We have created the 2018 ALTCS guide to help prepare individuals that are applying for long term health care in Arizona. Last year 79% of ALTCS applicants were denied long-term coverage, but with the right preparations these eligibility issues can be overcome.
This guide is for informational purposes, a qualified Elder Law Attorney will be able to provide more concrete guidance on how you can accomplish your planning goals with as little delay as possible.
Last year, 79% of ALTCS applicants were denied eligibility for long-term care coverage. Although this denial rate is disturbingly high, individuals might over- come eligibility issues by making simple preparations. To help with these preparations, we created this brief but informative guide on the ALTCS benefit.
While this guide is for informational purposes only, a qualified Elder Law attorney might provide more concrete guidance on how you can accomplish your planning goals with as little delay possible. At JacksonWhite, you will find a team of Elder Law attorneys, social workers, and benefit processors who work together to satisfy whatever long-term health care needs you may have.
As a full service law firm, JacksonWhite is equipped to assist you with many other legal issues, ranging from estate planning to probate. We encourage you to call us for a free benefit analysis to help you identify what options are available to you.
Our website, www.ArizonaSeniorLaw.com, provides detailed information on ALTCS eligibility, Veterans benefits, estate planning, probate, special needs trusts, advance directives, guardianships, and conservatorships. In an effort to provide visitors with accurate and complete information, our website is regularly updated with blogs, newsletters, and answers to fre- quently asked questions.
With tools like this guide and our website, our hope is to provide you with access to the knowledge and answers you need to make this difficult process just a little bit easier. If you have more specific questions about the content in this guide or other Elder Law issues, please do not hesitate to contact the Elder Law department at JacksonWhite. Our qualified team is readily available to help you.
The truth is, an individual may have to confront many tough questions as he or she makes these important legal and financial preparations. But with an affordable, qualified estate planning attorney by their side that can answer questions and develop strategies that are best suited for a person’s particular situation, he or she will find a sense of security that comes from having a purposeful plan.
ALTCS and Financing Long-Term Care
Arizona Long-Term Care System, or ALTCS, is a branch of Arizona’s Medicaid program that covers long-term health care for qualifying individuals. Despite the similarity in titles, Medicaid is very different from Medicare, and the two should not be confused. Above all else, ALTCS differs from Medicare because it is needs based, meaning that only those who meet strict eligibility requirements qualify for the benefit.
Transitioning a family member through levels of care presents a number of difficult decisions.The most common question that arises during this time is: How will we pay for long-term health care? With in-home care costing around $18-$25 per hour and skilled nursing communities costing as much as $8,500 per month, it is no won- der so many people fear they will be unable to afford the care they need. Further, when looking into payment options, many individuals find their alternatives are quite limited. Understanding the limits of coverage with one’s current benefits will help an individual identify the need for ALTCS.
Long-term care insurance can be quite helpful in limited situations. But because only healthy individuals who can afford premiums can obtain coverage, long-term care insurance is often not a viable option for people who need immediate care. ALTCS, on the other hand, may provide an excellent alternative to those who are in poor health or cannot afford the premiums. It is always important to confirm that the daily rate covers the anticipated costs.
Some people fear that their only option is to pay for long-term health care from their personal savings. While this may be true for some individuals, those who have only limited funds should always consider other alternatives. Particularly for individuals with a well spouse or a disabled child, other solutions may be available. Individuals shouldn’t burn through all their savings before deciding they need help.
Medicare is the national health care entitlement program that insures people 65 years of age or older or who have certain disabilities.While Medicare may cover nursing home costs for short periods of time, it never covers long- term health care. Individuals who need assistance with long- term health care should apply for ALTCS.The cost of long- term care is staggering, but understanding the benefits to help with those costs is vital to your receiving continued benefits.
Services ALTCS Offers
The ALTCS benefit is unique to Arizona, and is based on a managed care concept that enables the state to pay for a variety of services. In addition to helping with skilled nursing and nursing home costs, ALTCS covers certain in-home services as well.These home and community services are expensive for the state to provide and are oftentimes preferable to individuals as well.As such,it is often in everyone’s best interest to give ALTCS members in-home care for as long as possible.
Unfortunately, many people wait too long to apply for the ALTCS benefit and end up jeopardizing their opportunity to take advantage of in-home care. Proactive in- dividuals, on the other hand, might obtain in-home care that helps them postpone moving to a community or facility. Individuals should begin preparing for the ALTCS benefit at the first signs of needing long-term care.
Benefits which may be available:
- Full Coverage of Acute Care Services: This includes doctors, hospitalization, reduced prescription costs, lab work, x-rays, tests, and specialist treatments.
- Alternative Facility Care: This includes care provided in a licensed nursing facility, residential care facility, rehabilitation care facility, assisted living center, or group home.
- Services for Developmentally Disabled Adults and Children: This benefit includes specialized care for developmentally disabled adults and children.
- Home and Community Based Services: This includes home day care, personal and respite care, medical transportation, mental health services, homemaker services, attendant care, and home health aides.
Care Covered by ALTCS
The ALTCS benefit provides members with coverage for the following types of living arrangements.
In-home care can be a wonderful option for patients who are not yet ready to move into an in-patient or assisted living facility. A variety of in-home services are available, including home health nursing, pain management, day-care, delivered meals, homemaker services, and rehabilitation.
Those who go this route can rely on one company to handle the entire spectrum of in-home care, obtain services from several providers, or even rely on a family member to act as caregiver. Privately paying and using insurance are options to pay for home care.
Adult Day Health Care
Adult day health care centers provide a daily routine and a sense of belong- ing that most patients find comforting. As an added benefit, these centers also provide respite to caregivers so they can handle other responsibilities. Some of these facilities even provide activities and supervision for up to 12 hours per day.
While adult day health care centers generally do not have a full medical staff on site, many of them do have trained nurses.
Group homes or assisted living homes provide around-the-clock care for patients in a home-like setting but admit only a handful of residents at a time. As such, they provide a good option for people who do not like crowds.
Group homes are typically located in a residential neighborhood, and residents are encouraged to participate in daily activities, although they are not required to do so. They are regulated by the Department of Health Services and must adhere to specific rules.
Assisted Living Centers
Assisted living centers tend to be a good fit for patients in the early to middle stages of their progressive illness because residents are encouraged to maintain a certain level of independence.These facilities typically have many private rooms offered and can serve a large number of residents.
They also offer a wide range of services, including assistance with grooming, medication administration, meal reminders, and cleaning services.
Skilled Nursing Facilities
Skilled nursing facilities seem to work well for patients in the later stages of their progressive illness. In this setting, patients who do not require full hos- pitalization can nevertheless receive routine medical supervision. These facilities typically provide skilled medical care provided by a staff of registered nurses, physical therapists, occupational therapists, on-call physicians, and custodial care that assists with activities such as eating, walking, dressing, bathing, and using the restroom.
The Veterans Administration offers two benefits; the VA Pension and Aid & At- tendance, these can be particularly helpful to veterans in need of long-term health care. In addition to being a veteran, applicants must also have limited income and resources to qualify for these benefits. What many veterans do not understand, however, is that they might reduce their countable income by taking approved med- ical deductions. In other words, even veterans who earn a significant income each month may qualify for these benefits if they also have substantial medical expenses. Veterans who served in any of this nation’s armed forces should speak with a veter- ans benefit planning attorney about potential eligibility for these benefits.
Veterans Pension Benefit
Veterans Pension is a cash benefit that is available to veterans who meet strict eli- gibility requirements. Like the ALTCS benefit,VA Pension is needs based, so income and resources are key determinants in whether veterans qualify. Before the VA will even look at finances, however, veterans must meet the following general criteria:
- Veterans must have been discharged from service under other than dishonorable conditions.
- Veterans must have served at least 90 days of active military service, at least one day of which was during a wartime period.
- Veterans must be age 65 or older or permanently and totally disabled.
VA Benefits & ALTCS
Individuals can have both ALTCS and VA Wartime Pension. When applying for ALTCS, it is required to apply for VA benefits first. The coordination of these two benefits is crucial to the success of your applications.
To qualify for VA Pension, veterans must meet financial requirements. Although there is not a hard and fast resource requirement, veterans with “excessive” net worth are ineligible forVA Pension.While it is true that resource limits are not well defined, applicants are regularly denied benefits for having too many resources. Veterans considering applying for VA Pension should consult with a veterans benefit attorney to determine whether their resources may raise an issue with the VA, so that they can prepare for the application if needed.
The VA also limits the amount of income veterans may earn and still qualify for VA Pension. Unlike the resource limit, however, the VA clearly defines the income limit. Specifically, veterans applying for VA Pension must meet the applicable income requirements (effective 2018):
- Require another person’s assistance to perform activities of daily living, such as bathing, feeding, and dressing
Be in a nursing home due to mental or physical incapacity
Suffer from blindness
Qualifying for the Household Benefit
As with the Aid & Attendance benefit, only veterans who qualify for VA Pension are eligible for the Housebound benefit. In addition to meeting VA Pension’s financial requirements, veterans must also meet one of the following requirements to qualify for the Housebound benefit:
Qualifying veterans must have a single permanent disability that is 100% disabling and confines them to their immediate premises, OR
Have a single permanent disability that is 100% disabling and another disability or disabilities that is 60% disabling.
Applying for the Housebound or Aid & Attendance Benefit
Veterans can apply for the Housebound or Aid & Attendance benefit when they first apply for VA Pension, or at any time thereafter if their health deteriorates. When applying for either of these benefits, veterans must supply a written report from their physician that thoroughly describes their medical condition.The report should clearly illustrate the veterans difficulty tending to activities of daily living and describe any mobility issues that the veteran may have. The letter should make it adequately clear that the veteran suffers from the conditions required to obtain the benefit for which he or she is applying.
The Approval Process
The VA receives a substantial number of benefit applications each month, and vet- erans can thus expect to wait for quite some time before their application is fully processed. In some instances, it takes the VA even as long as a year to respond, although the VA may pay VA Pension benefits retroactively for up to one year upon approval. One thing that veterans should be aware of when applying for VA benefits is that they may have to begin the application process anew if they are denied, even if the eligibility issue can be resolved easily. For this reason, veterans ought to con- sider undertaking the application process with a veterans benefit attorney who can help them avoid missing benefit payments to which they are entitled.
Monthly Pension Limits
The primary goal ofVA Pension is to provide veterans with enough monthly income to cover their necessary expenses.VA Pensions have capped rates, however, to pro- vide assistance to veterans without being excessive.
For 2018, Pensions are capped at the following amounts:
Singe veteran: $1,097 per month
Single veteran with Aid and Attendance: $1,830 per month
Married Veteran with Aid and Attendance: $2,170 per month
Widow without dependent: $735 per month
Widow with Aid and Attendance: $1,176 per month
Using Advance Directives to Plan for Mental Incapacity
First, individuals should appoint an agent that they trust to act on their behalf so that important decisions are not left in the wrong hands. Second, they should outline health care wishes in case they lose capacity to communicate such wishes personally. With only minimal effort, a handful of documents can be executed that can prevent many difficulties from arising in the future. In short, this type of planning can prevent invasive legal interventions and save substantial sums of money.
A living will is a document that is particularly important to have in place. Individuals can use a living will to provide health care instructions in case they become unable to communicate those wishes personally.A living will can be either very specific or very general, such that it can merely decline life-sustaining treatment in the event of a terminal diagnosis, or provide specific instructions as to pain relief, antibiotics, hydration, feeding, and cardiopulmonary resuscitation. Even those with a health care power of attorney should also have a living will, since an agent under a power
of attorney may not know precisely what type of health care the principal wishes to receive.
Health Care Powers of Attorney & Mental Health
With some frequency, the court has to appoint guardians to act for individuals who lose capacity to make important health care decisions personally.
Because guardianship proceedings can be both time consuming and expensive, every person should try to avoid this scenario by establishing powers of attorney while he or she has the capacity.
In simple terms, a power of attorney allows a person, called the principal, to authorize an agent to make legally binding decisions on his or her behalf. It is important to establish both a health care power of attorney and a mental health care power of attorney, as an agent cannot have a principal admitted to an inpatient mental health facility without the latter in Arizona.
Unfortunately, the mental health care power of attorney is often overlooked, but it is very important in the planning process because it can help avoid a great deal of cost if the principal ever loses capacity.
A principal under a power of attorney can either appoint the same person to act as agent under both the mental health care power of attorney and the health care power of attorney, or select two different agents altogether. Either way, a principal must appoint an agent or agents in whom he or she has absolute trust and confidence.
When establishing a power of attorney, a principal can give the agent immediate authority, or grant authority that springs into effect if and when he or she loses capacity. Every principal must comply with the following statutory requirements to make sure that the power of attorney is valid and binding:
The principal must clearly declare his or her intent to delegate authority to make health care decisions to a specific agent.
The principal must be sound of mind and free from duress.
The principal must have one witness and a notary present when he or she signs the power of attorney. The witness cannot be the agent, a relative or heir of the principal, or directly involved with providing the principal’s health care.
Financial Power of Attorney
In the same way that individuals should appoint an agent to handle medical
decisions, they should also appoint an agent to handle financial affairs. With a durable financial power of attorney, in- dividuals can appoint an agent to make financial decisions, and the agent’s au- thority can take effect immediately or only if and when the principal loses capacity to act for him or herself. To establish a valid financial power of attorney, a principal must:
Understand the nature and effect of signing a power of attorney
Sign the power of attorney willingly
Initial any paragraph in the power of attorney that benefits the agent
Have a notary and witness other than the agent, the agent’s spouse, or the agent’s children sign the power of attorney
Under Arizona law, a principal can give an agent limited authority to act on his or her behalf even after the principal is deceased. This way, the agent can rely on the power of attorney to arrange payment for funeral services and burial expenses. The document otherwise loses validity after the principal passes away, which is why it is so important to execute a valid will. By appointing an agent to handle these types of issues, individuals can relieve a great deal of pressure from their family members at what will be an already trying time.
A Note About Financial Management & Fraud Protection
Even in the very early stages of progressive diseases such as Alzheimer’s, dementia, Parkinson’s, and MS, many people suffer a diminished capacity to properly manage their finances. Oftentimes, this begins to happen even before they have been diagnosed with the disease, which makes them particularly susceptible to financial mismanagement and certain types of fraud.
When an individual cannot handle their day-to-day finances or becomes more vulnerable to financial abuse, the consequences can be severe.
Individuals who forget or are unable to pay bills could get evicted from an apartment, lose their home to foreclo- sure, risk utility shut-off, or damage their credit. Those who fall victim to scams might get cheated out of large amounts of money or lose their home or assets. Sometimes individuals are taken advantage of before their family members know their health is declining.
These issues raise questions as to how to protect a loved one from these types of risks. There are several things that can be done.
- Encourage your loved one to establish a Financial Power of Attorney as early as possible.
- Assess the situation to determine if help is needed – look at their checkbook, talk with their doctor, take inventory of their bills.You should know relatively quickly if assistance is needed. Some individuals will welcome the help and others will insist they can handle their own affairs.
- Some older people need someone to handle every aspect of their financial affairs, while others only need help in certain areas. If possible, pinpoint exactly where the difficulties lie and then provide help only where necessary.
- Establish advance directives, as discussed previously in this guide. Having these documents in place helps create a safety net of sorts so that whomever they appoint to act on their behalf can protect them from mistakes or poor decisions they might be at risk of making should they begin to lose capacity.
- Opening a smaller checking account for which they retain responsibility, but moving the bulk of their assets to another account under the control of a spouse, family member, or appointed supervisor can prevent the inadvertent mismanagement of their as- sets. Be aware, though, that outright gifting can create unintended consequences in the event that your loved one ever applies for long-term care assistance.To this end, any funds moved out of your loved one’s name will likely need to be returned in full if he or she applies for ALTCS.To prevent complications, you should seek counsel before transferring assets from your loved one’s name.
- Joint checking accounts serve as another option that can allow an account supervisor to keep an eye on things and/or pay bills, while allowing your loved one to maintain some control. Before you set up joint accounts or move the bulk of assets be sure to consider all aspects including the fiscal responsibility of new account holders.
- And finally, you and your loved ones should become familiar with scams targeting the elderly and/or ill. Look for warning signs that your older loved one has been the victim of elder financial abuse, and help them take measures to protect themselves in the future.
It is important to broach the subject of financial assistance with sensitivity. Many people are embarrassed by their inability to handle their financial affairs or fear los- ing their independence. Together with other strategies specifically tailored to meet an individual’s circumstances, this type of planning could be very beneficial.
Guardianship and Conservatorship
Applying for Guardianship or Conservatorship
Powers of attorney can be quite effective at allowing individuals to designate somebody else to make their medical and financial decisions. Powers of attorney cannot override a person’s financial and placement decisions, however, and sometimes a person becomes unable to exercise sound judgment when it comes to such decisions.
Family members presented with this type of a dilemma can protect their loved one by applying for a guardianship or a conservatorship. A guardian is appointed by the court to oversee another person’s medical decisions. Likewise, a conservator is appointed by the court to oversee another person’s financial decisions. A variety of circumstances may lead families to apply for a guardianship or conservatorship. For instance, families may consider pursuing this course if their loved one:
Is unable to make medical and/or financial decisions
Is unwilling or unable to sign a power of attorney
Becomes easily agitated, aggressive, or combative
Gets lost or disoriented, but refuses to give up driving
Is being exploited by a family member, friend, or scam artist
Cannot control spending
Is not safe to live at home, but refuses to move
Has given power of attorney to an untrustworthy person
Has changed powers of attorney numerous times
Needs treatment in a mental health facility
The process of applying for a guardianship or conservatorship can be somewhat complicated, and it typically takes about eight weeks to complete. In certain situations, however, the court will appoint a temporary guardian or conservator to act while the process is underway. Because applying for a guardianship or conservatorship always requires court involvement, it is typically best for an attorney to handle the matter. Early intervention with designating powers of attorney can help avoid the need for guardianships or conservatorships, and is highly recommended.
Estate planning is the process of anticipating and arranging for the management of one’s estate upon the end of their life or the loss of decision-making capacity.
The primary goal of estate planning is to protect, preserve, and manage an estate should a person pass away or become disabled and not able to make decisions. Creating an estate plan offers the chance to ensure that money and assets are distributed as their owner would prefer. Estate plans can also diffuse conflicts over the distribution of assets, minimize estate taxes, and help avoid the costs and delays of probate.
What is Estate Planning?
Estate planning is often viewed as the way to leave the greatest inheritance for future generations; but, a comprehensive estate plan should also include management strategies for end-of-life issues.
A purposeful estate plan goes beyond organizing the transfer of assets at death. It also provides security and stability in life. Ultimately, with the assistance of an estate planning attorney, a person can create a customized estate plan that meets his or her specific needs.
Who Should Have an Estate Plan?
Estate planning is not just for people with sizeable estates. Rather, even an individual with only a modest estate has much to gain from developing a purposeful estate plan. Preparing for the future can help a person preserve assets, no matter the size of his or her estate. The benefits of estate planning are not simply limited to the wealthy – virtually everyone can benefit from making simple preparations while they have time to do so.
Because no two people have the same exact life situation, estate plans vary from person to person.
What Does an Estate Entail?
An estate consists of all of the property a person owns or controls.The estate property may be in his or her sole name, held in a partnership, in a joint ownership arrangement, or through a trust.This includes:
IRAs and ROTHs
Stocks and Bonds
Limited Partnership Interests
Types of Estate Planning
Generally speaking, a will is the single most important document that a person can include in an estate plan. At a minimum, everybody should at least prepare a simple will that:
Designates a personal representative to handle his or her estate
Designates a property guardian to manage property for any minor children he or she may have
Designates a personal guardian for any minor children he or she may have
Designates to whom his or her assets should be distributed
Often, executing a will is the simplest way to handle certain matters, however wills do have limitations. To begin with, assets such as pension plans, stocks, life insurance policies, jointly held property, trust assets, and payable on death accounts all prevail over a will, meaning that if one of these assets conflicts with a will by naming a beneficiary different than the beneficiary named in the will, the asset passes to that beneficiary without regard to the will instructions. Also, assets passed under a will must go through probate, which costs money and can be time consuming and invasive of one’s privacy. Lastly, wills are intrinsically limited when it comes to leaving conditional gifts and funeral instructions.
With proper planning, however, a person can effectively deal with each of these issues in advance.
An individual with a sizable estate may need to take special precautions to avoid probate, to minimize tax liability, or to leave conditional or staged inheritances. There are a variety of estate planning strategies available that can help a person accomplish these goals, trusts being the most effective.
Revocable Living Trust
Revocable trusts are created during the lifetime of the trustmaker and can be altered, changed, modified, or revoked entirely. Often called a living trust, these are trusts in which the trustmaker transfers the title of a property to a trust, serves as the initial trustee, and has the ability to remove the property from the trust during his or her lifetime. Revocable trusts are extremely helpful in avoiding probate. If ownership of as- sets is transferred to a revocable trust during the lifetime of the trust-maker so that it is owned by the trust at the time of the trust-maker’s death, the assets will not be subject to probate.
An irrevocable trust is one which can- not be altered, changed, modified, or revoked after its creation. Once a property is transferred to an irrevocable trust, no one, including the trust-maker, can take the property out of the trust. It is possible to purchase survivorship life insurance, the benefits of which can be held by an irrevocable trust.This type of survivorship life insurance can be used for estate tax planning purposes in large estates, however, survivorship life insurance held in an irrevocable trust can have serious negative consequences.
While revocable and irrevocable trusts are the most commonly used trust estate planning tools, many other types of trust can be utilized when appropriate, including:
Asset Protection Trusts
Special Needs Trusts
Life Insurance Trusts
Planning for incapacity with advance di- rectives can help a person accomplish two very important goals. First, a person who makes advance preparations can designate a trusted individual to act on his or her behalf. Second, a person who makes advance preparations can outline precisely the type of medical care he or she wishes to receive in the event that he or she loses capacity to communicate health care wishes. The types of advance directives most commonly prepared are:
Health Care Power of Attorney
Mental Health Care Power of Attorney
Financial Power of Attorney
Estate Planning for Long-term Care
In addition to the basic assurances typical estate planning offers, supplemental layers of security can be implemented to cover events such as unexpected medical crises and long-term health care needs.
Estate planning facilitates the smooth transition of property from one generation to the next.The very nature of estate planning assumes that there will be an estate to divide and distribute, however nothing can wipe out an estate faster than the cost of long-term care.Those who fail to plan often find themselves at the mercy of government assistance.
While this is not always a bad alternative, it is ever-changing and there is little certainty about what government programs will look like in coming years. To this end, a comprehensive estate plan should consider the possibility of long-term care, and should have safeguards in place to protect and preserve resources in the event that a need for long-term care arises.
Other Estate Planning Considerations
Updating an Estate Plan
An individual who already has an estate plan would be mistaken to believe that there is no reason to think about estate planning issues now or in the future. Nonetheless, this is a common mistake, and it could leave a person with an incomplete plan that ultimately fails to accomplish his or her most current goals. To get the most from an estate plan, it is important for a person to keep the plan current. There are several reasons why a person should regularly review his or her estate plan:
An individual may acquire more assets that should be transferred to his or her trust or allocated in their will.
Family circumstances change, which can cause any number of changes to an estate plan.
An individual may decide to change beneficiaries or allocations for a number of reasons.
Original documents may be outdated or created in a state where the laws differ from Arizona’s laws.
The laws regarding estates and taxes change frequently.
Appointing a Personal Representative or Trust Administrator
Given the importance of deciding who gets what, it can be easy for a person to overlook the significance of yet another decision he or she must make when creating a will or a trust – that of determining who will handle the probate estate or administer the trust. Even after a person leaves an inheritance, the gift cannot be completed unless somebody actually transfers the property from the estate to the beneficiaries. With wills, this person is known as the personal representative; and, with trusts this person is known as the trustee.
Neither the role of personal representative nor the role of trustee is easy to fill. These jobs are typically time-consuming and demanding, and they require a great deal of attention. When considering whom to appoint, an individual should select somebody that will understand his or her legal duties, and that will carry out his or her obligations to the estate. Selecting just the right person to act in this capacity can spare future complications to both the estate and to the family.
Why Create An Estate Plan Now?
There are a variety of reasons individuals do not get around to creating an estate plan.The most common excuses we see include:
Never getting around to it/thinking there is plenty of time to do it
Thinking that the process is too complicated or expensive
Avoiding it – not wanting to think about what would happen in the event of incapacity or death
Assuming that estate plans are only for the wealthy