Long-Term Care Needs, Medicaid, and Home Care rules
As you look forward to your retirement years, Medicaid is one possible income source to help provide for future Long-Term Care needs. It’s possible to be Medicaid eligible and still protect your financial assets for future generations. There’s a secret to being Medicaid eligible though, and that is to plan ahead by more than five years, and to use the right legal documents in protecting your estate. Recently, we wrote a post on the pros and cons of home care versus long-term care. In today’s blog post we’ll look at Arizona’s Medicaid program and whether in-home care is feasible within the bounds of the AZ Medicare program. At Phelps LaClair, we’ve been offering our wisdom to help families plan ahead for a long time. More than 40 years, to be exact. We understand elder law, tax law, and estate planning. And we’d like to shed some light on Arizona’s Medicaid system and its rules regarding home care.
Arizona’s Medicaid program is called the Arizona Health Care Cost Containment System, or AHCCCS. It was founded in 1982 in order to bring stability to the state’s Medicaid program, which had previously been governed by individual counties. AHCCCS is a federal healthcare program that is funded both by the state and federal governments.
Qualifying for Arizona’s Medicaid (AHCCCS) Program
For the sake of our discussion on Medicaid and home care rules, we’re zeroing in on one qualification, that of income for residents who are older than 65. The government website explains the income limit in this way:
If your family’s income is at or below 138% of the Federal Poverty Level (FPL) ($16,753 per year for an individual in 2018, $34,638 for a family of four), you may qualify for AHCCCS.
Earned income (e.g., your wages earned for a service performed, or services exchanged for food, shelter, etc.) and unearned income (e.g., social security, VA benefits, worker’s comp payments, income from dividends, etc.) both count toward these limits.
Home Care Rules
Medicaid gets a bit more complicated when you add in the need for home care. If you or your spouse have long-term care needs, in order to qualify for long-term care services (including home care), you’ll most likely need to apply for a separate program from AHCCCS, called the Arizona Long Term Care System (ALTCS). To qualify for ALTCS, you need to either be blind or disabled, or you must need nursing home level care for your medical and physical needs; and meet the income qualifications, including having less than $2000.00 in resources (stocks, bonds, savings accounts, etc.). If you do qualify for ALTCS, you may also qualify for Personal Assistance Services (PAS) and be able to live in your home with assistance that is paid for through PAS. That assistance can range from household chores to personal care. To qualify, you must need help with daily life activities like getting dressed, eating, bathing, etc.
Estate Planning, Home Care, and Medicaid
How does all this talk about long-term care needs and Medicaid apply to Estate Planning? Using an Irrevocable Medicaid Family Protection Trust (MAPT), it is possible to transfer your assets, and even your primary residence, into the trust and continue to live at home and have access to your income. You do this by making the trust the permanent (irrevocable) “owner” of your assets—which means you are no longer the owner—and assigning a Trustee other than yourself to manage the trust. That trustee could be someone like a trusted adult child who will steward your assets on your behalf.
When it comes to Medicaid, because you have transferred your assets to the trust, they are no longer counted as your income. By setting in place a Medicaid Family Protection Trust to prepare for long-term care needs, you could still be eligible for Medicaid, and potentially, for the Personal Assistance Services as well. The key is to set in place a Medicaid Family Protection Trust well in advance, in order to avoid Medicaid’s look-back period, which is five years.
At Phelps LaClair, we care about families and we care about leaving a legacy for future generations. If you’d like to know more about how to be eligible for Medicaid and still protect your estate for your beneficiaries, feel free to contact one of our offices in Phoenix, Chandler, or Mesa, Arizona. As we mentioned earlier, we’ve been helping people build solid, secure estate plans for several generations. And the Medicaid Family Protection Trust is one of the tools in our toolbox that just might work for you and your family, as part of preparing for possible long-term care needs, without draining the finances of your estate. Contact us directly, or sign up for one of our upcoming free seminars to learn more about effective estate planning.
Images Used under creative commons license (Commercial Use) (10/22/18) (Pixabay) lecreusois