It has been our experience that many families are unaware of financial resources available or simply do not understand the resources and the difference between them. Please take a few minutes to read through the following material and should you have any questions please feel free to contact us for more information.

Medicare vs. Medicaid (or ALTCS)

We are often asked to define the difference between Medicare and Medicaid (Arizona's Medicaid program is referred to as the Arizona Long-Term Care System (ALTCS for short). Medicare is a Federal funded comprehensive health insurance program. It serves those 65 and older, those permanently disabled for at least 24 months, and those coping with end-stage renal disease. ALTCS is Arizona's State managed care system.

Medicare

1. Medicare does not provide long-term health care coverage. For example, Medicare pays for a maximum of 100 days (with copay on the 21st day) in a skilled nursing facility and only for acute care. Additional limitations apply to hospitalization, long-term rehabilitation services, and in-home care, to name a few. The Medicare benefit can be repeated many times provided there is a three day period between each hospitalization.
2. Medicare services and medical equipment are available but must be provided by a state health licensed, Medicare certified home health agency. These agencies provide intermittent visits to our clients.
3. Medicare health care coverage is also available to Hospice patients. The patient must have a signed doctor's order stating a prognosis of no more than six months life expectancy.
4. Medicare health care coverage also covers Durable Medical Equipment such as hospital beds, wheelchairs, walkers, shower seats, and portable oxygen, to name a few.

Medicare Supplemental Insurance

Medicare supplemental plans provide specific options for seniors age 65 and older. There are two major plans available, Medigap insurance with numerous option plans, and Medicare Advantage insurance. Each plan covers the co-insurance and co-payments that Medicare does not cover with Medicare Part A and Part B. Most individuals have only Part A and Part B which does not cover the cost for prescription drugs. Prescription drug coverage is available with Medigap and Medicare Advantage. These plans generally do not cover the cost of providing assistance with activities of daily living (ADL's) such as meal preparation, toileting, bathing, or dressing. However, these plans can be of great benefit with medical and prescription costs for those suffering from illness, disease, and injuries such as slips and falls. We encourage families to thoroughly research the various options available with their financial advisor, primary doctor, and/or insurance agent.

For those that qualify for eligibility ALTCS is a very good option for financial assistance with long-term care. ALTCS does not have the "maximum days of coverage" requirement that Medicare does. In order to qualify for ALTCS the individual must meet strict medical and financial requirements.

1. To qualify medically for the ALTCS benefit, applicants must undergo a medical screening process. Aspects such as continence, behavior, and a need for assistance with activities of daily living (ADL's), are part of the screening process.
2. To qualify financially the applicant must meet the following:
   1. Be under the age of 18 or over the age of 65.
   2. A resident of Arizona.
   3. A U.S. citizen or legal alien.
   4. Applicant cannot have more than approximately $ 2,094 monthly income.
   5. Married couple cannot have more than approximately $4,188 monthly income.
   6. Applicant can have no more than approximately $2,000 in countable resources. If married no more than approximately $3,000 in countable resources. The following types of assets are excluded:
      1. A principal residence with equity not exceeding $525,000.
      2. One vehicle: value cannot exceed approximately $4,500 for a single applicant.
      3. Life insurance - If the total face value of all policies owned by an individual exceeds approximately $1,500, the cash value is countable.
      4. Burial plots.
      5. Irrevocable prepaid funeral plans.
      6. Miscellaneous assets.

Countable assets, which are not excluded, include cash, retirement accounts, U.S. savings bonds, trusts, real estate other than the primary residence, second car, boats and recreational vehicles, stocks, bonds, mutual funds, and promissory notes.

Spouses in good health not needing to qualify may keep one-half of the couple's countable resources, up to a certain amount.

ALTCS uses a term called "Spend Down" for those individuals whose resources exceed the limits. It is important for the individual and family to thoroughly understand the requirements for "Spend Down". Certain criteria must be met. ALTCS currently looks back five years from the date of application, and questions any transfers with value and/or gifts. Prior to beginning the process of "spending down", check with an ALTCS representative or your legal representative.

The Veteran's Administration offers two benefits. The Wartime Pension and Aid and Attendance benefit. Both can be very beneficial to veterans in need of long-term health care. Applicants must have limited income and resources to qualify for these benefits. Strict eligibility requirements apply.

Veteran's Pension Benefit

Veteran's Pension Benefit is a cash benefit. Like the ALTCS benefit, Pension is "needs based", so income and resources are reviewed in order to qualify the individual. Prior to reviewing finances the veteran must meet the following criteria:

1. May not have been discharged under dishonorable conditions.
2. A Veteran must have served at least 90 days of active duty, at least one day of which was during a wartime period.
3. A Veteran must be 65 or older, or permanently disabled.

The following are some of the financial requirements that must be met:

1. A single Veteran without children cannot have annual income exceeding $11,830. *
2. A Veteran with one dependent cannot have annual income exceeding $15,493. *
3. Social Security and other public assistance are not counted as part of the income requirement. * A Veteran can deduct unreimbursed medical expense from their income.

Aid & Attendance Benefit

A Veteran with a medical need may qualify for assistance in addition to what the Pension provides. The benefit increases the amount of Pension a veteran may receive each month. The Veteran must show that they qualify for Pension, but must also have a medical issue that justifies additional financial support. To qualify for the Aid & Attendance Benefit the Veteran must meet any one the following medical requirements:

1. Require assistance with Activities of Daily Living (ADL's).
2. Bedridden.
3. Blind.
4. In a health care facility due to mental or physical incapacity.

The Veteran's Aid & Attendance Pension can provide a monthly tax-free benefit of up to $2,631 for two married Veteran's, $2,019 per month for a married couple where one is a Veteran, $1,703 per month to a single Veteran and $1,094 per month to a surviving spouse. The Pension does not affect ones social security benefit.

Long-term care insurance covers aspects of health care and assistance that are not covered by Medicare or other insurance plans. These plans most closely relate to the needs of Home Care clients. The plans reimburse a per diem cost of health care services such as activities of daily living (ADL's). Although these plans are for seniors 65 and older the plans can be purchased at any time after the age of 18 years of age. These plans can be costly depending on the age and health care needs of the individual. We encourage you to consult with your insurance agent or legal representative for further information. We can provide the family with resources to contact if they have none.

Most individuals are unaware of a life insurance benefit known as a Viatical Settlement. This benefit is available to the ensured prior to death. The Viatical Settlement is generally available through the Life Insurance Settlement Industry. In some cases the benefit is offered within the terms and benefits of the policy itself. The Life Insurance Settlement Industry exists because it provides a unique financial service to policyholders in need. Simply put, Life Insurance Settlements allow policyholders to use their life insurance policy as a liquid financial asset prior to death. It involves the sale or transference of an existing life insurance policy in exchange for compensation, monetary or otherwise. It is an invaluable resource for those in need of financial assistance and a timely alternative for those individuals needing immediate cash.

The amount provided in a Life Insurance Settlement reflects a discounted future value. Typically, the monetary settlement value is available for the chronically ill and terminal policyholder. A person generally is chronically ill if the person (1) is unable to perform at least two activities of daily living (ADL's), such as eating, toileting, bathing, or dressing; (2) requires substantial supervision to protect himself or herself from threats of health or safety due to severe cognitive impairment; or (3) has a level of disability requiring assistance with ADL's.

The value of cash settlement is determined by the life expectancy of the policyholder as well as other factors. We recommend that the family research this benefit thoroughly with their insurance broker and obtain several quotes from companies within the Life Insurance Settlement Industry prior to making a decision.