In the old days, in order for the government to pay for someone’s long-term care expenses, they would have to spend down their “countable assets” to the “poverty level” (about $3,000).
43 States Have Passed Landmark Legislation!
In conjunction with the federal government, 43 states have passed landmark legislation. These states now allow their residents to protect their assets from Medicaid if they own a government-approved “Long Term Care Partnership Policy.”
A “Long Term Care Partnership Policy” is similar to a traditional long-term care insurance policy, except they must include special consumer protection features, especially inflation protection.
With a Long Term Care Partnership policy, each dollar that your partnership policy pays to you in benefits entitles you to keep a dollar of your assets, if you ever need to apply for Medicaid services.
Bill’s long term care partnership policy pays him $300,000 of long-term care benefits. He applies to his state to start to pay for his care. The state disregards $300,000 of his countable assets when determining if he can qualify for state-funded care.
In the old days, you’d have to spend your assets down to the state-required minimums (e.g. about $3,000). Now, the state will allow you to keep the minimum amounts PLUS an amount equal to whatever your long term care partnership policy paid to you in benefits.
Your Assets are Protected!
Your assets are protected from “Medicaid spend down” and your assets can even be protected from “estate recovery” after you pass away.
Four states have successfully run long term care partnership programs since the 1990’s: California, Connecticut, Indiana and New York. Since 2005, many other states have established long term care partnership programs including Alabama, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
November 2015 Update: Michigan recently passed legislation creating a Long Term Care Partnership Program. These states do not currently have a Long Term Care Partnership Program: Alaska, Hawaii, Mississippi, New Mexico, and Utah. Illinois, Massachusetts, and Vermont have made initial steps for a Long Term Care Partnership Program but no policies are available for sale at this time.