What are the important “numbers” for Alabama Medicaid in 2019 for long term care in a nursing home
Understand the key numbers of Alabama Medicaid as you consider long term care options including nursing home care.
We are updating this popular article for 2019 so pardon any mess in our renovation. 🙂
If you are facing long term care (nursing home) in Alabama in 2019, then you almost certainly are looking at Medicaid which pays for nursing home care for most folks. When we look at Alabama Medicaid, we have to know the numbers.
Whether we like it or not, Medicaid runs on numbers.
All sorts of numbers so let’s take a look at them along with a short description.
Then we’ll dive deep into each number in a separate article.
Keep in mind these numbers can change so always check with an elder law attorney before making any decisions but understanding the concept will be very helpful to you as you plan for long term care.
Let’s look at the numbers first
Look back Period — 60 months
Penalty Divisor — $6,200
Monthly Income Cap — $2,313
Individual Resource Allowance — $2,000
Monthly Personal Needs Allowance — $30
Minimum Community Spouse Resource Allowance — $25,284
Maximum Community Spouse Resource Allowance — $126,420
Minimum Monthly Maintenance Needs Allowance — $2,057
Now we’ll briefly look at what these numbers mean.
Look Back Period — 60 months
When you apply for, and are qualified for, Alabama Medicaid, then Medicaid looks back in time 60 months to see if you gave away any assets. Medicaid is looking for a situation where you received less than full fair market value in exchange for the asset.
If you do have gifts, then we use the “penalty divisor” to figure out the penalty period. . . .
Penalty Divisor — $6,200
This is the number we divide into the amount of gifts you made over the 60 months.
So it looks like this:
Amount of Gifts over last 60 months divided by $6,200.
The answer to the math question tells you how many months you will need to privately pay as Medicaid has penalized you for giving away assets.
If you gave away $62,000, then the math would be:
$62,000 divided by $6,200 equals 10 months of penalty.
If you gave away $620,000 instead, the the math would be:
$620,000 divided by $6,200 equals 100 months of penalty.
Let’s now turn our attention to how much income the spouse (or single person) going in the nursing home (“institutional spouse”) can have . . . .
Institutional Monthly Income Cap — $2,313
This is the most the person going into the nursing home can make per month. If you make more than this, you don’t qualify because of too much income.
But the solution is fairly straight forward — you set up what is commonly called a “Miller Trust” with your bank. In essence, it simply means all of your income goes toward the payment of the nursing home bill except your Personal Needs Allowance (see below).
(You can read more in depth about the monthly income cap and Miller Trusts).
Institutional Individual Resource Allowance — $2,000
The institutional person (one going in the nursing home) can keep up to $2,000 in assets and still qualify for Alabama Medicaid. This can be in cash, property, etc. but the amount is only $2,000. (Note there are exceptions discussed in the link above).
Institutional Monthly Personal Needs Allowance — $30
This is the amount from your income that you can keep — $30. The purpose of this is to have some (very limited) money to use for things such as eating out, hair cuts, etc.
Frankly this is too little but it is what Alabama Medicaid allows.
Minimum Community Spouse Resource Allowance — $25,284
When we have a married couple, we take their assets and combine them. Regardless of who owns what or any pre nuptial agreement. Then we split them in half.
The spouse going into the nursing home (institutional spouse) can keep the $2,000 mentioned above.
We’ll discuss in another article what we do with the “excess” money of both the institutional and community spouses.
Maximum Community Spouse Resource Allowance — $126,420
As in the last section, we combine the assets of both spouses and divide them in half.
The institutional spouse keeps up to $2,000 and the community spouse (still living at home) keeps up to a maximum of $126,420.
For the “excess” assets for both spouses, we have plans and strategies on what to do with those funds that we will discuss in a separate article.
Minimum Monthly Maintenance Needs Allowance For Community Spouse– $2,058
Here’s the idea behind this. Often one spouse makes the most money and what happens if that spouse goes into a nursing home? It leaves the “community spouse” at home but with very little income.
So Alabama Medicaid has set a minimum amount of monthly income for the community spouse. The amount is this $2,058 a month. The full name of this is “Minimum Monthly Maintenance Needs Allowance” or MMMNA.
If the community spouse makes more than this, nothing changes.
But if the community spouse makes less than this, then we normally can “divert” money from the institutional spouse to get the community spouse up to the $2,058 a month.
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We are always happy to do in person meetings but realize often families are not in the same place geographically and sometimes have challenging work schedules or family commitments. This is why we often do a conference call or video chat — to make it convenient for everyone.
What we do in these meetings is to fully understand where your family is right now in the process. The health, the income, the assets, etc. What questions do you have? Where do you want to get to?
Then we can lay out a plan for you to get you from where you are now to where you want to go. We’ll explain the advantages, the disadvantages, the costs, and our unique fee guarantee. All of this is done so that whatever decision you make will be with full confidence and comfort.
We’re here to help — let us know when you are ready for us to chat with you.
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