eligibility for Medicaid nursing home benefits and HCBS to applicants with a home equity interest below a certain dollar amount. Alabama limits Medicaid eligibility for nursing home benefits and HCBS to applicants with a home equity interest of $595,000 or less.

Penalties for transferring assets in Alabama

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 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 $6,200 in Alabama as of 2019.

Estate recovery in Alabama

A state Medicaid agency is required to recover what it paid for long-term care and related medical costs received beginning at age 55. The law also authorizes states to recover all Medicaid benefits paid on behalf of those beneficiaries (and not just LTSS and related costs). This process is called estate recovery.

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.

Congress exempted Medicare premiums and cost sharing from Medicaid estate recovery for benefits paid after December 31, 2009, but Medicaid may attempt to recover benefits received through that date.

Where can Medicare beneficiaries get help in Alabama?

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.

Where can I apply for Medicaid 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.

Josh Schultz has a strong background in Medicare and the Affordable Care Act. He coordinated a Medicare ombudsman contract at the Medicare Rights Center in New York City, and represented clients in extensive Medicare claims and appeals. In addition to advocacy work, Josh helped implement state health insurance exchanges at the technology firm hCentive. He has also held consulting roles, including at Sachs Policy Group, where he worked on Medicare and Medicaid issues.