Arizona Medicaid Income & Asset Limits for Nursing Homes & In-Home Long Term Care

Last updated: January 28, 2022

 

Arizona Medicaid Definition

In Arizona, Medicaid is called the Arizona Health Care Cost Containment System (AHCCCS). The program that provides long term care for the aged, blind, and disabled is called the Arizona Long Term Care System (ALTCS).

Medicaid is a jointly funded state and federal health care program for low-income individuals of all ages. While there are several different coverage groups, the focus of this page is strictly on Medicaid eligibility for elderly Arizona residents (aged 65 and older). Specifically, long term care is covered. In addition to nursing facility care, assisted living services, and adult foster care services, AZ Medicaid pays for non-medical services and supports to help frail seniors live at home or the home of a loved one.

  The American Council on Aging now offers a free, quick and easy AZ Medicaid eligibility test for seniors.

 

Income & Asset Limits for Eligibility

There are several different Medicaid long-term care programs for which Arizona seniors may be eligible. These programs have varying financial and medical eligibility requirements, as well as benefits. Further complicating eligibility are the facts that the criteria vary with marital status and that Arizona offers multiple pathways towards eligibility.

1) Institutional / Nursing Home Medicaid – This is an entitlement program; Anyone who is eligible will receive assistance. Benefits are provided only in nursing homes.

2) Home and Community Based Services (HCBS) – Although Arizona previously offered Home and Community Based Services (HCBS) Medicaid Waivers for its elderly population, the state no longer does. With Waivers, the number of participant slots was limited and wait lists could exist to receive services. Currently, long-term care services are provided at home, adult day care, adult foster care homes, or in assisted living residences via a managed care system. This allows program participants to receive all needed services via one administering agency. Unlike with Waivers, the managed care program does not have enrollment caps, which means there are no waiting lists to receive benefits. Learn more about Medicaid managed care.

3) Regular Medicaid / Aged Blind and Disabled – This is an entitlement program; Anyone who meets eligibility requirements is able to get benefits. Long-term care benefits, such as personal care assistance or adult day care, may be available.

The table below provides a quick reference to allow seniors to determine if they might be immediately eligible for long term care from an Arizona Medicaid program. Alternatively, one can take the Medicaid Eligibility TestIMPORTANT: Not meeting all of the criteria does not mean one is ineligible or cannot become eligible for Medicaid in Arizona. More.

2022 Arizona Medicaid Long Term Care Eligibility for Seniors
Type of Medicaid Single Married (both spouses applying) Married (one spouse applying)
Income Limit Asset Limit Level of Care Required Income Limit Asset Limit Level of Care Required Income Limit Asset Limit Level of Care Required
Institutional / Nursing Home Medicaid $2,523 / month* $2,000 Nursing Home $5,046 / month ($2,523 / month per spouse)* $4,000 ($2,000 per spouse) Nursing Home $2,523 / month for applicant* $2,000 for applicant & $137,400 for non-applicant Nursing Home
Home and Community Based Services $2,523 / month† $2,000 At Risk of Institutionalization $5,046 / month ($2,523 / month per spouse)† $4,000 ($2,000 per spouse) At Risk of Institutionalization $2,523 / month for applicant† $2,000 for applicant & $137,400 for non-applicant At Risk of Institutionalization
Regular Medicaid / Aged Blind and Disabled $1,133 / month (eff. 2/1/22 – 1/31/23) No limit Help with ADLs $1,526 / month (eff. 2/1/22 – 1/31/23) No limit Help with ADLs $1,526 / month (eff. 2/1/22 – 1/31/23) No limit Help with ADLs
*All of a beneficiary’s monthly income, with the exception of a personal needs allowance of $126.15 / month, Medicare premiums, and possibly a spousal income allowance for a non-applicant spouse, must go towards nursing home costs.

†Based on one’s living setting, a program beneficiary may not be able to keep monthly income up to this level.

‡Arizona is extremely unique in that it is the only state with no asset limit for the Aged, Blind, and Disabled pathway.

 

What Defines “Income”

Any income that a Medicaid applicant receives is counted towards the income limit. This income can come from any source. Examples include employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. An exception exists for Covid-19 stimulus checks and Holocaust restitution payments, which do not count as income, and therefore, do not impact one’s eligibility for Medicaid.

When only one spouse of a married couple applies for nursing home Medicaid or long-term home and community based services, only the income of the applicant is counted. This means the income of the non-applicant spouse is disregarded. The non-applicant spouse, however, may be entitled to a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their applicant spouse. The MMMNA is the minimum amount of monthly income a non-applicant spouse is said to require to avoid spousal impoverishment. In AZ, the MMMNA is $2,288.75 (effective 7/1/22 – 6/30/23). If a non-applicant’s monthly income falls under $2,288.75, income can be transferred to them from their applicant spouse, bringing their income up to $2,288.75.

In Arizona, a non-applicant spouse can further increase their monthly income allowance if their housing and utility costs exceed a “shelter standard” of $686.63 / month (effective 7/1/22 – 6/30/23). However, in 2022, a spousal income allowance cannot put a non-applicant’s income over $3,435 / month. This is the Maximum Monthly Maintenance Needs Allowance. More on how the spousal income allowance is calculated.

Income is counted differently when only one spouse applies for Regular Medicaid / Aged Blind and Disabled; The income of both the applicant spouse and the non-applicant spouse is calculated towards the applicant’s income eligibility. More on how Medicaid counts income.

 

What Defines “Assets”

Countable assets include cash, stocks, bonds, investments, credit union, savings, and checking accounts, and real estate in which one does not reside. There are also many assets that are considered exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, irrevocable burial trusts, and generally one’s primary home. For home exemption, the Medicaid applicant must in the home or have intent to return, and in 2022, their home equity interest cannot be greater than $636,000. Equity interest is the amount of the home’s value the Medicaid applicant owns. If a non-applicant spouse lives in the home, it is exempt regardless of any other circumstances.

 While one’s home is generally exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s estate recovery program. Following a long-term care Medicaid beneficiary’s death, Arizona’s Medicaid agency attempts reimbursement of care costs through whatever estate of the deceased still remains. This is often the home. Without proper planning strategies in place, the home will be used to reimburse Medicaid for providing care rather than going to family as inheritance.

All assets of a married couple are considered jointly owned regardless of the long-term care Medicaid program for which one is applying. However, spousal impoverishment rules permit the non-applicant spouse of a nursing home or long-term home and community based services applicant a Community Spouse Resource Allowance (CSRA). In AZ, the CSRA is called a Community Spouse Resource Deduction (CSRD). In 2022, the CSRD allows the community spouse (the non-applicant spouse) to retain 50% of the couples’ assets, up to a maximum of $137,400, as the chart indicates above. If the non-applicant’s half of the assets is under $27,480, 100% of the assets, up to $27,480 can be kept by the non-applicant.

Arizona has a 60-month Medicaid Look-Back Period that immediately precedes one’s Medicaid application date. During this period, Medicaid scrutinizes all asset transfers. If assets have been gifted or sold under fair market value, even unintentionally, it is a violation of the look-back rule. A penalty period of Medicaid ineligibility is calculated for persons who violate this rule.

 Non-Financial Eligibility Requirements – For Arizona long-term care Medicaid eligibility, an applicant must have a need for such care. For nursing home care, an applicant must require a nursing home level of care (NHLOC), and for home and community based services, an applicant must be at risk of institutionalization (i.e. nursing home). Furthermore, some benefits intended to prevent and / or delay nursing home placement may require additional eligibility criteria specific to the particular benefit. For instance, in order for AZ Medicaid to pay for respite care, it may be required that an applicant be unable to be left unsupervised for even short periods. For long-term care services via the Regular Medicaid program, a functional need with the activities of daily living is required, but a NHLOC is not necessarily required.

 

Qualifying When Over the Limits

For Arizona elderly residents (65 and over who do not meet the eligibility requirements in the table above, there are other ways to qualify for Medicaid.

1) Qualified Income Trusts (QIT’s) – Also called Miller Trusts, QITs are a type of Special Treatment Trusts (STT’s) for nursing home Medicaid and long-term home and community based services applicants who are over the income limit, but still cannot afford to pay for their long-term care. Specific to Arizona Medicaid, this type of trust is called an Income-Only Trust. It allows persons with “excess” income to still qualify for long-term care Medicaid, as money deposited into an irreversible QIT does not count towards Medicaid’s income limit. Irreversible means that once the trust has been established, it cannot be changed or canceled. A trustee is named to manage the trust and has legal control of trust funds. The money can only be used for very specific purposes, such as paying for long term care services / medical expenses accrued by the Medicaid enrollee. While income deposited in this account is exempt from Medicaid’s income limit, the deposited income is counted towards calculating one’s “Share of Cost”. This is a required contribution towards medical / care expenses. In most cases, there is only a share of cost if one resides in a nursing home facility. Furthermore, the Arizona Health Care Cost Containment System (AHCCCS) must be listed as the remainder beneficiary in the event there are any remaining funds upon the death of the Medicaid enrollee.

2) Asset Spend Down – Persons who have assets over Medicaid’s asset limit can still qualify for Medicaid by reducing countable assets. This can be done by “spending down” excess assets on non-countable ones, such as home modifications (wheelchair ramps, roll-in showers, and stair lifts), vehicle modifications (wheelchair lifts, adaptive control devices, and floor modifications to allow one to drive from a wheelchair) prepaying funeral and burial expenses, and paying off debt. Remember, assets cannot be gifted or sold under fair market value, as doing so violates Medicaid’s look back rule. It is recommended one keep documentation of how assets were spent as proof the look back rule was not violated.

3) Medicaid Planning – The majority of persons considering Medicaid are “over-income” or “over-asset” or both, but they still cannot afford their cost of care. For these persons, Medicaid planning exists. By working with a Medicaid planning professional, families can employ a variety of strategies to help them become Medicaid eligible, as well as to protect their home from Medicaid’s estate recovery program. Read more or connect with a Medicaid planner.

 

Specific Arizona Medicaid Programs

Arizona LTC Services (ALTCS) – This is an AZ Medicaid managed care program for those with long term care needs. The ALTCS program, sometimes called the Elderly and Physical Disability (EPD) program, will pay for nursing home care, but also for some care in beneficiaries’ homes, adult foster care homes, or in assisted living residences. Program beneficiaries who live at home are given the option to self-direct their own care via Agency with Choice (AWC) or Self Directed Attendant Care (SDAC). These options allow them to hire their own attendant / personal care provider rather than the Medicaid program assigning a caregiver to them. This includes the ability to hire family members

 

How to Apply for Arizona Medicaid

For more information or to apply for nursing home Medicaid or long-term care home and community based services, persons should contact their local Arizona Long Term Care System (ALTCS) Office. At the time of this writing, there is not an online application for these programs. However, seniors who are strictly applying for medical assistance, rather than long-term care, and do not have a nursing home level of care need, can apply online on the Arizona Health Care Cost Containment System website.

For non-state specific information about the application process for Medicaid, click here.

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