Many families include an individual who will require long term care. This may be due to an age-related disability, like Dementia or Alzheimer’s Disease. Or, it could be due to a physical or intellectual disability that was prevalent much earlier in that individual’s life. For many of these families, Arizona Long Term Care System (ALTCS) plays an important role in the care of their loved one. ALTCS is Arizona’s state-run Medicaid program that provides health insurance for individuals with disabilities who require long term care.
For families with a newly disabled family member due to an accident, illness or age related disability, navigating ALTCS eligibility can be difficult and stressful. The basic requirements for an applicant to qualify for ALTCS are meeting (1) citizenship requirements; (2) Arizona residency requirements; (3) medical qualification requirements; (4) income limit requirements; and, (5) asset limit requirements. Let’s break each of these down a bit further.
Citizenship/Residency
These requirements are pretty straight forward. In order to qualify for ALTCS you must either be a U.S. Citizen or be a “qualified immigrant,” like a permanent resident. To meet the residency requirement, you must reside in Arizona. You also must have a social security number or apply for one.
Medical Qualification
In order to qualify for ALTCS you must be determined to be in need of a nursing home level of care as determined by Arizona Healthcare Cost Containment System (AHCCCS). How does AHCCCS assess this? By administering a test called the pre-admission screening test (PAS). The pre-admission screening test assesses a person’s ability to do their activities of daily living (ADLs). This may include an assessment of whether you can dress yourself, toilet yourself, and feed yourself. It also takes into consideration diagnoses and things of that nature. These are all quantified into points and if you get above a certain number of points, you are considered medically eligible.
Qualifying for ALTCS can be frustrating for families. For example, a person may be able to lift a fork to their mouth, even though they can’t actually cook for themselves. It may be obvious for a family that it is unsafe for a person to live alone, even though they can walk around, dress themselves and take care of their personal hygiene. While a family might recognize a need for long term care, the PAS may not reflect that same need.
Income Limit
ALTCS is a means tested benefit, meaning that it’s for people who don’t have the assets to pay for their own care. There is an asset and monthly income limit to qualify for ALTCS. In order for you to qualify for ALTCS in 2026, the maximum gross monthly income limit is $2,982/ month.
If you have more income than is allowed, there is a solution- a “Miller” Trust. Miller Trusts (a/k/a an income-only trust) receive the income in excess of the limit and allow it not to count towards your income for ALTCS eligibility purposes. Miller trusts only address the income issue in regards to applying for ALTCS. You should not set up a Miller Trust until you are sure that the applicant medically qualifies and meets the asset requirements for eligibility.
Asset Limit
In addition to having a maximum income limit, ALTCS also requires that you have less than a certain amount of available resources. For a single person, you must have less than $2,000 of available resources to qualify for ALTCS. Now, not everything counts as an available resource. Certain assets are considered exempt, such as your primary residence and car. Most tangible personal property (clothes, electronics, and furnishings) are exempt and certain burial plans are also exempt.
If you are married, your spouse’s assets are considered part of your available resources. But, the community spouse who is not applying is able to keep a share of the assets. This is known as the Community Spouse Resource Allowance (CSRA). In Arizona in 2026, the CSRA is half of the couple’s assets on the applicant’s first day of institutionalization or the date they are eligible for Medicaid and the minimum CSRA is $32,532 and the maximum is $162,660. In order to maximize the CSRA that the community spouse gets to keep, it’s important that there is documentation when the applicant spouse was first institutionalized or became eligible for Medicaid and the assets on that date. An attorney can assist with how to maximize your CSRA.
What do families miss?
One of the big mistakes families make is assuming that once a beneficiary is on ALTCS, they won’t get kicked off. This simply isn’t true. If a family member who is already on ALTCS acquires over $2,000 of available resources or starts earning income above the limit, ALTCS can stop providing benefits. The same is true if they move out of state or are no longer in need of long term care.
Sometimes well meaning friends and family want to make gifts to disabled loved ones who are on ALTCS. They may even want to include them in their estate plans. If they make a gift or bequest outright, that gift may disqualify that loved one for benefits. That’s not to say that a gift or bequest can never be made for a loved one on ALTCS. It just means that it requires more planning. Instead of making the gift outright, consider leaving the gift in a third party special needs trust for that family member’s benefit. If a loved one receiving benefits does receive a sum of money, ABLE accounts and first party special needs trusts can also be a great resource. These options all can help families get back to an ALTCS eligible level of assets.
If you think a loved one might be eligible for ALTCS, or if their existing ALTCS eligibility may be in jeopardy, it is best to consult with an attorney who specializes in ALTCS and Medicaid Planning.
