Alabama Medicaid Income Limits 2026: Eligibility & Assets

Alabama Medicaid income limits come in two versions, and which one applies depends on why you need coverage. For long-term-care coverage in 2026, a single applicant's gross income must be at or below $2,982 a month and countable assets at or below $2,000. That ceiling is hard: going over it does not let you spend down to qualify.1 For children, pregnant women, and parents or caretaker relatives, a separate MAGI test applies instead, set as a percentage of the poverty level, with no asset test at all.2,3

This guide covers both. It walks through the 2026 MAGI limits, including why Alabama covers parents only to 13% of the poverty level and offers no pathway at all to adults without dependent children, and then the long-term-care rules for seniors and people with disabilities: the asset limit, the income cap and why an over-income applicant has to set up a Miller Trust, what a nursing-home resident keeps, what a spouse at home is protected from, the five-year look-back, and how to apply.1,2

In This Guide

• Alabama Medicaid income limits in 2026: the numbers that matter
• Alabama Medicaid income limits under MAGI: the other income test
• The asset limit
• The Alabama Medicaid income limit: the income cap and the Miller Trust
• Long-term care: what a nursing-home resident keeps
• Protecting the spouse who stays home
• After death: estate recovery
• How to apply in Alabama
• Frequently Asked Questions
• Learn More

Alabama Medicaid income limits under MAGI: the other income test

Everything above describes one of Alabama's two income tests. The $2,982/month figure is the long-term-care number: 300% of the SSI Federal Benefit Rate, the special income level Alabama applies to nursing-facility and home-and-community-based waiver coverage. It sits on the SSI-related aged, blind, and disabled (ABD) side of the system, and it is the right number only if you are seeking long-term care.1,4 Many people searching for an Alabama Medicaid income limit are not in that group.

The other test is MAGI, or Modified Adjusted Gross Income. It governs children, pregnant women, and parents or other caretaker relatives, and it is written as a percentage of the Federal Poverty Level (FPL) rather than a flat dollar cap. The two tests use different thresholds and different rules about assets.3,2

These MAGI standards took effect in February 2026.2

Two numbers, one rule: the Alabama Medicaid Agency's own 2026 chart states the children and pregnant-women groups at 146% FPL and parents at 18% FPL. Those are gross figures that already include the standard 5-percentage-point FPL disregard, and they net to the 141% and 13% effective levels shown on the CMS national table. If you see both sets of numbers, they describe the same limit.2

Parents and caretaker relatives: 13% of the poverty level

For readers of this guide, this is the pathway that matters before 65. A grandparent raising a grandchild qualifies for Alabama Medicaid, if at all, through the parent-and-caretaker-relative group, and Alabama covers that group at 13% FPL, one of the lowest parent thresholds in the nation. On the state's 2026 chart that works out to income after deductions of no more than $240/month for a household of one.2

The reason is federal mechanics, not a 2026 policy choice. Parents and caretaker relatives are a federally mandatory Medicaid group, but unlike children (mandatory at a floor of 133% FPL) and the ACA new adult group (effectively 138% FPL), they are covered only at the state's old cash-welfare standard: the AFDC income standard the state had in effect before welfare reform, converted to a MAGI equivalent. That standard was frozen in the mid-1990s and never re-indexed to inflation, which is why the figure sits at 13% of the poverty level instead of somewhere near it.6,7

There is no MAGI pathway for adults without dependent children

Alabama has not adopted the ACA Medicaid expansion. It is one of 10 states that have not.8 The expansion created the new adult group: people under 65, not pregnant, and not entitled to or enrolled in Medicare, with income up to an effective 138% FPL.9 In the 41 states including the District of Columbia that adopted it, that group is what covers a low-income adult who is not disabled and has no dependent children.8

Alabama did not adopt it, so there is no Medicaid pathway here for a non-disabled, non-pregnant adult without dependent children on the basis of income alone, at any income.2 Adults below the poverty level can fall into the coverage gap: too much income for Medicaid, too little for Marketplace premium subsidies.8

The MAGI groups have no asset test

Federal law bars a state from applying any asset or resource test to the MAGI groups. A parent or caretaker relative in Alabama is judged on income alone: a savings account, a second vehicle, or an investment does not count against them at any amount. The $2,000 limit described above never reaches them.3

That is not an Alabama choice either. The statute writes the no-asset-test rule for MAGI groups and then expressly excepts the SSI-related ABD and long-term-care pathways, which is exactly why the $2,000 test governs the numbers at the top of this page and nothing on this one.3

What changes at 65 in Alabama

In an expansion state, turning 65 closes the new adult group, because that group is written for people under 65 who are not entitled to or enrolled in Medicare.9 Alabama has no such group, so there is no 138% FPL adult benefit to lose here.8

What changes at 65 in Alabama runs the other way: the SSI-related aged, blind, and disabled pathway becomes available on the basis of age. Before 65, an Alabama adult who is not disabled, not pregnant, and not caring for a dependent child has no pathway at all. At 65, the ABD track opens.3,2

That track runs on different arithmetic. The income yardstick becomes the SSI Federal Benefit Rate, $994/month for an individual in 2026, or 300% of that rate ($2,982/month) for nursing-facility and waiver coverage.4 And a resource test appears, at the SSI standard of $2,000 for an individual.4,3

So the transition that catches Alabama families is about assets, not income. Under MAGI, the state looks at income and nothing else. On the ABD track, $10,000 in savings is $8,000 over the limit. The income never moved; the test did.3,4

The asset limit

The rest of this guide returns to the long-term-care and ABD track, where the $2,982/month cap and the asset limit below both apply.1

Alabama's program, administered by the Alabama Medicaid Agency, holds to the long-standing federal floor on countable assets. A single applicant for nursing-home or waiver coverage may keep no more than $2,000 in countable resources. When both spouses apply, the limit is $3,000.1

"Countable" is the word that carries the weight. Alabama, like every state, exempts a list of assets from the count: your home (subject to a federal equity cap), one vehicle, household goods and personal effects, and prepaid burial arrangements. So the $2,000 applies to things like bank accounts, a second car, and investments, not the roof over your head.1

This is a far tighter limit than some states allow. A handful of states have raised their asset limits well above the federal floor; Alabama has not. For most single applicants, qualifying means countable resources are down to $2,000 or less by the time coverage begins.1

The Alabama Medicaid income limit: the income cap and the Miller Trust

For nursing-facility and home-and-community-based waiver coverage, Alabama sets the 2026 income limit at $2,982/month for a single applicant. That figure is 300% of the SSI Federal Benefit Rate, which is $994 in 2026.1,4

Here is where Alabama differs sharply from spend-down states. Alabama is an income-cap state and does not run a medically needy program. In a spend-down state, income above the limit simply becomes a monthly amount you offset against medical bills, and you still qualify. Alabama has no such pathway. If your gross monthly income is above $2,982, you are over the cap, and there is no spending down the difference.1

The fix is a Qualified Income Trust, also called a Miller Trust. You establish the trust and deposit the portion of your income that exceeds the cap into it each month. Income held in a properly structured Miller Trust does not count toward the limit, so the applicant qualifies. The trust money is then used under strict rules (toward the cost of care, a spousal allowance, and the personal needs allowance), and on the recipient's death, the state is the first beneficiary up to the amount Medicaid paid.

How the Miller Trust works in practice is mechanical. Each month, the applicant deposits the portion of gross income that exceeds the $2,982 cap into the trust. That deposited income no longer counts toward the limit, so the applicant qualifies. The trustee then pays the trust funds out under strict rules, toward the cost of care, a spousal allowance, and the personal needs allowance, in that order.1,4

A Miller Trust must be drafted correctly and funded every month to do its job, so this is a step to set up with an elder-law attorney before applying, not after a denial.

Long-term care: what a nursing-home resident keeps

When Alabama Medicaid pays for nursing-facility care, the resident contributes almost all of their monthly income toward the cost of care. What they keep for themselves is the Personal Needs Allowance (PNA), money reserved for small personal expenses such as clothing, a haircut, or a phone. Alabama sets its PNA at $30/month, the federal minimum and the lowest amount a state is permitted to set.1,5

Some states keep their PNA well above the federal floor; Alabama keeps it at the floor. For a deeper look at how the allowance works and how it's calculated, see our explainer on the Medicaid personal needs allowance.

The five-year look-back

Alabama reviews asset transfers made in the 60 months before a long-term-care application.1,10 Giving away money or property for less than fair market value during that window, gifting a grandchild a down payment or signing a house over to a child for a dollar, can trigger a penalty period during which Medicaid won't pay for long-term-care services, even though you're otherwise eligible.

There are legitimate exceptions (transfers between spouses, transfers to a disabled child, certain caregiver-child home transfers) and legitimate planning approaches, but anything done inside the five-year window deserves an elder-law attorney's review first. If long-term care is on the horizon for someone in your family, talk to a professional before moving assets. For the broader toolkit, see our guide to Medicaid planning strategies.

Protecting the spouse who stays home

When one spouse needs long-term care and the other remains at home, federal spousal-impoverishment rules keep the at-home spouse from being left without resources. Alabama applies the federal figures for 2026:1

So a married couple is in a very different position from a single applicant. The community spouse can hold up to $162,660 in countable assets and keep a monthly income allowance up to $4,066.50 while the other spouse receives Medicaid-funded care.1

After death: estate recovery

Like every state, Alabama runs a Medicaid estate-recovery program. After a recipient who was 55 or older and received long-term-care services dies, the state pursues federally mandated repayment from the estate, with federal exceptions (a surviving spouse, or a minor, blind, or disabled child) and an undue-hardship waiver.1,11 For the state-specific rules, exemptions, and hardship process, see our guide to Alabama Medicaid estate recovery, and for how recovery works nationally and where families have room to plan, see our Medicaid estate recovery explainer.

How to apply in Alabama

Alabama's long-term-care Medicaid is run by the Alabama Medicaid Agency. There are two main ways for an elderly or disabled applicant to apply, online or by phone:

Long-term-care applicants also go through a level-of-care screening to confirm they need nursing-facility-level services. If your income is over the $2,982 cap, don't assume you're shut out. A Miller Trust is a recognized, routine route to qualify, and it's worth setting up before you apply rather than after a denial.1

Learn More

Find personalized help working through Alabama Medicaid eligibility and the Miller Trust route for your family at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.