What is a Medicaid Waiver?
Medicaid is an entitlement program for persons with limited financial means. Medicaid pays for nursing home care when an elderly individual requires it and cannot afford it. 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.
The Living Choices Assisted Living Waiver (ALW) provides 24-hour supervision and personal care services in a congregate or community setting (state licensed assisted living residences) to avoid the unnecessary institutionalization of the elderly and disabled in nursing homes. In most cases, this program can provide services at a lower cost than in an institutional nursing home setting.
While this program covers the cost of care at assisted living residences, program participants are required to cover the room and board portion. Families are not permitted to supplement the room and board portion, but can help pay for other essentials the individual may require.
While this community living Medicaid waiver offers an alternative to nursing home care, the state sets participant enrollment limits. This means that statewide demand may exceed the cap and a waiting list will form. Prioritization is usually by date of application, but the severity of need may also be considered.
Did You Know?
Assisted living communities in Arkansas are some of the least expensive in the country. According to Genworth’s 2021 Cost of Care Survey, the average monthly cost of assisted living in Arkansas is $3,760 a month. This average monthly fee is approximately 20% lower than the national average of $4,500 / month.
Arkansas Medicaid considers a variety of different criteria when determining eligibility. This can be confusing, so be aware that assistance options are available.
Age – Living Choices Assisted Living Waiver is open to all state residents 65 years of age or older. Persons 21-64 years of age are eligible if they have been designated as physically disabled or blind by Social Security.
Residency – Program participants must be residents of the state of Arkansas. The assisted living community into which they are moving must be within the state borders.
Functional Ability – Applicants must require a level of care that is consistent with that of an intermediate level of nursing home care. In addition, one must have a medical need for one of the services that is offered via this Medicaid Waiver. For example, one may have a medical condition that requires assistance to perform activities of daily living such as eating, toileting, or transferring. Or be diagnosed with Alzheimer’s or another form of dementia, where their level of impairment requires regular supervision.
Applicants cannot have monthly income exceeding 300% of the Social Security Income (SSI) Federal Benefit Rate (FBR). In 2023, this is equal to $2,742 per month for a single individual. For married couples when both spouses are applying, the income limit is $5,484 per month.
When only one spouse is applying, the non-applicant spouse’s income is not considered toward the applicant spouse’s income eligibility. In addition, there is a monthly maintenance needs allowance that enables the applicant spouse to transfer income to the non-applicant spouse to prevent spousal impoverishment. As of 2023, the monthly spousal allowance could be as much as $3,715.50.
Widowed, divorced and unmarried applicants are permitted $2,000 in countable assets. Married couples, with both spouses as applicants, are allowed up to $3,000 in assets. Countable assets include cash, bank accounts, and mutual funds.
Typically, an applicant’s home is excluded as a countable asset if his/her equity interest is under $688,000 and he/she expresses an intent to return to living in the home. There is an exception that exists for those who have a spouse who continues to live in the home. Furthermore, a vehicle, home furnishings, and personal items are all excluded from being counted towards the asset limit.
If just one spouse of a married couple is an applicant, the asset criteria is different and vastly more complicated. To prevent a healthy spouse from becoming destitute, a non-applicant spouse is permitted to have up to $148,620 in countable assets. (This is called the Community Spouse Resource Allowance and is abbreviated as CSRA). Unlike with income, assets of a married couple are considered jointly owed. Even so, many countable jointly held assets can be allocated to the non-applicant spouse as long as the total value does not exceed the CSRA. Please note that the applicant spouse is still able to keep up to $2,000 in assets.
Over the Financial Limits?
Being over the asset and/or income limits is not cause for automatic disqualification from Medicaid. If one is over the asset limit, countable assets can be “spent down” in order to reduce the amount of one’s countable assets. For instance, one may pay off debt, such as medical bills and credit cards, or improve a non-countable asset, such as upgrading the plumbing and heating of one’s home.
Persons over the income limit can become income eligible by depositing their excess monthly income (income over Medicaid’s income limit) into a Qualified Income Trust (QIT), which is commonly called a Miller Trust. The established trust must be irrevocable, meaning it cannot be changed or cancelled. A trustee is named to manage the QIT, and since the Medicaid applicant no longer has control over the funds in it, the income deposited into the trust no longer is counted toward Medicaid’s income limit. Please note that the funds in the QIT can only be used for very specific purposes, such as medical and care expenses of the Medicaid beneficiary.
Other Pathways to Eligibility
Fortunately, and unfortunately, Medicaid eligibility is complex. While this creates confusion, it also creates opportunities to find alternative approaches to becoming Medicaid eligible. It can be compared to filing taxes. There are strategies and techniques that can help families reduce their taxes that are not obvious to the average person, but by working with a tax advisor, families can take advantage of those tax breaks. Medicaid is similar, by working with a professional, families can find creative ways to become eligible.
Benefits and Services
The specific services received under this waiver are determined by the individual’s care plan, but can include:
- Assisted living services
- Attendant care (Assistance with daily living activities, such as eating, dressing, using the bathroom, light housecleaning, and shopping for groceries, etc.)
- Extended prescription drug coverage
- Medication oversight and administration
- Non-medical transportation
- Nursing evaluations and some nursing services
- Pharmacist consultant services
- Social, therapeutic, and recreational activities
How to Apply / Learn More
The Living Choices Assisted Living Waiver is administered by the Arkansas Department of Human Services’ (DHS) Division of Aging, Adult, and Behavioral Health Services (DAABHS) and the Division of Provider Services and Quality Assurance (DPSQA). More information is available on their webpage.
To apply, one should contact their local DHS county office or call the Choices in Living Resource Center at 866-801-3435.