Long-Term Care Planning and ALTCS Applications

Why does Arizona have its own long term care system instead of Medicaid? Medicaid is a joint federal-state program, but in 1981, Arizona approved and funded its own program, called the Arizona Health Care Cost Containment System (AHCCCS). It is a prepaid managed care system under Medicaid.

In 1989 the Arizona Long Term Care System (ALTCS)—a division of AHCCS—was established. This office offers long term care, acute care and home-based services to the elderly and physically or developmentally disabled of Arizona who qualify for assistance. One of its purposes is to help limit costs of long term care and simplify the processes for residents needing long term care services.

To be eligible for benefits from Arizona’s long term care program, a person must meet both medical and financial requirements. Any person receiving benefits from the Medicaid program must re-qualify every year, because program requirements and living circumstances can change.

To be medically eligible for ALTCS, “a person shall have a nonpsychiatric medical condition or have a developmental disability [cognitive disability, cerebral palsy, seizure disorder, or autism, and who have significant impairment of their functional abilities] that, by itself or in combination with other medical conditions, necessitates the level of care that is provided in a nursing facility or intermediate care facility.”

This does not mean that the ALTCS applicant has to live in a nursing facility. “Level of care” refers to the intensity of medical care, not the location where it is provided. It means that the applicant’s need for medical care must be comparable to that provided in a nursing facility, but below an acute care setting (hospitalization or intense rehabilitation) and above a supervisory/personal care setting, intermittent outpatient medical intervention, or benevolent oversight.

Medical eligibility is determined by the Pre-Admission Screening (PAS) process. The PAS consists of a personal interview that takes place where the applicant resides (or over the telephone or via video conferencing) and a review of the applicant’s medical records. The assessor needs to see the applicant in their normal living environment to get an accurate picture of where they are medically and functionally. The PAS tool is the document the assessor uses to determine the functional, medical, nursing and social needs of the applicant.

Include the following and can change from year to year. Note: pre-nuptial agreements and community property agreements do not apply when considering financial requirements:

• Income of Single Person: limited to $2,742 per month
• Income of Married Person: one of the following must apply:
• Total income of both spouses is limited to $5,484 per month, OR
• Total income received by applicant plus half of income received in joint checks, is limited to $2,742.
• (Income includes Social Security pay-outs, pension money, annuities, disability insurance, and more).
• Resources for Single Person: limited to $2,000 in value.
• Resources for Married Person: For a married person applying solely, their spouse may keep half of the property of both. Their half cannot exceed $148,620 in value.

(Resources do not include: home (except a home in trust and home equity over $688,000), vehicle, burial arrangements, burial plot, household goods and personal possessions, or life insurance with cash value less than $1,500).

View AHCCCS Current Year Eligibility Requirements and Details

If you or a loved one is receiving benefits from Arizona’s Medicaid program, a share of cost and/or payment toward room and board may be required. If the ALTCS recipient is living in a nursing facility, ALTCS determines the “share of cost” based on the gross income of the ALTCS recipient minus certain deductions allowed under federal and state law, including:

• A personal needs allowance set by federal law
• Amounts for health insurance premiums paid by the recipient
• Amounts for medical expenses not covered by ALTCS (e.g. eyeglasses, hearing aids, and dental work),
• Community Spouse Monthly Income Allowance (if the spouse’s income is less than a federally determined minimum amount)

If the recipient is living in a residential facility, the ALTCS program contractor determines the room-and-board charge based on the recipient’s gross income.

If a share of cost or room-and-board charge is assessed, the recipient (or their agent, guardian, or conservator) will need to write a check from their income each month to pay the facility.

If the ALTCS recipient lives at home, they are not required to pay toward the cost of their care unless an income-only trust is necessary because their income exceeds the ALTCS limit.

During our initial consultation, our team determines the best way to develop a personalized long term care plan that includes options for protecting as much of your income and property as possible. Our strategy for preserving assets could include the following:

• Income Only Trust – a trust authorized under federal Medicaid law that allows an individual whose income exceeds the ALTCS limit, but who cannot afford to pay privately, to qualify and receive benefits. This is also called a Miller Trust after the court case that initially authorized these trusts.
• Special Needs Trust – this allows another person (the trustee) to manage the property of a beneficiary who has a disability; the beneficiary’s resources are protected even though they are receiving ALTCS benefits.
• Medicaid Annuity – a single premium annuity in some circumstances can be an easy way to preserve assets. While not commonly a viable option for single people, it can be very advantageous for married couples. The annuity turns resources into a stream of income.