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ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
ALTCS; trusts
Purpose
Modifies requirements for the Arizona Long Term Care System (ALTCS) special treatment trusts.
Background
The Social Security Act allows individuals who would ordinarily be ineligible for the ALTCS within the Arizona Health Care Cost Containment System (AHCCCS) due to excess income or resources to establish eligibility by creating a trust. To qualify, the trust must name Arizona or AHCCCS as the primary beneficiary of the trust and meet other specified criteria. If the trust terminates before or upon the death of the member, AHCCCS recovers an amount equal to the amount of Medicaid funds spent on the beneficiary’s behalf, a portion of which is returned to the federal government (43 U.S.C. 1396).
AHCCCS determines whether a trust meets federal and state requirements to qualify and establishes requirements and guidelines for the review of trusts to establish eligibility for the ALTCS and post-eligibility treatment of income. To create a trust, a trustee must provide the following information: 1) specific trust language that protects Arizona's beneficiary interest in the trust and that designates AHCCCS as the primary beneficiary of the trust, if the trust is terminated before or on the death of a member; 2) a provision that requires the direct deposit of all income assigned to the trust by the grantor into an account entitled by the trust; 3) a detailed description of how the trust funds will be administered and disbursed; 4) a statement signed by the trustee acknowledging that an adverse action may be taken against the member's eligibility for ALTCS if the trustee improperly violates any trust terms or requirements; and 5) specific language that protects the trust for the benefit of the beneficiary.
Statute
specifies the types of expenses that may be paid out of a trust, including: 1)
legal and professional expenses related to the trust; 2) health insurance
premiums and
medically-necessary medical expenses; 3) living expenses for food, clothing and
shelter;
4) entertainment, education or vocational needs; 5) travel expenses for a
companion who is necessary to enable the beneficiary to travel; and 6) personal
care services that are determined to be medically-necessary by the
beneficiary's physician and that are provided by a service provider that is
registered with AHCCCS, including a financially-responsible relative of the
beneficiary (A.R.S. §§ 36-2932;
36-2934; and 36-2934.01).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires that a trust include specific language providing that, upon termination of the trust or death of the beneficiary, the trust will reimburse any amounts paid for medical assistance to the trust beneficiary under any state Medicaid plan.
2. Allows a trustee to make distributions to an Achieving a Better Life Experience Account established for or by the trust beneficiary pursuant to federal law.
3. Removes the requirement that personal care services be provided by a service provider that is registered with AHCCCS.
4. Includes a guardian as a financially-responsible relative.
5. Makes technical and conforming changes.
6. Becomes effective on the general effective date.
House Action
HHS 2/21/19 DP 9-0-0-0
3rd Read 3/4/19 49-9-2
Prepared by Senate Research
March 26, 2019
CRS/AG/kja