I recently wrote about Governor Brewer’s plan to cancel Arizona’s Medicaid program for people who have large medical bills and no health insurance. The program is one part of  AHCCCS (Arizona Health Care Cost Containment System, pronounced “access”).  The title of my post was, “Arizona should not help people with their medical bills”.  Some of the comments made in response to my post were misinformed about how AHCCCS works, and I responded with my general knowledge gained from working with low income Arizonans.  I now have better information on AHCCCS as I recently I had the opportunity to participate in a  conference call with the Director of the Phoenix Area Agency on Aging, who provided an overview of Arizona’s Medicaid program.

The speaker, Ann Marie Grande, talked about the differences between the Arizona Long Term Care System (ALTCS) and Acute Care Services, which is the health insurance program for low income Arizonans.

Arizona Long Term Care System (ALTCS, pronounced “alltex”)

ALTCS pays nursing home costs for low income Arizonans and has several programs to help frail, sick people stay in their homes.  People who apply for ALTCS cannot exceed the asset limit of $2,000 – but a house and car are not counted. However, the state will seek reimbursement once a person who participates in ALTCS dies (or after the surviving spouse dies). The state will require the person’s estate or family to sell the person’s house and reimburse the state for what it spent on long term care for that individual.

For people applying to any of the AHCCCS programs (not ALTCS), the state of Arizona does not consider assets. An insurance agent on the conference call asked Ms. Grande if a person on AHCCCS could own a Bentley, and the answer was “yes”. Ms Grande went on to say that, “in fact, they could have two Bentleys”.  This is because Arizona only asks people about their income when they apply for Medicaid.

Ms Grande also said that if a person has a large amount of money in the bank, this is not counted by AHCCCS.  Money in the bank is only counted if it provides a steady stream of income. A pension, annuity payments, alimony, dividends, and other steady payments are considered income.  But money sitting in a bank account is not a consideration when someone applies for help from AHCCCS.

So it turns out, as I thought, that Arizona is a very liberal state when it comes to helping people with their medical bills.  This is due to Proposition 204, which was approved by a majority of Arizona voters in 2000.  Proposition 204 required that money received from a tobacco lawsuit would be spent on expanding eligibility for AHCCCS programs. Between 2000 and 2025 the state is supposed to receive about $3.2 billion from the tobacco settlement, and this money is supposed to be spent on AHCCCS programs.  AHCCCS has several programs, including the following:

Medical Expense Deduction (MED) program

A person can be enrolled in this program if they end up in the hospital, have no health insurance, and can’t pay their bills.  (I have talked to people receiving treatment for cancer who are on this program as well.)  If person’s income over three months, minus three months of medical expenses, equals 40% of the federal poverty level, that person qualifies for MED.  40% of the federal poverty level would be $363 for an individual and $486 for a couple.  In this case, AHCCCS pays the person’s medical bills. This is supposed to be short-term coverage and is reviewed every six months.  Only income is considered as part of an application for MED – not assets.

Medicare Cost Sharing

This is a program for people on Medicare whose income is below $1,239 (individual) or $1,660 (couple), but above the federal poverty level of $908 (individual) or $1,219 (couple).  Once approved for Medicare Cost Sharing, the state of Arizona will pay the person’s Medicare Part B premium.  Part B premiums range between $96.40 and $115.40. People new to Medicare in 2011 will pay the higher premium.  There is no asset limit to apply for this program.

More help for these folks: When the state of Arizona accepts a person into the Medicare Cost Sharing program, the state will then send information to Social Security so the person gets signed up for a limited income subsidy (LIS) for their Part D drug plan and drug costs.  If a person applies for this help directly to Social Security, they will be asked about their assets.  So the best way to get this LIS help for drug costs is by going through AHCCCS, especially if an individual or couple has some money in the bank.  The application can be found on-line by googling “arizona medicare cost sharing”. When approved for LIS, a person pays only $2.50 for generic drugs, or $6.30 for any brand drug. People on LIS do not have to worry about the Part D donut hole. LIS is a really big help to people with large drug costs and limited income.

Dual Eligible

If a person is on Medicare and Medicaid (with income of less than $908/month), they are called “dual eligibles”.  For these people with very low income, AHCCCS will pay co-pays that come with Medicare coverage.  If a person is enrolled in a Medicare Advantage plan, the person’s AHCCCS health plan may or may not pay co-pays.  This is why it is a good idea to enroll in a Medicare Advantage plan designed specifically for “dual eligibles”, so the Medicare Advantage plan coordinates care to make sure a person’s co-pays are covered and the patient pays nothing for their medical care.