BackALTCS, What Is It And How Can It Benefit You?
Article submitted by Catherine Leas, Attorney of Law.
For more information, she can be reached at 623-875-9502.
One of the most frightening experiences faced by older adults is loss of health, independence, and retirement savings. Too few people have long term care insurance or sufficient retirement savings to pay for long term care. For those who are eligible, however, long term care benefits are available from Arizona Long Term Care System (ALTCS, pronounced "All-Tex"), which is known as Medicaid in most states. ALTCS covers long term care costs for those who are medically and financially eligible.
Medical eligibility is based upon the applicant's need for assistance with the basic activities of daily living. The test performed by ALTCS to assess medical eligibility is called a PAS (pre-assessment screen).
Income eligibility limit is $1,692 (monthly) for a single applicant. A married applicant is eligible if he/she either has no more than $1,692/mo. in the applicant's name or if the couple's average monthly income is no more than $1,692. However, the vast majority of applicants that exceed the income eligibility limit can set up a "Miller" Trust to qualify.
Both single and married individuals can only have $2,000 in countable resources, but can own unlimited excluded resources. However, the applicant's spouse (aka "community spouse") can keep countable resources up to the amount of the Community Spouse Resource Deduction (CSRD), which varies from case to case. Countable resources include all liquid funds, but also include assets such as a second home and the cash value of life insurance policies. Excluded resources include the primary residence, furniture and furnishings, a car, tangible personal belongings, burial plots, burial savings accounts, and prepaid burial plans. ALTCS counts both spouses' resources regardless of whether they are community, joint or sole and separate property.
The CSRD is calculated by taking one-half of the total countable resources held by either or both spouses as of the "snapshot date", and then by applying a minimum ($18,552) and a maximum ($92,760). The "snapshot date" is the month in which the applicant was first place in a care facility outside the home for 30 days or more or it's the month in which the applicant is determined to be at risk of institutionalization. The resource assessment is which is the process by which ALTCS determines the CSRD figure, and many spouses apply for the resource assessment just to know at what point they can apply for benefits.
Whether single or married, the applicant and/or spouse can engage in some planning in order to preserve resources, all of which can primarily benefit the community spouse. The community spouse may convert countable resources to monthly income by purchasing a single premium irrevocable immediate annuity in his/her name. One word of caution: beware of "free" seminars offered to retirees promoting opportunities to take advantage of "secret" loopholes in the Medicaid program that permit you to avoid ever having to pay for care. Annuities are no secret to elder law attorneys. More importantly, they aren't always the best planning options and, if they are needed, they can be purchased just prior to applying for benefits. The community spouse can also spend down by investing money in the home, paying off the mortgage, prepaying burial planning, or by trading in an older car for a newer model. Gifting is yet another alternative; however, if property is gifted or transferred less than three years prior to applying for ALTCS (five years if to or from a trust), then a penalty may be enforced during which the applicant cannot apply for benefits. Therefore, the rules regarding transfers must be understood and carefully followed if this option is exercised.
These are just general rules that are subject to change concerning a government program that is extremely complicated. The best way to understand your options is to arm yourself with information concerning long term care planning and the law.