(a) As frequently as necessary the committee shall adopt, in light of appropriated funds and expected need, a formula to be used in determining the applicant's share of total medical expenses incurred as a result of a catastrophic illness, based on the applicant's annual gross income, number of dependents, amount of assets, and forthcoming third-party payments, all considered in light of the requirement that the applicant's share will be paid to the provider on a payment schedule covering a period of at least three years.

(b) For the purposes of applying the formula to determine the applicant's share, multiple catastrophic illness occurring within a 12-month period to the applicant or other members of the applicant's family shall be treated as one catastrophic illness.

(c) In applying the formula to determine the applicant's share, the total gross income and the total assets of the family of the applicant may be taken into account, with the following exceptions:

(1) the applicant's permanent place of abode;

(2) one noncommercial vehicle;

(3) tools, equipment, vehicles and other assets required in a trade or business;

(4) ordinary household and personal effects;

(5) $1,000 of liquid assets;

(6) all nonliquid assets unless this exclusion would bring about an inequitable result; however, all income derived from this property shall be taken into consideration in determining the recipient's gross income;

(7) inalienable shares in a Native corporation created under 43 U.S.C. 1601 et seq. (Alaska Native Claims Settlement Act), for the period of their inalienability as specified in the Act;

(8) Alaska longevity bonus payments;

(9) any other assets specifically restricted for the use of the recipient by state or federal law.

(d) Assets received by the applicant as a custodian, guardian, conservator, or trustee for another are not considered assets of the custodian, guardian, conservator, or trustee.

(e) The applicant's share shall be reduced in the amount of any premiums paid for health insurance or a prepaid medical plan up to $500 if incurred in the 12-month period beginning with the occurrence of the injury or the onset of the illness.

(f) Notwithstanding the provisions of this section, the committee may waive payment of an applicant's share when the catastrophic illness is the proximate result of an immunization required by law.