Arizona Medicaid Income Limits 2026: AHCCCS and ALTCS

There are two different Arizona Medicaid income limits, and which one applies to you depends on your age and whether you need long-term care.

If you are under 65 and not disabled, you are measured under MAGI, a percent-of-poverty test with no asset limit at all: 138% of the federal poverty level for adults, roughly $1,835/month for one person.1,2,3,4 If you are applying for nursing-home or in-home long-term care, Arizona runs that through a separate program, the Arizona Long Term Care System (ALTCS), on a hard $2,982/month income cap and a $2,000 asset limit.5 This guide covers both tests: the ALTCS numbers and the Income-Only Trust that rescues an over-cap applicant, and the AHCCCS MAGI limits by group, including what happens to that coverage on your 65th birthday.5,1

How ALTCS works: AHCCCS, but for long-term care

Arizona's Medicaid program is the Arizona Health Care Cost Containment System (AHCCCS, pronounced "access"), and it's run differently from almost every other state's. Where most states bolted managed care onto fee-for-service over time, Arizona has been a fully managed-care Medicaid program since 1982.

Long-term care is its own track inside AHCCCS, called ALTCS, and it is broader than the name "nursing-home Medicaid" suggests. ALTCS is a managed long-term-care program that pays for care across settings: in the person's own home and community, in an adult group home, in an assisted living facility, and in a nursing home. Being able to pay for assisted living is a real contrast with many states, and it matters when a family is weighing where care happens.8

To get ALTCS, an applicant has to clear two separate gates: a medical/functional gate (you must need a nursing-facility level of care, confirmed by a Preadmission Screening) and a financial gate (the income and asset limits below). Clearing one without the other doesn't qualify you. The rest of this guide is about the financial gate, where most of the planning happens.5

The other Arizona Medicaid income limits: AHCCCS coverage under MAGI

ALTCS is the long-term-care track. The rest of AHCCCS runs on a completely different income test, and it is the one most people asking about Arizona Medicaid income limits actually need. The $2,982 cap above is the aged, blind, and disabled (ABD) standard, used for people 65 and over, people who are blind or disabled, and people who need a nursing-facility level of care. Everyone else, meaning adults under 65 who are not disabled, parents and caretaker relatives, pregnant women, and children, is measured under MAGI (Modified Adjusted Gross Income), a percent-of-poverty test that federal law bars states from attaching any asset test to.3,1

One mechanical difference matters before you compare yourself to any number below. Under MAGI, your household is your federal income-tax household (the taxpayer, their spouse, and their tax dependents) rather than everyone living under your roof. The ABD track uses different household rules, so the same family can be counted two ways depending on which pathway applies.9

Arizona's 2026 MAGI income limits by group

AHCCCS publishes its MAGI limits as a percentage of the Federal Poverty Level, effective February 1, 2026:1

For a household of one, AHCCCS puts the Adult Group limit at $1,769/month (133% FPL) and the Caretaker Relative Group limit at $1,410/month (106% FPL).1

Those two adult figures, 133% and 138%, are the same limit, not two programs, and the gap between them trips up almost everyone who compares charts. Federal law writes the expansion adult group at 133% of the poverty line, then requires the state to disregard an amount equal to 5 percentage points of the FPL, which lifts the effective ceiling to 138%.2 AHCCCS publishes the 133% base in its policy manual; 138% is that same standard after the mandatory disregard is applied.1,2 In 2026 the effective ceiling works out to roughly $1,835/month for one person, which is 138% of the $15,960/year poverty guideline that covers the 48 contiguous states and the District of Columbia. Alaska and Hawaii run on separate, higher guidelines.4,2 The disregard is what makes the difference for the Adult Group specifically; the children's, pregnant-woman, and caretaker-relative percentages above are the effective levels as AHCCCS publishes them.1

No asset test on the MAGI track

The $2,000 asset limit in the box above belongs to ALTCS and the ABD track. It does not exist on the MAGI side: federal law bars a state from applying any assets or resources test to the MAGI groups, and expressly excepts the aged, blind, disabled, and long-term-care pathways from that bar, which is why those pathways keep a resource test and the MAGI groups do not.3

The practical version: a 55-year-old with $20,000 in savings and income under 138% FPL is judged on income alone in Arizona. The same person applying for ALTCS at 66, with the same $20,000, is over the resource limit. Same state, same money, different test.3,5

Parents and caretaker relatives: where a grandparent raising a grandchild would look

If you are raising a grandchild, the Caretaker Relative Group is the AHCCCS category to ask about. Whether a particular grandparent meets the state's definition of a caretaker relative turns on relationship and living-arrangement rules AHCCCS applies to your specific household, so confirm your own case with AHCCCS rather than assuming it either way. What we can give you is the number: Arizona sets the Caretaker Relative Group limit at 106% FPL, or $1,410/month for a household of one, the lowest limit of any AHCCCS MAGI group.1

That group sits low across the country for a structural reason worth knowing. Parents and caretaker relatives are a federally mandatory Medicaid group, but their mandatory floor is not a poverty-level percentage. Under 42 CFR 435.110 the minimum income standard is the state's old AFDC cash-welfare standard in effect on May 1, 1988, converted to a MAGI equivalent, and the underlying statute ties the group to the state's AFDC eligibility rules as they stood on July 16, 1996.10 Neither date has moved, and AFDC itself no longer exists. Children, by contrast, carry a mandatory floor of 133% FPL that re-indexes every year when the poverty guidelines update.11 A group pegged to a defunct welfare standard falls further behind every year; a group pegged to the poverty line does not.

There is a second door in Arizona that does not exist everywhere. Because AHCCCS runs the ACA expansion Adult Group, a caretaker relative who is under 65 and over the 106% limit is not automatically out. They can be measured against the Adult Group's 138% effective ceiling instead.1,2 In a state that did not adopt the expansion, which the Supreme Court's 2012 decision in NFIB v. Sebelius made optional, that second door is closed and the frozen caretaker standard is the only mandatory pathway a non-disabled adult has.2,10

The 65th birthday: when the MAGI pathway closes

This is the transition to plan for, and it is invisible on most income-limit charts. Federal law writes the expansion Adult Group narrowly: individuals under 65 years of age, not pregnant, and not entitled to or enrolled in Medicare, with income up to 133% FPL (138% effective) and, because it is a MAGI group, no asset test.2,3

On the 65th birthday, that pathway closes. The same person is then generally assessed under the SSI-related ABD rules, the track the statute expressly excepts from the MAGI no-asset-test rule.3 Two things change at once:

• The income yardstick changes. It stops being 138% FPL (about $1,835/month for one person) and becomes the SSI Federal Benefit Rate, $994/month for an individual, or, for long-term care specifically, the $2,982 ALTCS cap covered below.6,4,5
• A resource test appears where none applied before, defaulting to the SSI standard of $2,000 for an individual, the same figure ALTCS uses.6,3

So a 64-year-old covered through the Adult Group at $1,600/month with modest savings can find themselves over both tests at 65 without a dollar of income changing. Which ABD category and standard AHCCCS applies depends on the situation, so treat the 65th birthday as a date to call AHCCCS about, not a formality. Medicare does the same thing early: the Adult Group excludes anyone entitled to or enrolled in Medicare, so someone under 65 who reaches Medicare through disability leaves the group the same way.2

The Arizona Medicaid income limits and the income cap

ALTCS sets its 2026 income limit at $2,982/month, which is exactly 300% of the SSI Federal Benefit Rate ($994 for 2026).5,6 This is the "Special Income Level," the same 300% figure other income-cap states use.

Here's where Arizona diverges from spend-down states. In a state like Illinois or California, income above the standard doesn't disqualify you; you just spend the excess on care each month. Arizona is an income-cap state: if your gross monthly income is over $2,982, you are flatly ineligible for ALTCS, no matter how high your care costs are, unless you take one specific step. That step is the Income-Only Trust.5

The Income-Only Trust (Arizona's Miller Trust)

An Income-Only Trust, the term Arizona uses for what most states call a Qualified Income Trust or Miller Trust, is the workaround for the income cap. It's an irrevocable trust into which the applicant deposits the income that exceeds the cap each month. The deposited income no longer counts against the $2,982 limit, so the applicant qualifies; the trust funds are then spent on the applicant's care under strict rules, and whatever remains at death goes to the state up to the amount Medicaid paid.5

The trust doesn't make the income disappear or shelter it. It re-routes it so the gross-income test is met while the money still goes toward care. The mechanics are simple: each month you deposit only the portion of income above the $2,982 cap into the trust, ALTCS then counts you as under the cap, and the trust money is paid toward your cost of care alongside the rest of your income (minus your Personal Needs Allowance). The point people miss: in an income-cap state, having "too much" income is a paperwork problem, not a disqualifier. You set up the trust, fund it each month, and you're in.5

The $2,000 asset limit

Separate from income, ALTCS limits a single applicant to $2,000 in countable assets ($4,000 for a married couple when both spouses apply, $2,000 each).5 Arizona, unlike a handful of states that raised their asset limits, holds to the long-standing federal figure.

"Countable" is the word that matters. ALTCS exempts a long list of assets from the count: your home (subject to an equity cap of $752,000 for 2026), one vehicle, household goods and personal effects, and prepaid burial arrangements. So the $2,000 applies to bank accounts, investments, a second vehicle, and the like, not the roof over your head.5

The asset limit and the income cap are independent tests. An Income-Only Trust solves an income problem; it does nothing for assets. An applicant over the $2,000 asset limit has to reduce countable resources legitimately (spending down on the applicant's own care, the home, exempt items) rather than giving them away, which runs into the look-back below.5

The five-year look-back

ALTCS reviews asset transfers made in the 60 months before a long-term-care application.5,12 Giving away money or property for less than fair market value during that window, signing a house over to a child for a dollar, gifting a grandchild a down payment, can trigger a penalty period during which ALTCS won't pay for long-term-care services even though you otherwise qualify.

There are legitimate exceptions (transfers between spouses, transfers to a disabled child, certain caregiver-child home transfers) and legitimate planning approaches, but anything done inside the five-year window deserves an elder-law attorney's review first. If long-term care is on the horizon for someone in your family, talk to a professional before moving assets. For the broader toolkit, see our guide to Medicaid planning strategies.

Long-term care: what a nursing-home resident keeps

When ALTCS pays for nursing-facility care, the resident contributes almost all of their monthly income toward the cost of care. What they keep is the Personal Needs Allowance (PNA), money reserved for the resident's own small expenses (clothing, a haircut, a phone). Arizona sets its PNA at $149.10/month, far above the $30 federal floor.5,7

For a resident who needed an Income-Only Trust to qualify, the mechanics stack: income flows into the trust, the PNA and any spousal allowance come off the top, and the remainder is paid to the facility. (For the national picture on the PNA and how it's set, see our explainer on the Medicaid personal needs allowance.)

Protecting the spouse who stays home

When one spouse needs long-term care and the other remains in the community, federal spousal-impoverishment rules keep the at-home spouse from being left destitute. Arizona applies the federal figures for 2026:5

So a married couple is in a very different position from a single applicant. The community spouse can hold up to $162,660 in assets and keep a monthly income allowance up to $4,066.50 while the other spouse receives ALTCS-funded care.5

After death: estate recovery

Like every state, Arizona runs a Medicaid estate-recovery program. After a recipient who was 55 or older and received long-term-care services dies, the state may seek repayment from the estate, unless the recipient is survived by a spouse or a minor, blind, or disabled child. Federal exceptions apply, and an undue-hardship waiver exists.5,13 For how estate recovery works and where families have room to plan, see our Medicaid estate recovery explainer.

How to apply for Arizona Medicaid

Which door you use depends on which test applies to you. If you are applying on the MAGI side (regular AHCCCS coverage, not long-term care), Health-e-Arizona Plus is the front door, and the ALTCS office line and Preadmission Screening described below are not part of that path.1

ALTCS is run by AHCCCS, and the long-term-care application is handled through the ALTCS office rather than a generic Medicaid portal. You have two main routes.

Every ALTCS applicant goes through a Preadmission Screening to confirm they need a nursing-facility level of care, separate from the financial review. Apply even if your income is over the cap. With an Income-Only Trust, being over $2,982/month is a solvable problem, not a wall.5

Learn More

Find personalized help working through Arizona ALTCS eligibility and the Income-Only Trust rules for your family at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.