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Care Funding8 min readDecember 2025For Families

ALTCS vs. Private Pay: Understanding Your Options for Senior Care Funding in Arizona

FundingALTCSPrivate PayPlanning

The Funding Question Every Arizona Family Faces

When a loved one needs assisted living, memory care, or in-home support, the first question families often ask is: how are we going to pay for this? In Arizona, the answer typically involves some combination of four funding sources: ALTCS (Medicaid), private pay, long-term care insurance, and veterans benefits. Understanding each option — and how they interact — is essential for sustainable care planning.

Option 1: ALTCS (Arizona Long-Term Care System)

ALTCS is Arizona's Medicaid long-term care program. For families who qualify, it covers the full cost of approved care services — including assisted living, memory care, adult day health, and home-based personal care.

Advantages:

  • Covers comprehensive care costs with no monthly premium for most enrollees
  • Available for as long as the individual needs care and remains eligible
  • Covers a wide range of settings including assisted living, group homes, and in-home care

    • Limitations:

  • Strict financial eligibility requirements (income below ~$2,742/month; assets below $2,000)
  • Functional eligibility requires nursing-facility level of care
  • Application process takes up to 90 days; care costs during this period must be covered privately
  • Not all facilities accept ALTCS-funded residents
  • Choice of facility may be limited to those contracted with ALTCS managed care plans

    • Best for: Families with limited assets and income who meet the functional eligibility criteria.

    Option 2: Private Pay

    Private pay means paying for care directly from personal savings, retirement accounts, Social Security income, or family contributions. In Arizona, assisted living costs range from approximately $2,500 to $6,000+ per month depending on the level of care and facility type.

    Advantages:

  • Maximum choice of facility and care setting
  • No eligibility requirements or application process
  • Immediate access to care

    • Limitations:

  • Costs can deplete savings quickly — a couple of years of assisted living can exhaust a lifetime of savings
  • No protection against cost increases
  • Families often underestimate how long care will be needed

    • Best for: Families with significant assets who want maximum choice, or as a bridge while applying for ALTCS or other benefits.

    Option 3: Long-Term Care Insurance

    Long-term care (LTC) insurance policies pay a daily or monthly benefit toward qualified care costs. Policies vary significantly in their benefit amounts, elimination periods, and covered services.

    Advantages:

  • Can significantly offset private pay costs
  • Preserves assets for other purposes
  • Some policies include inflation protection

    • Limitations:

  • Premiums can be expensive, especially for policies purchased later in life
  • Many older policies have benefit caps that don't keep pace with current care costs
  • Policy terms vary widely — review the policy carefully before assuming coverage

    • Best for: Individuals who purchased LTC insurance earlier in life and have policies with adequate benefit levels.

    Option 4: Veterans Benefits

    Veterans and surviving spouses may qualify for VA Aid & Attendance, which provides a monthly pension benefit to help cover care costs. As of 2025, the maximum benefit is approximately $2,300/month for a veteran with a dependent.

    Advantages:

  • Significant monthly benefit that can offset a large portion of care costs
  • Available regardless of whether the veteran served in combat
  • Can be combined with ALTCS in some circumstances

    • Limitations:

  • Eligibility requires wartime service and meeting financial and medical criteria
  • Application process takes 3 to 6 months
  • Asset transfer rules apply (3-year look-back period)

    • Best for: Veterans and surviving spouses who meet service and medical eligibility criteria.

    Planning the Transition Between Funding Sources

    Many families begin with private pay and transition to ALTCS once assets are depleted. This transition requires careful planning:

  • **Start the ALTCS application before assets are fully depleted.** The application process takes up to 90 days, and benefits are only retroactive to the application date — not the date of need.
  • **Understand the ALTCS look-back period.** ALTCS reviews financial history to identify asset transfers that might affect eligibility. Work with a benefits counselor to understand what transfers are permissible.
  • **Identify ALTCS-accepting facilities early.** Not all facilities accept ALTCS-funded residents. If your loved one is already in a private-pay facility, confirm whether they accept ALTCS before the transition.

    • How CareRoots Can Help

    CareRoots Health provides funding navigation support as part of our family care coordination services. We help families understand all available options, plan for funding transitions, and avoid common mistakes that can delay benefits or limit care choices.

    *This guide reflects program requirements and cost estimates as of late 2025. Benefit amounts, eligibility thresholds, and care costs change over time. Contact CareRoots Health for guidance specific to your situation.*

    Need Personalized Guidance?

    Every family's situation is unique. Book a free consultation with a CareRoots care coordinator.

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    Ethics Commitment: CareRoots does not accept placement commissions. All guidance is independent and family-first.

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