What is a Medicaid Waiver?
For persons with limited financial resources, Medicaid pays for nursing home care. For those who wish to live at home or in assisted living, sometimes Medicaid will pay for care in those locations if it can be obtained at a lower cost than in a nursing home. It does this through “Medicaid Waivers,” which are also called Home and Community Based Services (HCBS) Waivers or Waiver Funded Services.
Based on the Cash and Counseling model, the Personal Choices program offers qualified, Alabama seniors and disabled individuals the option to select and manage their own care providers. This consumer directed program is open to Medicaid participants who are currently receiving services under a Home and Community-Based Waiver Services program, including the State of Alabama Independent Program (SAIL), previously referred to as the Homebound Waiver, the Alabama Community Transition Waiver (ACT), and the Elderly and Disabled Waiver (E&D).
The Personal Choices program shifts the responsibility of selecting caregivers provided under the Medicaid waivers to the participants themselves. This allows them to direct their own care services. To be clear, wages for caregiving services are not given directly to the participants. Rather, they are given to an intermediary financial management agency, and then to the care providers chosen by the participants. Participating individuals no longer receive care from Medicaid providers.
This type of program, in which the consumer directs their own care, is referred to by many names, including “participant direction,” “self-directed care,” and “cash and counseling,” as mentioned before. Nationally, these programs are growing in popularity, in part because they allow eligible individuals to be hands-on when it comes to the care they receive. Furthermore, studies have shown that they may have positive effects on health outcomes.
Seniors have a choice as to which provider they prefer, what type of care they need, and when the care is required. An individual may have someone represent him or her to help manage care if he or she is not comfortable or capable of doing so alone. This program may also allow family members, including spouses in some situations, to be paid as personal caregivers. To be eligible as a caregiver, persons must be over 18 years of age and pass a basic screening test.
This program is governed by the Alabama Medicaid Agency in collaboration with the Alabama Department of Rehabilitation Services and the Alabama Department of Senior Services.
To qualify for the Personal Choices program, individuals must be residents of Alabama. They must enroll (or be enrolled) in Medicaid and be receiving personal care or personal assistance services under a Home and Community-Based Waiver Services program, including the SAIL Waiver, the ACT Waiver, or the E&D Waiver. Under the rules for these waivers, a medical declaration is required that shows the client requires nursing home level care. There are also financial requirements.
Income limits change each year with the federal cost of living adjustment. In 2023, individual gross income (total pay before any deductions, such as taxes) cannot exceed $2,742 per month. For married couples in which BOTH spouses are applying for services, the combined monthly income is limited to $5,484. (Each spouse is considered as a single applicant, so if only one spouse is applying, the other spouse’s income isn’t counted.)
Individuals and couples who are over this income level have the option to use a Miller Trust, also called a Qualified Income Trust, to reduce income to within the limit and qualify. Money from the Miller Trust is commonly used to help cover medical and care costs of the Medicaid applicant.
For married couples with just one spouse applying for Medicaid, part (or all) of the applicant spouse’s income may be transferred to the non-applicant spouse (also called the community spouse). Intended to protect the non-applicant spouse from becoming impoverished, as much as $2,288.75 a month can be transferred from the applicant spouse to the non-applicant spouse. (This figure is formally called the minimum monthly maintenance needs allowance, abbreviated as MMMNA, and increases July 1st of each year.) If the community spouse has income equal to or greater than the current MMMNA, no income can be transferred to him or her. In other words, the MMMNA is intended to get a community spouse’s income up to the monthly threshold of $2,288.75.
Asset limits typically do not change as frequently as does the income limit. For the last several years, the limit for a single applicant has been $2,000, and $4,000 for a married couple in which both spouses are applying for Medicaid. Fortunately, Alabama permits non-applicant spouses to keep a larger portion of the couple’s net worth and property. (A couple’s assets are considered jointly owned. Learn more here
The couple’s primary residence, their auto, household items, and personal effects are not counted towards eligibility purposes. In addition, in 2023, the healthier, non-applicant spouse may be able to keep up to $148,620 of their countable assets, including savings and retirement accounts. This is called the community spouse resource allowance (CSRA).
Please Note: Importantly, the state may review an applicant’s financial transfers as far back as 60 months from the date of application to verify money was not given away, or assets sold under fair market value, to meet Medicaid’s asset limit and qualify for Medicaid. This is called the Medicaid Look-Back Period and may result in a period of ineligibility if one is found to be in violation.
Over the Financial Limits?
Exceeding the limits by relatively minor amounts may not rule out qualifying for Medicaid. Planning professionals who specialize in Alabama Medicaid eligibility can help families to reach the state standards by shifting assets and using specially designed trusts. Learn more about how a Medicaid planner may assist you.
Benefits and Services
The Personal Choices program pays cash to a Financial Management Service Agency in place of providing services. The Service Agency compensates care providers as determined by an agreed upon plan between the participant and their Personal Choice Program Counselor. Plans can include the following types of care:
- Personal Care
- Respite Care (excludes skilled nursing)
- Homemaker Services
- Companion / Accompaniment Services
It is also possible to save budgeted money on a monthly basis to go towards purchasing equipment, such as a lift chair, that is not available through Medicaid.
How to Apply / Learn More
When this option was first introduced in 2007, the state designated it as a pilot program and it was only available in nine western counties. However, since October of 2015, it has been available statewide. Individuals who are interested in using this option when they receive their waiver-funded services should contact their local regional Area Agency on Aging. More information about this program is available on the Alabama Personal Choices webpage.