Long-Term Care Medicaid in Alabama: 2026 Guide

In Alabama, Long-Term Care Medicaid is run by the Alabama Medicaid Agency, which also decides eligibility for nursing home care and home care waivers. Care at home is offered through waivers such as the Elderly and Disabled (E&D) Waiver, operated with the Alabama Department of Senior Services (ADSS). This guide explains the rules in plain language.

At a glance: Alabama 2026 figures

Figures last updated for 2026. Sources are listed at the end of this page.

Figures change periodically. Double-check current amounts with the Alabama Medicaid Agency before relying on them.

What Long-Term Care Medicaid covers in Alabama

Nursing home care. Medicaid pays for care in a certified nursing facility. You pay most of your income toward the cost each month, and Medicaid pays the rest.

Elderly and Disabled (E&D) Waiver. This home and community-based waiver serves older adults and people with disabilities who are at risk of nursing facility placement. A case manager works with you on a plan of care. Depending on the plan, services can include personal care, homemaker help, respite, adult day health, companion services and home-delivered frozen meals. ADSS is the operating agency, working through local Area Agencies on Aging.

Other waivers. Alabama also has the Alabama Community Transition (ACT) Waiver for people moving out of a nursing home, and other waivers for specific groups. Alabama Medicaid says waiver enrollment is limited, so a waiting period may be needed.

Integrated Care Network (ICN). People in nursing homes and on the E&D and ACT waivers are part of the Integrated Care Network, a case management program run for Medicaid by the Alabama Select Network. It helps coordinate long-term care and medical needs.

Assisted living. Alabama Medicaid generally does not pay for assisted living.

How Medicare fits in. Medicare Part A covers skilled nursing facility care only for a limited time. You generally need a medically necessary inpatient hospital stay of at least 3 days in a row first (time under observation or in the emergency room does not count), and you must need daily skilled nursing or therapy. In 2026, Medicare charges nothing for days 1 to 20 after the Part A deductible ($1,736) is met, $217 a day for days 21 to 100, and nothing after day 100, when you pay all costs. Medicare limits this coverage to 100 days in each benefit period. Medicaid can be a way to pay for long-term nursing home care after Medicare coverage ends.

Who qualifies

A person generally must:

• be 65 or older, or blind or disabled;
• live in Alabama and be a U.S. citizen or qualified non-citizen;
• meet Alabama Medicaid’s admission criteria for nursing facility care, or the level of care required for a waiver;
• meet the income and asset rules below, as decided by the Alabama Medicaid Agency.

Income rules

Alabama uses an income limit for nursing home and waiver Medicaid. For applicants entering a nursing home with income above the limit, Alabama Medicaid has a Qualifying Income Trust (QIT) packet (Form 262).

Once you are on Medicaid in a nursing home, most of your income goes to the facility. You keep a personal needs allowance of $30 a month, and money can be set aside for a spouse at home and for health insurance premiums.

Asset rules

A single applicant can have up to $2,000 in countable resources. For a couple who both need care, the limit is $3,000.

Countable resources include cash, bank accounts, CDs, stocks, bonds, mutual funds, retirement accounts that can be cashed in, life insurance cash value above set amounts and real estate other than the home.

Usually exempt:

• Your home, if you live there or plan to return, or a spouse or dependent relative lives there
• One vehicle
• Household goods and personal belongings
• Burial plots and limited burial funds, within Alabama Medicaid rules

Spousal protections

• Assets: Alabama’s rule lets the spouse at home keep a share of the couple’s countable resources within federal limits, plus the home, one car and belongings.
• Income: The spouse at home keeps their own income, and part of the applicant’s income can be set aside for them if their income is low.

Look-back and penalties

When you apply, Alabama looks back at the 60 months (5 years) before the application date. This is called the look-back period. The state checks whether you, or your spouse, gave away money or property, or sold something for less than it was worth, during that time.

Common examples of transfers that can cause a problem:

• Cash gifts to children or grandchildren, even small yearly gifts. (A gift that is fine for federal gift-tax purposes can still count for Medicaid.)
• Adding a child’s name to a house deed or bank account in a way that gives them part ownership.
• Selling a house or car to a relative for much less than it is worth.
• Paying a family member for care without a written agreement made at the time.

Some transfers are allowed, such as transfers between spouses, or transferring a home to a child who is blind or disabled.

How the penalty works. If the state finds a transfer that is not allowed, it does not deny Medicaid forever. Instead, it sets a penalty period: a stretch of time when Medicaid will not pay for long-term care. The state divides the amount given away by the penalty divisor ($7,800 a month).

Example: Suppose you gave your daughter $50,000 three years before applying. $50,000 divided by $7,800 is about 6.4 months without Medicaid payment for long-term care.

The penalty period starts only once you have applied, are otherwise eligible, and are in (or need) long-term care. This is why gifts made while someone is healthy can still matter years later. If a gift is returned in full, the penalty can be removed.

Estate recovery in Alabama

Alabama’s estate recovery program is run by the Alabama Medicaid Agency.

• What is recovered: Medicaid paid for services received at age 55 or older, and for some people of any age in a nursing facility.
• When it is put off: federal rules prevent recovery while a spouse is alive, or if there is a child under 21 or a child who is blind or disabled.
• Hardship waivers: Alabama Medicaid can waive or put off recovery in some situations. Ask Alabama Medicaid for the current rules.
• Family members and personal representatives can contact Alabama Medicaid with questions.

How to apply

• Online: the Alabama Medicaid Elderly and Disabled application, used for nursing home care and home and community-based waivers
• On paper: Form 204/205, from the Alabama Medicaid applicant forms page. The same page has a “Tips for Applying” sheet for nursing home Medicaid and the Form 262 trust packet.
• For the E&D Waiver: contact your local Area Agency on Aging / Aging and Disability Resource Center.

After you apply. Alabama Medicaid will send you a written notice saying whether you qualify, from what date, and how much of your income goes toward your care each month. If you disagree with a decision, you have the right to ask for a fair hearing (appeal). The notice explains how to ask and the deadline for asking. Waiver applicants and participants also have the right to appeal decisions that deny, reduce or end services. Keep copies of everything you send and receive.

Gather what you can before you apply. The caseworker may ask for:

• Photo ID, Social Security card and Medicare card
• Proof of age and of U.S. citizenship or immigration status
• Proof that you live in the state (for example, a utility bill or lease)
• Proof of all income: Social Security award letter, pension statements, annuity statements
• Bank, credit union and investment statements (often for the full 60-month look-back period)
• Deeds, property tax bills and the value of any real estate
• Life insurance policies (showing cash value) and prepaid funeral or burial contracts
• Vehicle titles
• Health insurance cards and long-term care insurance policies
• Power of attorney or guardianship papers, if someone is applying for you
• For a spouse at home: their income and assets too, since both spouses’ assets are counted at the start

If you cannot find a document, apply anyway and tell the caseworker. They can explain what else is accepted.

Free public help in Alabama

• Alabama Medicaid Agency: applications, eligibility and program questions.
• Alabama Department of Senior Services, Area Agencies on Aging and ADRCs: local information on long-term care options and the E&D Waiver.
• SHIP (State Health Insurance Assistance Program): Alabama’s free Medicare counseling program, through ADSS.
• Alabama Long-Term Care Ombudsman Program: free advocates for residents of nursing homes and assisted living.

Recent and upcoming changes

A 2025 federal law (Public Law 119-21) makes two changes that affect Long-Term Care Medicaid in every state, including Alabama:

• Retroactive coverage gets shorter on January 1, 2027. Today, Medicaid can pay bills from up to 3 months before the month you apply, if you would have qualified then. For applications from January 1, 2027, this window shrinks to 2 months for older adults and people with disabilities. In plain terms: from 2027, it matters more to apply soon after care starts, so that earlier bills are not left unpaid.
• Home equity cap on January 1, 2028. States will no longer be able to set a home equity limit above $1,000,000 (except for some farm property). Alabama’s 2026 home equity limit is $1,130,000, which is above the new cap. Alabama will have to lower its limit to no more than $1,000,000 by January 1, 2028.

The federal amounts that change each year (for example, the allowances for a spouse at home) will be updated on this page for 2027 once they are published.

State programs

Each program below has its own page with who qualifies, services, how to apply and waiting lists:

• Alabama Elderly and Disabled (E&D) Waiver
• Alabama Community Transition (ACT) Waiver

Frequently asked questions

Who decides eligibility for nursing home Medicaid in Alabama? The Alabama Medicaid Agency. You can apply online with its Elderly and Disabled application or on paper with Form 204/205.

What is the E&D Waiver? It is Alabama’s main Medicaid program for care at home for older adults and people with disabilities who are at risk of needing a nursing home. Enrollment is limited.

My income is over the limit. Can I still qualify? Alabama Medicaid has a Qualifying Income Trust packet (Form 262) for nursing home applicants with excess income.

What is the personal needs allowance? $30 a month for a nursing home resident. The rest of your income, after allowed deductions, goes toward your care.

How is a gift penalty worked out? Alabama divides the amount given away by its penalty divisor.

Will the state take my home after I die? Alabama Medicaid can seek repayment for Medicaid paid after age 55, which can include the home. Recovery is put off while a spouse or a young or disabled child survives, and hardship waivers exist.

Figures change periodically. Double-check current amounts with the Alabama Medicaid Agency before relying on them.

Sources

• Alabama Administrative Code 560-X-25-.16
• Alabama Medicaid State Plan, Attachment 2.6-A
• Alabama Medicaid, Applicant forms
• Alabama Medicaid, Elderly and Disabled application
• Alabama Medicaid, Home and Community-Based Waiver Services
• ADSS, Medicaid Waiver Programs
• Alabama Administrative Code 560-X-64-.16, ICN covered population
• Medicare.gov, Skilled nursing facility care
• CMS, 2026 SSI and spousal impoverishment standards
• Public Law 119-21 (2025)

Last updated for 2026. General information only, not legal or financial advice. Medicaid Answers is a free educational resource published by Medicaid Answers Foundation.