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As a Medicare beneficiary, where you live – meaning your state of residence – can have a significant impact on the care that you receive and how you pay for that care during your “golden years.” This page explains how Arizona’s regulations and policies are likely to affect your bottom line.
Many Medicare beneficiaries who struggle to afford the cost of Medicare coverage are eligible for help through a Medicare Savings Program (MSP). In Arizona, these programs pay for Medicare Part B premiums, Medicare Part A and B cost-sharing, and – in some cases – Part A premiums.
MSP asset limits: There is no MSP asset limit in Arizona.
Medicaid for the aged, blind and disabled (ABD) pays for Medicare cost sharing, and may cover some benefits not paid for by Original Medicare (such as vision or dental care). This program is sometimes called SSI Medical Assistance Only in Arizona.
In Arizona, Medicaid ABD covers $1,000 each year in preventive, diagnostic and therapeutic dental services, and also pays for another $1,000 in dental care provided in emergencies.
But Arizona Medicaid doesn’t cover routine eye exams or vision services for adults.
Eligibility: The income limit is $1,215 a month if single and $1,644 a month if married. This is the same income limit as QMB – which means many applicants receive both QMB and full Medicaid benefits.
Asset limits: There is no asset limit for Medicaid for the aged, blind and disabled enrollees who don’t need long-term care.
Medicare beneficiaries who also have Medicaid, an MSP, or Supplemental Security Income (SSI) will receive Extra Help. This program lowers Medicare Part D prescription drug costs. When beneficiaries apply for this program themselves, the income limit is $1,843 a month for singles and $2,485 a month for couples. The asset limit is $16,660 for individuals and $33,240 for spouses.
Medicare beneficiaries increasingly rely on long-term care, and the portion of seniors needing these services will keep rising as the population ages. However, long-term care is mostly not covered by Medicare. While Medicaid fills the gap in Medicare coverage for long-term care, its complex eligibility rules can make qualifying for benefits difficult. What’s more – eligibility rules vary significantly from state to state.
Individuals applying for Medicaid long-term care benefits have to undergo a level of care assessment. This determines the care Medicaid will pay for them to receive.
Income limits: The income limit is $2,742 a month if single and $5,484 a month if married (and both are applying for coverage). When only one spouse is applying, only the applicant’s income is counted.
Despite this income limit, nursing home enrollees can keep only $137.10 each month as a personal needs allowance. Nearly all their other income must be paid toward their care.
Assets limits: The asset limit is $2,000 for each applicant. If one spouse doesn’t need Medicaid, spousal impoverishment rules allow the non-applying spouse to keep up to $148,620 in assets.
Certain assets don’t count against the limit: many household effects, family heirlooms, some prepaid burial arrangements, and one car.
State Medicaid programs offer varying levels of community-based long-term care, which is provided in an enrollee’s home, adult day care center, assisted living facility, or another community setting. Programs offering these services are known as Home and Community-Based Services (HCBS) waivers because recipients don’t have to enter a nursing home.
Income eligibility: The income limit is $2,742 a month if single and $5,484 a month if married (and both spouses are applying).
When only one spouse needs Medicaid, the income limit for single applicants is used and only the applicant’s income is counted.
Asset limits: The asset limit is $2,000 for each applicant. If one spouse doesn’t need Medicaid, spousal impoverishment rules allow the non-applying spouse to keep up to $148,620 in assets. (These limits exclude certain assets like a car, home furnishings and other items.)
For purposes of determining eligibility for Medicaid nursing home benefits or HCBS, only the applicant’s income is counted (but their spouse’s income is not). This is different from other types of Medicaid benefits, where the income of both spouses is counted – regardless of who is applying.
Spousal impoverishment rules allow the spouses of Medicaid LTSS recipients to keep a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s monthly income, along with resource and housing allowances. This rule applies when one spouse receives Medicaid coverage for LTSS, and the other spouse doesn’t have Medicaid.
In Arizona in 2022, a community spouse can retain these financial resources:
Arizona does not have a Medicaid spend-down, which means applicants with incomes above the eligibility limit for Medicaid for the aged, blind and disabled usually cannot qualify for that program. However, applicants with incomes too high to qualify for Medicaid nursing home care or HCBS can become eligible for those services by depositing income into a Qualified Income Trust or “Miller Trust.” Income placed into this Miller Trust doesn’t count toward the income limit for LTSS programs.
Miller Trusts aren’t an option for every Medicaid applicant in Arizona. As of 2023, individuals could only apply for Medicaid using a Miller Trust if their income was below $8,912.70 per month (in Pima and Maricopa County, $8138.28 in other Arizona Counties).
States, as required by federal law, limit the home equity beneficiaries for nursing home care and HCBS can have. States set this home equity limit by choosing between a federal minimum of $688,000 and maximum of $1,033,000 in 2023.
In Arizona, LTSS recipients can’t have more than $688,000 in home equity.
Many individuals have an incentive to give away or transfer assets to become eligible for Medicaid to pay for long-term care. To curb this incentive, federal law requires states to apply a period of ineligibility for applicants for nursing home benefits who give away or transfer assets for less than their value. States can choose to also have a penalty period for HCBS.
Arizona applies an asset transfer penalty for nursing home care and HCBS. This penalty is based on a 60-month look-back period during which time asset transfers are prohibited. The penalty’s length is calculated by dividing the amount transferred or given away by the average cost for nursing home care (which is $8,912.70 in Maricopa, Pima and Pinal counties; $8,138.28 all others).
Medicaid programs are required to try to recoup benefits paid for a beneficiary’s long-term care and associated medical costs while they were age 55 or older. States can choose to also recover the cost of other Medicaid benefits. This process is called estate recovery.
Arizona has chosen to recover only from estates of Medicaid enrollees who received Medicaid nursing home care or HCBS.
Only the probate estate is subject to estate recovery in Arizona, meaning that retirement or bank accounts with “transfer-on-death” provisions are exempt (along with other property not subject to probate).
When Medicaid coverage was administered by a Medicaid Managed Care Organization (MCO) (i.e., a private insurer with whom the state contracts to administer Medicaid benefits), the state will attempt to recover what it paid the MCO. That means the estate recovery amount could be more (or less) than the actual cost of Medicaid services received.
Arizona will delay its estate recovery for enrollees who are survived by their spouse, or by a child who is under 21 or disabled.
The state may also reduce or waive its estate claim under specific circumstances (these are listed on pages 7-8 of this document).
Here is more information about estate recovery in Arizona.
Arizona’s State Health Insurance Assistance Program (SHIP)
Free, volunteer Medicare counseling is available by calling Arizona’s State Health Insurance Assistance Program (SHIP) at 1-800-432-4040. The program is offered through the Arizona Department of Economic Security.
Contact a SHIP for help enrolling in Medicare, comparing and changing Medicare Advantage and Part D plans, and getting information about state Medigap protections. They may also be able to offer referrals to local agencies for services like home care and long-term care. This website has more information about the SHIP in Arizona.
Elder Law Attorneys
The National Academy of Elder Law Attorneys (NAELA) has a search feature that can be used to find an elder attorney who can help individuals explore Medicaid long-term care benefits.
The Arizona Health Care Cost Containment System (AHCCCS) administers the state’s Medicaid program. Visit this website to print an application for the MSP or Medicaid ABD. You can also visit the AHCCCS website to find contact information for Arizona’s long-term care offices, which can help you apply for Medicaid long-term care benefits.
