Medicaid is a health care program for low-income individuals of all ages. While there are several different coverage groups, the focus here is on long-term care Medicaid eligibility for elderly Arizona residents (aged 65 and older). 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. There are three categories of Medicaid long-term care programs for which Arizona seniors may be eligible.
1) Institutional / Nursing Home Medicaid – An entitlement; 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. Instead, 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 HCBS Waivers, the managed care program does not have enrollment caps (limited participant slots), which means there are no waiting lists to receive benefits.
3) Regular Medicaid / Aged Blind and Disabled – An entitlement; 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.
In Arizona, Medicaid is called the Arizona Health Care Cost Containment System (AHCCCS). The program that provides long-term care for elderly, blind, and disabled persons is called the Arizona Long Term Care System (ALTCS). While Medicaid is jointly funded by the state and federal government, it is administered by the state.
The American Council on Aging now offers a free, quick and easy AZ Medicaid Eligibility Test for seniors.
The three categories of Medicaid long-term care programs have varying financial and medical eligibility requirements. Further complicating eligibility is that the financial criteria change annually, varies with marital status, and that Arizona offers multiple pathways towards eligibility.
Simplified Eligibility Criteria: Single Nursing Home Applicant
Arizona seniors must have limited income and assets, and a medical need to qualify for Medicaid long-term care. In 2024, a single Nursing Home Medicaid applicant must meet the following criteria: 1) Income under $2,829 / month 2) Assets under $2,000 3) Require a Nursing Home Level of Care.
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 Test. IMPORTANT: Not meeting all of the criteria does not mean one is ineligible or cannot become eligible for Medicaid in Arizona. More.
| 2024 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 | $2,829 / month* | $2,000 | Nursing Home | $5,658 / month ($2,829 / month per spouse)* | $4,000 ($2,000 per spouse) | Nursing Home | $2,829 / month for applicant* | $2,000 for applicant & $154,140 for non-applicant | Nursing Home |
| Home and Community Based Services | $2,829 / month† | $2,000 | At Risk of Institutionalization | $5,658 / month ($2,829 / month per spouse)† | $4,000 ($2,000 per spouse) | At Risk of Institutionalization | $2,829 / month for applicant† | $2,000 for applicant & $154,140 for non-applicant | At Risk of Institutionalization |
| Regular Medicaid / Aged Blind and Disabled | $1,255 / month (eff. 2/1/24 – 1/31/25) | No limit | Help with ADLs | $1,704 / month (eff. 2/1/24 – 1/31/25) | No limit | Help with ADLs | $1,704 / month (eff. 2/1/24 – 1/31/25) | No limit | Help with ADLs |
*All of a beneficiary’s monthly income, with the exception of a Personal Needs Allowance of $141.45 / month, Medicare premiums, and possibly a Needs Allowance for a non-applicant spouse, must go towards nursing home costs. This is called a Patient Liability.
†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 only one of two states with no asset limit for the Regular Medicaid / Aged, Blind, and Disabled pathway
Countable vs. Non-Countable Income
Nearly any income from any source that a Medicaid applicant receives is counted towards the income limit. Examples include employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. Nationally, Holocaust restitution payments are not counted as income. Furthermore, in AZ, the VA Aid & Attendance or Housebound Pensions, which are above and beyond the Basic VA Pension, do not count as income.
Treatment of Income for a Couple
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 $2,555 (eff. 7/1/24 – 6/30/25). If a non-applicant’s monthly income falls under $2,555, income can be transferred to them from their applicant spouse, bringing their income up to $2,555 / month. In Arizona, a non-applicant spouse can further increase their monthly income allowance if their housing and utility costs exceed a “shelter standard” of $766.50 / month (eff. 7/1/24 – 6/30/25). However, in 2024, a Spousal Income Allowance cannot push a non-applicant’s total income over $3,853.50 / 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. Furthermore, there is no Monthly Maintenance Needs Allowance for a non-applicant spouse. More on how Medicaid counts income.
Countable vs. Non-Countable Assets
The value of countable assets are added together and count towards the asset limit. This includes cash, stocks, bonds, investments, bank accounts (credit union, savings, and checking), and real estate in which one does not reside. In Arizona, IRA’s / 401K’s are also counted. There are also many assets that are considered exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, irrevocable burial trusts up to $9,000, and generally one’s primary home.
Treatment of Assets for a Couple
All assets of a married couple are considered jointly owned. This is true regardless of the long-term care Medicaid program for which one is applying and regardless of if one or both spouses are applicants. However, Spousal Impoverishment Rules permit the non-applicant spouse of a Nursing Home Medicaid or Home and Community Based Services Medicaid applicant a Community Spouse Resource Allowance (CSRA). In AZ, the CSRA is called a Community Spouse Resource Deduction (CSRD).
In 2024, the CSRD allows the community spouse (the non-applicant spouse) to retain 50% of the couple’s assets, up to a maximum of $154,140. If the non-applicant’s portion of the assets is under $30,828, 100% of the assets, up to $30,828 can be kept by the non-applicant.
Medicaid’s Look-Back Rule
Arizona has a 60-month Medicaid Look-Back Period that immediately precedes one’s Nursing Home or Home and Community Based Services Medicaid application date. During the “look back”, 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. There is no Look-Back Rule for Regular Medicaid.
The U.S. Federal Gift Tax Rule does not extend to Medicaid eligibility. In 2024, this rule allows one to gift up to $18,000 per recipient without filing a Gift Tax Return. Gifting under this rule is a violation of Medicaid’s Look-Back Period.
For home exemption, the Medicaid applicant or their spouse must live in their home. If there is no spouse in the home, there is a home equity interest limit of $713,000 (in 2024). Home equity is the value of the home, minus any outstanding debt against it. Equity interest is the amount of home equity owned by the applicant. Furthermore, if there is not a spouse in the home, and the Medicaid applicant does not live there, the applicant must have Intent to Return. For Regular Medicaid, there is no home equity interest limit. Other exemptions exist.
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.
An applicant must have a medical need for Medicaid long-term 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 (ADLs) is required, but a NHLOC is not necessarily required.
For Arizona elderly residents (aged 65 and over) who do not meet the financial eligibility requirements above, there are other ways to qualify for Medicaid.
1) Qualified Income Trusts (QIT’s) – QITs are a type of Special Treatment Trusts (STT’s) that allow Medicaid Nursing Home and Medicaid Home and Community Based Services applicants who are over the income limit to still become income-eligible. Also called Miller Trusts, or specific to Arizona Medicaid, Income-Only Trusts, persons deposit their “excess” income into the irreversible trust and it no longer counts towards Medicaid’s income limit. Irreversible means that the terms of the trust 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 become asset-eligible 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 this rule was not violated.
Our AZ Medicaid Spend Down Calculator can assist persons in determining if they might have a spend down, and if so, provide an estimate of the amount.
3) Medicaid Planning – The majority of persons considering Medicaid are “over-income” and / or “over-asset”, but they still cannot afford their cost of long-term 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. Connect with a Medicaid Planner.
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.
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. Currently, 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.
Prior to applying for Medicaid, it is imperative that Arizona seniors be certain that all eligibility requirements discussed above are met. If one is over the income and / or asset limit(s), or are unsure if they meet the eligibility criteria, Medicaid planning can be invaluable. The application process, which can be lengthy, is also complicated. Familiarizing oneself with general information about the application process for long-term care Medicaid can be helpful.