Posts Tagged ‘Community Spouse Resource Deduction’

Pending Insurance Claim Is Not “Available” to ALTCS Applicant


It makes sense that someone seeking to qualify for public benefits would want to argue that they do not have assets available to them. Sometimes, however, an applicant will want to argue that more assets are available, as Charles Smith and his wife did—unsuccessfully.

Mr. Smith, an Arizona resident, was injured in a motorcycle accident in April, 2000. As a result he was hospitalized and ultimately moved to a nursing facility. A year after his injury his wife applied for coverage from the Arizona Long Term Care System (ALTCS), Arizona’s Medicaid program for long-term nursing care.

The ALTCS system calculated that Mr. and Mrs. Smith had assets of $108,421.98 on the date of the accident. That meant that Mr. Smith would not be eligible for ALTCS coverage until the total available assets reached $56,210.99—the so-called Community Spouse Resource Deduction (or CSRD).

Meanwhile, the driver of the car that struck Mr. Smith admitted fault for the accident. Unfortunately, he had no liability insurance. Mr. Smith, however, was covered by two uninsured / underinsured motorist policies, with total coverage of $125,000. Those policies paid out to the Smiths in July, August and December of 2000.

Mrs. Smith, on her husband’s behalf, argued that the insurance coverage should have been counted as an available resource as of the date of the accident. Because the CSRD (the amount the couple would be allowed to keep) is calculated based on the total available resources, inclusion of the insurance proceeds would mean that they would have been entitled to retain $87,000. That would have meant that Mr. Smith would have qualified for ALTCS coverage in February, 2001, rather than May of that year (as he ultimately did), resulting in reimbursement for three additional months of nursing facility bills—perhaps a $10,000 to $15,000 benefit.

Although a hearing officer agreed with Mrs. Smith, ALTCS did not, and the agency set enrollment in the program for the later date. A Maricopa County (Phoenix) trial judge reversed the agency and ruled in the Smiths’ favor.

The Arizona Court of Appeals, however, restored the ALTCS interpretation. The insurance proceeds weren’t actually available on the date of the accident, said the judges—as evidenced by the fact that it took nine months before the claims were finalized and payments received. ALTCS was right to calculate the Smiths’ assets at the lower number. Smith v. Arizona Long Term Care System, January 22, 2004.

HMO Patient’s Survivors Not Limited To Medicare Appeal


William and Cynthia Ardary lived in rural California. In 1991, they attended a seminar sponsored by Aetna Health Plans of California; the seminar was part of Aetna’s marketing plan for its Medicare HMO, Aetna Senior Choice.

Mr. and Mrs. Ardary were interested in the HMO alternative, but were concerned about the availability of care in their rural area. They particularly asked about access to emergency care and more sophisticated treatment. According to Mr. Ardary, the Senior Choice representative reassured them that, if the need arose, they would immediately authorize transfer to a larger hospital or more specialized treatment facility.

Attracted by the excellent benefits and lower prices (compared to Medigap coverage), the Ardarys changed from “regular” Medicare to the Senior Choice HMO. Two years later, Mrs. Ardary suffered a serious heart attack.

Mrs. Ardary was first treated at a small rural hospital near her home. The local facility did not have either cardiac or intensive care capabilities. According to Mr. Ardary, both he and his wife’s physician repeatedly requested that Aetna authorize an airlift transfer to a larger medical center, but Aetna declined. Mrs. Ardary died in the local hospital.

Mr. Ardary and his children brought a wrongful death action against Senior Choice and Aetna. In their lawsuit, they alleged that the HMO was negligent in denying the transfer to a larger, more advanced treatment facility. Aetna argued that the Ardarys’ only recourse was to appeal the alleged denial of Medicare benefits through the administrative appeal process.

The U.S. District Court agreed with Aetna and dismissed the Ardarys’ lawsuit. The Ardarys appealed, arguing that they were not seeking review of the denial of Medicare benefits itself, but the alleged negligence of the treatment team in failing to secure proper medical care.

The Ninth Circuit Court of Appeals now agrees with the Ardary family. The appellate court finds that the claims are not “inextricably intertwined” with the denial of benefits, and the Ardarys may seek to prove their claims at a trial in the District Court. Ardary v. Aetna Health Plans of California, October 21, 1996.

[Note: The Ninth Circuit includes Arizona, so the same result would clearly be reached in Arizona.]

ALTCS and SS Figures for the New Year

Last week, Elder Law Issues reported on the new 1997 figures for Medicare copayments and benefits. Many Medicaid and Social Security figures will also change with the new year. Some new numbers:

Income Cap (single applicants earning more than this amount do not qualify for long-term care Medicaid–ALTCS– unless they create special trust arrangements) $1,452.00 /mo

Minimum Community Spouse Resource Allowance (in Arizona this is called the CSRD–this is the minimum amount a community spouse is permitted to retain while permitting the institutionalized spouse to still qualify for long-term care/ALTCS) $15,804.00

Maximum Community Spouse Resource Allowance (the community spouse is permitted to retain one-half the total available resources of the couple, up to this amount–but always retains at least the minimum amount above) $79,020.00

One other ALTCS eligibility number will not change. The Minimum Monthly Maintenance Needs allowance (the MMMNA), the figure used in calculating share of cost for married ALTCS recipients, will remain at $1,295 until July 1, 1997.

Monthly exempt earning amount (Social Security retirees may earn this amount without having any reduction in benefits):

Under age 65 $720.00

Ages 65-69 $1,125.00

New Figures Released For 1996 ALTCS Eligibility


In 1996, nursing home residents will be permitted to earn up to $1410 per month and still qualify for subsidized care through the Arizona Long Term Care System. That is the most significant of a collection of new eligibility and program numbers now available for next calendar year.

Some of the new numbers, and the significance of each:

Income Cap–the income eligibility cap for ALTCS will increase from 1995’s $1,374 to $1,410 per month. This figure is three times the maximum Supplemental Security Income (SSI) benefit available from the federal government; that benefit increases to $470 with January benefit checks.

The importance of the Income Cap has diminished in the past two years with the advent of “Miller” Trusts. Anyone with income in excess of the eligibility amount can be made eligible by the simple expedient of creating such a trust (but see the discussion below for those with even higher incomes).

Average Cost of Care–the calculation of the average cost of nursing home care in Pima, Maricopa and Pinal Counties increases to $2,651.42. Gifts made by ALTCS applicants within the three years before application must be divided by this figure to determine the number of months of ineligibility caused by the transfer. In addition, under current ALTCS rules, individuals with income over this amount will be unable to establish “Miller” Trusts to secure eligibility.

In counties outside the urban center of Arizona, the Average Cost of Care will increase to $2,530.67. Both new numbers are increases of more than $100 per month. Neither new number should be confused with the real cost of nursing home care in the community.

CSRD–both the maximum and minimum “Community Spouse Resource Deduction” will increase as well. Couples with less than $15,348 in available assets will be allowed to keep all their resources and still qualify for ALTCS eligibility. Couples with more than $76,740 will be permitted to keep only half of that (or $38,370). The bottom number is an increase of about $400; the cap reflects an increase of almost $2,000.

Other figures, including the Minimum Monthly Maintenance Needs Allowance of $1,254 and the Maximum Monthly Maintenance Needs Allowance of $1,919 will be updated on July 1.

1996 ALTCS Eligibility Figures

Income Cap $1,410
Asset Limitation* $2,000
Personal Needs Allowance $70.50/mo.
Minimum CSRD $15,348
Maximum CSRD $76,740
Minimum MMNA* $1,254
Maximum MMNA* $1,919
Average Cost of Care (Pima, Maricopa, Pinal) $2,651.42
Average Cost of Care (All other Counties) $2,530.67
Burial Limitation* $1,500
Lookback Period 36 months (Until 8/10/96 30 mos)
Lookback (Trusts) 60 months

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