Important Definitions

What follows are definitions and information about some of the most essential long-term and Medicaid planning terms, from long-term care insurance to “spend down.” Should you have questions about anything detailed below, do not hesitate to contact our firm. We have helped thousands of families protect assets while securing government benefits. 

Medicaid

Medicaid is a joint federal and state program that offers coverage for medical expenses, such as nursing home care, to individuals with low income and limited assets. Medicaid can also cover services related to disabilities or age-related conditions.

Medicaid Eligibility

Eligibility for Medicaid is determined based on your medical needs, income, and assets. 

To qualify, you must fall into one of the following categories:

• Children under the age of 19
• Pregnant women
• Parents or caretakers of children under 19
• Individuals with disabilities
• Adults 65 and older

Additionally, you must meet income and asset limits. These vary depending on the type of Medicaid benefits you are seeking, whether you are applying for yourself or with a spouse, and your eligibility for Social Security Income (SSI). Generally, the asset limits are in the thousands. This amount increases significantly for those seeking aged, blind, and disabled Medicaid. 

Medicaid Asset Exclusions

Medicaid asset exclusions are assets that the government does not count when determining eligibility for Medicaid. 

In Arkansas, these exclusions generally include:

• Homestead - Your home and all the property touching, up to a certain home equity interest limit ($730,000 as of 2025)
• Everything within your homestead - Your belongings
• Prepaid burial - Bought from and paid for at a funeral home with a goods and services contract showing what was purchased
• One vehicle - This includes anything on your personal property assessment, which could be your daily driver vehicle or the one with the highest value 

Medicaid Asset Inclusions

Medicaid asset inclusions are assets counted when determining eligibility for Medicaid. 

In Arkansas, these inclusions generally include:

• Life insurance cash value
• CDs
• IRAs
• Investment accounts (401K, mutual funds, stocks, etc.)
• Savings and checking accounts
• Non-excluded property
• Non-excluded vehicles

Long-Term Care (LTC) Insurance

Long-term care insurance is a type of insurance that covers the cost of long-term care services, such as nursing home care or in-home assistance. Often, it bridges the gap between what Medicaid does and does not cover. 

Look-Back Period

The look-back period is a length of time during which Medicaid officials examine your financial transactions to determine whether you have given away assets. In Arkansas, the look-back period is 60 months (5 years). Transactions during this period may be scrutinized. 

Gift 

In the context of estate planning (which is central to long-term care and Medicaid planning), a gift is when an individual transfers assets to someone else. 

Private Pay

Private pay refers to paying for long-term care services out of pocket, without the assistance of government programs like Medicaid. 

Spend Down

A “spend down” is a process in which you would deplete assets to meet Medicaid eligibility requirements. This may involve paying out-of-pocket for medical expenses or making certain purchases that are exempt from asset calculations.

Do You Have Additional Questions? Contact Us. 

If you have questions about Medicaid, Medicaid planning, or anything related to elder or estate law, our firm is here to help. Contact us today to request a free consultation. During this meeting, we can discuss your situation in detail, offer answers to questions, and outline the steps for partnering with AAPG Law. 

Give us a call at (501) 530-9670 or get in touch through our convenient online contact form. We proudly serve the entire state of Arkansas.