Can ALTCS take your House?

Before coming to your Question, “can ALTCS take your house”, let’s know about ALTCS.

What is ALTCS?

ALTCS is part of the Arizona Health Care Cost Containment System (AHCCCS) which helps seniors and disabled individuals who are in need of long-term care to avail health care services. When an individual qualifies for ALTCS through evaluations conducted by Arizona Medicaid, they get to take advantage of the care they need the most.

For some, ALTCS benefits do not come without a price.

As part of the 1993 Omnibus Budget Reconciliation Act (1993 OBRA)  state must have a system to recover its costs from the estates of beneficiaries. Yet, the state can only recover from a beneficiary’s estate if they are not one of the following described conditions:

• The individual died younger than 55;
• Survived by a spouse or a child under 21 or disabled; or
• Recovery of the estate would cause undue hardship to the survivors of the beneficiary.

The third condition is included in paragraph B of the Arizona Admin Code § 9-28-911. It states that the survivor of a beneficiary may write a request to AHCCCS for exemption from estate recovery because of undue hardship attached with a written statement describing the factual basis for a claim that the estate should be exempted from estate recovery. The request must be submitted within 30 days from the receipt of the notification of the AHCCCS claim against the estate. On the other hand, AHCCCS will review the request and will respond to the request within 30 days upon receipt of the undue hardship exemption request. Listed are the conditions that an estate be granted exemption:

• The estate, which consists only of real property, must be listed as residential property by the Arizona Department of Revenue or County Assessor’s Office, and the survivor has a business in the residential property, provided that the business has been running at least 12 months before the death of the ALTCS beneficiary, provides more than 50% of their livelihood and that losing the property will result to the survivor’s loss of livelihood as well.
• Estate which consists only of real property must be listed as residential property by the Arizona Department of Revenue or County Assessor’s Office, and the survivor has been living at the property for 12 months and has lived there at the time of the ALTCS beneficiary’s death, and that he/she owns no other residence.
• Estate consists only of personal property, a survivor must have a gross annual income of less than 100% of the Federal Poverty Level (FPL) and that he/she does not own any other home, land, or other real property.

When the estate consists of both personal and real properties qualifying for an undue hardship exemption, AHCCCS will not grant an exemption but will adjust the claim to the value of the personal property.

If you are asking, will they take the whole house? Well, it depends. Medicaid normally recovers only the equivalent of the costs of health care services received.

How will the state recover from a beneficiary’s estate?

The state of Arizona may affect the recovery of the costs of the ALTCS benefits in the following ways:

• Reimbursement from Non-Probate Assets.

If the estate is subject to a probate proceeding, the state may file a claim for non-probate assets. Probate assets are in need of proceedings for the verification of the veracity of a will that appoints who will manage the distribution of assets. Probate assets are intended for their respective recipients. Non-probate assets are the ones not mentioned in the will and are will not undergo a proceeding and management of distribution.

• Liens on Real Property

A ‘lien’ is a legal right to a property that hinders the real owner to sell it as it is recorded in the county registry, until such time that the debt is satisfied. ALTCS uses two types of liens:

• TEFRA Lien

TEFRA (Tax Equity and Fiscal Responsibility Act) or the ‘Pre-Death’ Lien can be applied to properties of beneficiaries that received care for 90 consecutive days, the survivors are not residing in the said property, and has no sibling residing in the property for more than a year at the time the beneficiary started receiving long-term care.

If in any condition that the beneficiary recovered, discharged, and returns home, the lien will no longer be in effect.

Further, a lien will not be enforced if the beneficiary’s sibling has already lived in the house at least a year before the beneficiary themself has been admitted to an institution. Another is if the beneficiary’s child has already lived in the house at least two years before the beneficiary was accepted in the institution, and that the child had taken care of his parent delaying the institutionalization of the beneficiary.

• “Post-Death Lien”

The Post-Death Lien is applied after the beneficiaries’ death. This lien has the same set of exemptions as the TEFRA lien.

Can ALTCS take your house in Arizona?

Based on those discussed above, the state is not likely going to take the house. It still depends on certain situations. If the cost of the care received from the long-term care institution does not equal the value of the house, the state can’t just take the whole house.

There are also certain conditions that were provided by the law that delay or even exempt the individual’s estate from being recovered by the state. Let’s take the example of a 65-year-old who died while in a long term care facility. He is survived by his spouse and by his 30 year old mentally disabled son who lives in the house. The question is, will they take the house? Definitely not. Why? It is because of the surviving wife and son who is mentally disabled residing in the house. The law provides that the state cannot put a lien on a house where a survivor wife or an under 21 or disabled child lives.

Another example is a full time housewife and her 1 year old infant are survivors of a beneficiary who is a 40 year old disabled person. His wife does not have any other properties, still looking for a job, and is taking care of her infant child. They may apply for a waiver for estate recovery due to undue hardship. The state will not pursue the house because it may cause undue hardship for the wife and her infant child.

Read about ALTCS Services.

Conclusion

The bottom line is, that the state cannot put people in a worse condition. Even if you are within the criteria of having your house recovered by the state, you shouldn’t be worried because there are other possibilities that you may be exempted from it. I hope we helped you to know about can ALTCS take your house.

A Certified Medicaid Planner can help, they will develop a plan to preserve the home’s equity. Contact our office to discuss your individual situation.