Posts Tagged ‘income eligibility limit’

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

Gift By Agent Under Power of Attorney Reversed By Court


In 1988 George W. Pittman, Jr., signed a power of attorney giving his wife Rose the ability to handle his financial affairs. On the same day, Mr. Pittman’s attorney also prepared a deed giving Mr. Pittman’s interest in South Carolina real property to his two sisters; Mrs. Pittman signed the gift deed using Mr. Pittman’s power of attorney.

Mr. Pittman died two years later. His daughter Diane Whitford sued to set aside the transaction, alleging that Mr. Pittman was incompetent when he signed the power of attorney. Ms. Whitford also argued that the power of attorney did not specifically include the power to make gifts.

The North Carolina Court of Appeals neatly side-stepped the issue of Mr. Pittman’s competence by finding that the power to make gifts must be expressly included in a power of attorney before such transfers will be valid. Consequently, the transfer by Mrs. Pittman was invalid, and his real estate became part of his estate. Whitford v. Gaskill, South Carolina Court of Appeals, August 15, 1995.

The result in the Pittman case is consistent with the general rules governing powers of attorney. For most purposes, a power of attorney which does not explicitly include gift-giving powers can not be used to make transfers without receiving payment. This is the long-standing view of the Internal Revenue Service, which is frequently called upon to determine the validity of gifts made just before the death of the principal. The Arizona rule would almost certainly be the same; most form powers of attorney do not contain language permitting gifts, and transfers (even to a spouse) will therefore be suspect.

Who IS Buying Long-Term Care Insurance?

Many seniors consider purchasing long-term care insurance as a way of avoiding ALTCS (Medicaid) eligibility limitations. But what are the characteristics of the typical person who actually buys such insurance? A recent survey by the Health Insurance Association of America looked at buyers over age 55; the survey was based on 1994 purchases.

Not too surprisingly, given the cost of insurance, most purchasers are wealthier than the average older person. 41% have liquid assets of more than $100,000. Surprisingly, however, 28% have less than $30,000 in liquid assets.

Insurance buyers are also better educated than their uninsured peers. More than one-third (over twice the percentage of the general elderly population) of purchasers are college graduates.

According to the survey, the average annual premium was $1,500. Two-thirds of all policies included home health care benefits, about twice the rate reported in a similar study just four years earlier.

Almost half of policy buyers were over age 70. And only one in five of all those over age 55 even considered buying long-term care insurance; three of every five reported having “little or no awareness” of the availability or usefulness of such insurance.

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

MMMNA Increased

MAY 9, 1994 VOLUME 1, NUMBER 24

The 1994-1995 figure for the Minimum Monthly Maintenance Needs Allowance (or MMMNA) has been announced. Beginning July 1, 1994, community spouses of ALTCS patients will be entitled to retain sufficient income to guarantee at least $1,230 in total monthly income.

The new figure represents an increase of $51 per month over the previous level. Prior to the increase, a community spouse was permitted to retain $1179 of the total community income each month.

In addition to the MMMNA, the community spouse may be entitled to an excess shelter allowance of up to $369 per month. This also reflects an increase, from a maximum of $354 in fiscal year 1993-1994. In addition, the community spouse may retain excess income for extraordinary or exceptional costs, with a new cap on the total amount retained of $1817.

While the community spouse is permitted to retain as much of the institutionalized spouse’s income as necessary to reach the monthly maintenance needs allowance (between $1230 and $1817), the institutionalized spouse is also permitted to retain a personal needs allowance. In fact, the personal needs allowance is available to every institutionalized ALTCS patient. This allowance, which is also fixed by federal law, is set at 15% of the maximum monthly SSI benefit, which translates to $66.90 for calendar year 1994.

Numbers, Numbers …

As long as we’re talking about numbers, let’s review a few other important ones.

Income Eligibility

Of course, the most infamous of all long-term care numbers is the income eligibility limit. If an applicant for ALTCS benefit receives more than $1338 per month in income from all sources, he will simply not be eligible.

Two important variations on this hard-and-fast rule need mentioning. If the applicant is married, and “his” income exceeds $1338 per month but the total community income does not exceed $2676, he will still be eligible. And even if his (or their) income is too high, it may be possible to establish a “Miller”-type trust to permit eligibility.

The income eligibilty number changes with each calendar year. The 1993 number was $1304.


The Community Spouse Resource Allowance is the value of available assets the community spouse is allowed to retain and still have the institutionalized spouse obtain ALTCS benefits. This figure is one-half the value of available community resources held at the time of admission to the hospital or nursing home, with an upper and lower limit.

No matter how little a couple is worth, the community spouse is permitted to retain at least the first $14,532. And wealthier couples are not permitted to retain more than $72,660 as the community spouse’s “half.” This area is particularly complex, and care must be taken not to overlook techniques (many of them quite simple) for maximizing the community spouse’s “share.”

Average Cost of Care

The primary significance of this figure is in determining the penalty period suffered by ALTCS applicants who have made gifts during the previous three years. The estimate of typical nursing home care costs is divided into the total amount of gifts to determine the number of months of ineligibility.

Currently, the figure for Pima and Maricopa counties is $2406.30; for all other Arizona counties it is $2321.10. This despite the fact that long-term care actually costs as much as $3500 per month.

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