Alabama Medicaid income limits work differently from most states: there is a hard ceiling, and going over it does not let you spend down to qualify. For long-term-care coverage in 2026, a single applicant's gross income must be at or below $2,982 a month, and the countable-asset limit is $2,000.
This guide walks through the 2026 income and asset rules for Alabama Medicaid for seniors and people with disabilities who need nursing-home or in-home long-term care. It covers 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.
The $2,000 asset limit
Alabama's Medicaid 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.
"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.
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.
How the income test works: 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.
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.
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.
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.
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. 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:
| Protection | 2026 Amount | What it does |
|---|---|---|
| Community Spouse Resource Allowance (CSRA) | Half the couple's countable assets, up to $162,660; minimum $32,532 | The most in countable assets the at-home spouse may keep, on top of the applicant's own $2,000. |
| Minimum Monthly Maintenance Needs Allowance (MMMNA) | Up to $4,066.50/month (effective 1/1/2026) | The most monthly income the at-home spouse may keep; income can be shifted from the applicant to reach it. |
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.
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. For how estate recovery works 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 through the Alabama Medicaid elderly and disabled application portal at eanddapplication.medicaid.alabama.gov.
- By phone at 1-800-362-1504.
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.
Frequently Asked Questions
For nursing-facility and home-and-community-based waiver coverage, the 2026 income limit is $2,982/month for a single applicant, set at 300% of the SSI Federal Benefit Rate ($994). Alabama is an income-cap state, so income above that figure does not qualify unless the excess is routed through a Miller Trust.
$2,000 in countable assets for a single long-term-care applicant, or $3,000 when both spouses apply. The home (subject to a federal equity cap), one vehicle, household goods, and prepaid burial arrangements are exempt from the count.
Yes, for applicants over the income cap. Alabama has no medically needy spend-down program, so an applicant whose gross income exceeds $2,982/month must establish a Qualified Income Trust and deposit the excess income into it each month to qualify for long-term-care Medicaid.
No. Alabama is an income-cap state, not a medically needy spend-down state. There is no monthly income spend-down for long-term-care Medicaid here; an over-income applicant uses a Miller Trust instead.
For 2026, the at-home (community) spouse can keep up to $162,660 in countable assets (the Community Spouse Resource Allowance, minimum $32,532) and a monthly income allowance up to $4,066.50 (the Minimum Monthly Maintenance Needs Allowance), on top of the applicant's own $2,000 limit.
A Personal Needs Allowance of $30/month, the federal minimum. The rest of the resident's monthly income goes toward the cost of care, after deductions for a community spouse and certain health-insurance premiums.
Learn More
- Medicaid Planning Strategies
- How Medicaid Estate Recovery Works
- The Medicaid Personal Needs Allowance, Explained
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.