Navigating Long-Term Care in Arkansas

Arkansas participates in the federal/state partnership program providing owners of qualified LTC Insurance dollar-for-dollar asset protection from extended health care costs. The state has many care options and available insurance solutions.

There are a wide variety of care options available in Arkansas for those who require long-term health care services, including 

• adult day care centers
• assisted living facilities
• continuing care retirement communities
• home health care providers
• memory care facilities
• rehabilitation facilities
• traditional nursing homes

While many qualified care providers are available throughout Arkansas, the costs are rising due to the increasing demand. 

Several insurance solutions are available to safeguard income and assets from the high costs and burdens of aging. Plus, all tax-qualified Long-Term Care Insurance policies in Arkansas have various consumer protections in addition to available tax benefits.

Federal Partnership Program

The State of Arkansas participates in the federal/state partnership program. The program was authorized when the federal Deficit Reduction Act of 2005 became law. It provides consumers with additional “dollar-for-dollar” asset protection if they exhaust the benefits from their qualified long-term care policy.

This “dollar-for-dollar asset protection” or “asset disregard” will impact the spend-down requirements if you exhaust the benefits from the policy. If you have a qualified Arkansas Partnership Long-Term Care insurance policy and exhaust all of your benefits you are able to protect your estate, based on the total amount of benefits paid by the policy, and still qualify for Medicaid.

Policy Example

For example, your policy pays out $375,000 in benefits but you are still alive and require care. You earn a Medicaid asset disregard that allows you to protect that same amount over the asset level you would otherwise be forced to meet in order to be eligible for Medicaid’s Long-Term Care benefit. The Partnership Program also protects those assets after death from Medicaid estate recovery.

Reciprocity

Most states have reciprocity with other states' long-term-care partnership programs including Arkansas.

Medicaid

The Arkansas Medicaid program will pay for long-term health care if an individual has little or no income and assets. The Long-Term Care Medicaid spend down is $2,000. A spouse’s minimum asset allowance is a minimum of $27,480 up to a maximum of one-half of countable assets up to $137,400. Your spouse’s minimum monthly income allowance is $2,177.50 * The home equity limit is $636,000.

For more information about the Medicaid program visit www.medicaid.gov

Arkansas Medicaid Estate Recovery Program

When a person applies for Medicaid and requires long-term services and supports, their estate will be subject to the Medicaid Estate Recovery Program, otherwise known as MERP.

Under the Arkansas Estate Recovery Program, the assets subject to recovery will include your home and other real estate, bank accounts, other financial assets, vehicles, cash, and even household goods.  

Remember, Medicaid will provide long-term care services only if you have little or no income and assets. However, the state will never require a living spouse to move out of their home. 

The Arkansas Department of Human Services (DHS) must file a claim against the estate upon death. When the Medicaid recipient dies, DHS will file a claim against the estate. The judge will decide the amount to be recovered by the state. If it doesn't go to probate, DHS issues a demand notice with the county clerk's office requiring the county clerk to notify DHS if the house is sold or goes to probate, at which time DHS will file a claim to obtain recovery.

The state may "look back" up to 60 months before application for Medicaid long-term care services to determine when income was reduced and resources were transferred.

If a person had a qualified Partnership Long-Term Care Insurance policy, the total amount of benefits paid by the policy would be sheltered from asset recovery. 

You can learn more here - Your_Guide_to_Medicaid_Estate_Recovery_in_Arkansas.pdf  

State Resources for Aging and Long-Term Care in Arkansas 

There are a variety of state resources available to help residents and their families with issues of aging and long-term health care. Many of these services benefit low-income families. 

• Arkansas Association of Area Agencies on Aging  - 866-379-3901

There are eight agencies across Arkansas helping older people with available resources. The agency offers a variety of information and services on long-term care planning, nursing home care, and access to available government benefits.

In addition to providing information and assistance, the agencies offer home-delivered and congregate meals, non-emergency medical transportation, and personal care services. The goal is to help older residents delay or avoid nursing home care. 

Counseling is available to assist older Arkansans, and their families evaluate long-term health care needs. The agency will connect residents with available financial assistance and access to the Arkansas Long-Term Care Ombudsman services. 

• Arkansas Community Action Agencies Association, Inc.  - 501-372-0807

The mission is to provide education, advocacy, and a unified voice for Community Action Agencies to reduce poverty and promote thriving communities in Arkansas. The association is a hub of 14 community-based private, nonprofit organizations that assist low- to moderate-income individuals across the state.

Various programs include meal delivery, non-emergency medical transportation, utility bill assistance, weatherization for older homeowners and renters, and counseling on long-term care services. 

• Arkansas Seniors Health Insurance Information Program - 800-224-6330

The program helps all Medicare-eligible individuals obtain accurate and objective health insurance information to assist state residents in making informed health coverage decisions. SHIIP counseling also helps individuals understand their rights and protections under their Medicare coverage.

The staff is trained to answer questions about Medicare benefits and related programs, Medicaid, and Long-Term Care Insurance. The staff can also help seniors understand and reconcile their medical bills and dispute denied claims.  

• Arkansas Department of Veterans Affairs - 501-683-2382

Veterans have access to programs and services that can assist them and their families as they get older. The Arkansas Department of Veterans Affairs provides information and advocacy to qualifying veterans, including their spouses. 

Available benefits for qualifying veterans include nursing home care, Aid and Attendance or Housebound benefits, pension, general health care services, and burial honors. 

Rate Stability Rules

In addition, Arkansas consumers enjoy additional peace-of-mind as the state has adopted Long-Term Care Insurance Rate Stability Rules.  These rules, developed the National Association of Insurance Commissioners, makes it much harder for an insurance company to get an approved rate increase.

Products Approved in Arkansas

A variety of affordable products are approved in Arkansas for Long-Term Care planning. These include traditional partnership certified policies, limited-duration policies and asset-based “hybrid” plans.

Tax Incentives

The state of Arkansas permits the same tax deduction as is allowed for federal income tax purposes for premiums paid for the purchase of qualified LTC insurance. The federal tax incentives also apply.

Reverse Mortgages in Arkansas

Reverse mortgages are available in Arkansas. A reverse mortgage is a home equity loan where the borrower does not have to make payments.

This type of mortgage can increase monthly income, eliminate mortgage payments, and even fund Long-Term Care Insurance. However, Arkansas has many rules on these mortgage products, and you should seek the help of a qualified and licensed mortgage broker. 

If you have significant equity in your home and you and your spouse are at least 62 years old, you can get a reverse mortgage to turn your equity into funding long-term health care, pay for an LTC Insurance policy, pay bills and add to your retirement lifestyle.

The home must be the principal residence without any tax liens. 

Learn more about reverse mortgages by clicking here.

_{*The federal government sets a new minimum and maximum amounts each year, but states can set their own minimum requirements at any level between the federal limits. This information is based on the best available sources.}