Statistics show that about half of all people reaching sixty-five
will reside in a nursing home at some time in their lives. In a
perfect world, the person would be covered by nursing home insurance,
but for those who are not, the earlier in the aging process that the
family analyzes its financial situation and reaches a clear
understanding of asset protection planning techniques, the greater the
likelihood that assets can be preserved. Medicaid (in Arizona we
operate under a special form of Medicaid called the Arizona Health
Care Cost Containment System, (AHCCCS), and its subsection, Arizona
Long Term Care System, (ALTCS), is a needs-based program that pays for
individuals in nursing homes. The applicant must meet certain medical
and financial criteria, and be a citizen of the United States or
resident legal alien. There are different rules for single people and
married people. The timing of the application for assistance with long
term care under ALTCS is also important. Some planning procedures
cannot be initiated after application or after the individual has been
in the nursing home for an extended period of time.
In Arizona the applicant cannot have countable assets in excess of
$2,000.00. If married, the spouse cannot have countable assets in
excess of $99,450.00. Determining what assets are countable is the
primary job that an Elder Law Attorney must handle in assisting
families. Homestead real property, vehicles, nominal insurance, and
burial arrangements, as well as several other items, are not countable
assets. The state will try to be reimbursed for the funds they spent
for nursing home care if there is a home involved but only if the
nursing home spouse is the last to die.
In Arizona, if the gross monthly income of the applicant exceeds
$1,809.00, it is necessary to set up an Irrevocable Income Only
Medicaid Trust to hold and distribute the income of the applicant to
conform to the income cap rule. This is complicated and should not be
attempted without the assistance of an Elder Law Attorney who
concentrates in Medicaid qualification.
The applicant for Medicaid (ALTCS) assistance can't simply give the
excess assets away. Congress saw a need to plug this possible ability
to give your children all your money and then have the government pay
for your nursing home. They established transfer rules which apply
consequences for this transference. If the applicant or the spouse
transfers assets for other than fair market value, the applicant will
be ineligible for Medicaid (ALTCS) unless the transfer was made more
than 60 months prior to application. The period of ineligibility is
determined by dividing the gift by the cost to ALTCS of one month in a
nursing home (currently S4,507.06 in Pima County). That period of
ineligibility starts when the applicant applies and is otherwise
eligible. There are strategies to be used but it is imperative that
you consult with an attorney knowledgeable in the area of Medicaid (ALTCS)
prior to and dispersion of assets.
The Medicaid (ALTCS) rules and the dollar amounts used in
eligibility determinations are constantly changing. Therefore, the
dollar values given here should be used as approximations only because
they probably will have changed by the time you read this. Changes in
the rules regarding qualification may or may not be retroactive. It is
the law in effect at the time of the application that controls.
Therefore, if a plan has been devised for you which does not involve
immediate application for Medicaid (ALTCS), it is imperative that your
situation be reviewed on an annual basis.
Under current law, an experienced asset protection planning
attorney can assist in legally rearranging the assets to make a
married person eligible for Medicaid (ALTCS) almost immediately while
preserving a maximum in assets and income for the spouse remaining in
the community! Also, with a single person, up to one-half of the
assets can be sheltered legally with proper planning.
