Arkansas Medicaid, run by the Department of Human Services (DHS), provides various types of Medicaid programs for low-asset and low-income Arkansas residents. Many of these programs have asset limits and/or income limits, which are determined by the federal poverty level (FPL).
Vendor Medicaid, also known as nursing home Medicaid or long-term care Medicaid, has an asset limit, also known as a resource limit, of $2000 for applicants. Countable assets include bank accounts, IRAs, and life insurance policies. The primary residence and one vehicle are considered exempt assets and are not counted towards the asset limit. In addition, there is an income eligibility factor. Income, such as Social Security and pensions, is limited to $2982 per month. Most monthly income must be paid to the nursing facility, with the exception of a credit for Medicare premiums and a small personal needs allowance for items and services the facility does not provide. Additionally, the Medicaid beneficiary must be medically needy enough to qualify for round-the-clock care in a nursing facility.
Home and Community Based Services (HCBS) have similar financial eligibility criteria to vendor Medicaid. However, HCBS services take place in-home, at adult day care, or in assisted living facilities. HCBS recipients must require a nursing home level of care, and the Medicaid services provided are intended to delay or prevent admission to a nursing facility. Unlike vendor Medicaid, HCBS are not entitlement programs, meaning that there are often wait-lists for Medicaid coverage.
Although Medicaid eligibility may seem difficult to accomplish, there are strategies that can be utilized to help a person become eligible for Arkansas Medicaid. For instance, a person who is over assets or “over-resourced” may complete a spend down. This means expending assets on things like home improvements or medical bills. However, any asset transfers or purchases must be done at fair market value. Medicaid has a five-year look-back period in which assets cannot be gifted away, otherwise the Medicaid applicant may incur a penalty period. If a person is over-income, they can create a special type of trust called a Qualified Income Trust, also known as a Miller Trust. Assets in a QIT can only be used for medical expenses, but it allows a person so skirt eligibility requirements to receive health insurance through Medicaid.
To utilize these and other strategies, it is recommended to seek the advice of an elder law attorney licensed in your state. Ahead of time, attorneys can do Medicaid planning and estate planning to preserve assets, or they can assist with the Medicaid application itself.