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Money, Insurance & Investment for Seniors
Law Allows Certain Long-Term Care Insurance
Policyholders to Exceed Medicaid's Asset Limits
When insurance is depleted, individuals may qualify
for Medicaid and keep assets
By
ElderLawAnswers.com
 October 6, 2006 - Soon residents in many states
will be able to purchase special long-term care insurance policies that
allow them to qualify for Medicaid even if their assets exceed the
prescribed limits. In an effort to encourage people to purchase
long-term care insurance, the Deficit Reduction Act of 2005 (DRA)
created the Qualified State Long Term Care Partnership program. The
program expands to all states partnership programs currently available
in only four states.
Under the partnership programs, private companies
sell long-term care insurance policies that have been approved by the
state and meet certain standards, such as having inflation protection.
Once the long-term care insurance is depleted, individuals may qualify
for Medicaid and keep assets equal to the amount of benefits received
under the long-term care insurance policy.
Normally, individuals will
not qualify for Medicaid if they have more than $2,000 in assets. But
under a partnership policy, a policyholder who had exhausted a long-term
care insurance policy that had provided, say, $150,000 in benefits would
be allowed to retain $152,000 in assets and still qualify for Medicaid
coverage of long-term care.
Partnership programs are currently available in
California, Connecticut, Indiana, and New York. So far, according to the
AARP, 21 additional states
have enacted legislation to authorize plans under the new law. Those
states are: Arkansas, Colorado, Florida, Georgia, Hawaii, Idaho,
Illinois, Iowa, Maryland, Massachusetts, Michigan, Missouri, Montana,
Nebraska, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island,
Virginia, and Washington.
The programs are still in the early stages of
development, so it is unclear what the premiums for the policies will be
or how many years of coverage individuals will be able to buy. A big
question is whether individuals will be able to use a policy in a state
other than the one they purchased it in. Under the current partnership
programs, Medicaid asset protection will only work if you receive your
long-term care in the state where you bought the policy, or in another
partnership state that has a reciprocal agreement with the first state.
For more on long-term care insurance, including
partnership policies,
click here.
For an article by the Florida Sun-Sentinel on the
partnership programs,
click here.
For the updates on this story,
click here
To go to ElderLawAnswers.com,
click here
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