As average life expectancy increases, so does the likelihood that senior citizens will need long-term nursing care. That prospect engenders fear that personal financial resources will be inadequate to cover the cost of care or will be consumed in providing it, leaving a spouse destitute and/or no assets to pass on at death. A fortunate few have long-term care insurance. For others, federal Medicaid administered by the state under a cost sharing arrangement provides assistance if certain qualifications are met.
The Arizona Long-Term Care System (ALTCS) is Arizona's Medicaid program that provides nursing-home benefits to elderly, developmentally-disabled, and physically-disabled people that do not have sufficient resources or income to pay for their own care. Compared to Medicare, which may pay for some nursing home benefits, Medicaid pays for many more of the costs associated with nursing homes.
In order to become ALTCS members, applicants must have less than a maximum amount of Income, fewer than a maximum amount of non-exempt assets (Resources), and not transfer Resources for less than fair market value during a specific window of time (Look-back Period). ALTCS, however, is not without cost to an ALTCS member. Depending upon a member's ability to pay, he/she is required to pay part of the costs associated with his/her care (Share of Cost). These maximum amounts of Income and Resources vary substantially depending upon the circumstances of the ALTCS member, as do Look-back Periods and Shares of Cost.
For ALTCS purposes, Income includes cash, currency, checks, and money orders that a person can use to obtain food, clothing, or shelter. Income also includes in-kind transfers of food, clothing, shelter, etc.
The maximum amount of monthly Income that a person is permitted to receive while still being eligible for ALTCS is $2,022 in Arizona as of 2010. However, a properly established Miller or qualified income trust (QIT), to which a person's Income in excess of the permitted amount is paid, can allow a person to qualify for ALTCS. It is important to note that while the ALTCS member is living, ALTCS will regularly draw from the QIT to pay for the member's care expenses. Upon the member's death, ALTCS will withdraw the corpus of the trust for reimbursement.
These Income limitations only apply to ALTCS members. If an ALTCS member's spouse is not also an ALTCS member, the spouse may keep all of his/her own Income.
For a person seeking ALTCS eligibility, there are also limits on the value of the Resources that person owns. For ALTCS purposes, Resources are items of real or personal property, including cash, which may be used to meet the person's need for food or shelter. If the person seeking ALTCS coverage is unmarried, that person is only permitted to retain $2,000 of non-exempt Resources. However, if the person seeking ALTCS coverage is married, and if that person's spouse does not need ALTCS services, as of 2010, the spouse can retain $109,560 in non-exempt Resources in addition to the exempt Resources.
There are a number of different categories of Resources that are exempt and which a person seeking ALTCS coverage or spouse may retain, such as homes with less than $500,000 in equity, cars, furnishings, burial plots.
ALTCS imposes restrictions on transfers of Resources in an effort to thwart the attempts of senior citizens to reduce their Resources in order to become financially eligible for ALTCS, such as giving Resources to their children or selling Resources (usually to family members) for substantially less than their fair market values. However, these transfer restrictions are not absolute; rather, they are limited to a 60-month time period, in which ALTCS officials can scrutinize the transfers of person's Resources.
If transfers are made during the Look-back Period, ALTCS uses a formula that takes into account the value of transfers and divides that number by the state-determined monthly cost of nursing homes to determine the period for which a person will be deemed ineligible. In Arizona, the monthly cost of nursing homes varies from year to year and county to county, but is roughly $6,000 as of 2010.
Share of Cost
ALTCS pays for expenses in excess of a member's share of cost, which depends upon his or her income. An ALTCS member who receives Home and Community Based Services (HCBS) while residing at home and does not benefit from an income-only trust need not pay a share of cost and is permitted to retain a Personal Needs Allowance equaling the maximum allowed income amount ($2,022 in 2010). However, the share of cost for an ALTCS member residing in long-term care facility is determined on a month-by-month basis but permits him/her to retain a minimum Personal Needs Allowance equalling 15% of the Federal Benefit Rate (approximately $100 in 2010).
Persons concerned about the possible impact of long-term care expenses on themselves and family and who are or may become eligible for ALTCS assistance should start planning early in order to to be prepared to work within the ALTCS rules when and if the need arises.
This brief overview of some important considerations associated with Arizona Medicaid eligibility is by no means comprehensive. Much more detailed information about the requirements related to AHCCSS eligibility be found at Arizona Health Care Cost Containment System's (AHCCCS) website. Always seek the advice of a competent professional when making important financial and legal decisions.