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New York Long Term Care Trust Act
Senate Bill S9082 would establish the New York Long Term Care Trust Program to provide long-term care benefits for eligible participants. Those employed in the state of New York, who have paid the required payroll deductions for at least 10 years, and need assistance with at least three activities of daily living (ADLs), will be eligible for the program benefit of $36,500. The benefit is capped at $36,500 per lifetime (NOT per year). The $36,500 amount will be adjusted for inflation each year.
The payroll deduction would apply to all W-2 earnings with no cap. The payroll deduction could apply to everyone working in the state of New York, even those who reside in other states, like New Jersey, Connecticut or Pennsylvania.
Washington State was the first in the nation to establish a Long-Term Care Trust to help offset the high cost of long-term care services in their state. Senate Bill S9082 is New York State’s version of the same program. One very important difference about New York’s version are the rules regarding how to become exempt from the program and not be subject to the payroll deduction. According to the bill, in order to be exempt from the New York Long Term Care Trust Act, you must own long-term care insurance before January 1st of the year in which the law becomes effective. For example, if the law becomes effective anytime in 2023, you must have already owned long-term care insurance no later than January 1, 2023 in order to be exempt from the payroll deduction. It’s more likely that the law will become effective in 2024. If the law becomes effective anytime in 2024, you must own long-term care insurance no later than January 1, 2024 in order to be exempt from the payroll deduction.
The bill summary explains the New York Long Term Care Trust Act this way:
“Provides for an optional exemption from the obligation to pay premiums (which exemption is coupled with a disqualification of the right to receive benefits) for individuals who have had in place private long-term care insurance continuously for at least the duration of the calendar year to date prior to the effectiveness of the law, for as long as they maintain those policies.”
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What is Long Term Care?
There are many different services that would fall under the definition of long-term care. These services include institutional care in nursing facilities or non-institutional care such as home health care, personal care, adult day care, long-term home health care, respite care and hospice care.
- Nursing homes in New York State are licensed under the Public Health Law.
- Home health care consists of services received in your home, and can include skilled nursing care, speech, physical or occupational therapy, or home health aide services.
- Home care (personal care) consists of assistance with personal hygiene, dressing or feeding, nutritional or support functions, and health-related tasks.
- Adult daycare can provide supervision and other social, recreational, and in some cases, health services during the day, in a group setting outside the home, for elderly persons who still live at home.
- Assisted living facilities provide housing and ongoing care and services to those unable to perform activities of daily living or who have a cognitive impairment.
- An alternate level of care is care received as a hospital inpatient when there is no medical necessity for being in the hospital and is for those persons waiting to be placed in a nursing home or while arrangements are being made for home care.
- Respite care is temporary institutional or at-home care of a dependent elderly, ill, or handicapped person, providing relief for their usual caregivers.
- Hospice care is a program of care and treatment, either in a hospice care facility or in the home, for persons who are terminally ill and have a life expectancy of six months or less.
Will I Need Long-Term Care?
The chances of needing some type of long-term care services is high. It is estimated that over 40% of all persons who were 65 years old in 1990 will enter a nursing home during their lifetimes.
The Cost of Long-Term Care in New York
Long-term care is very expensive. Most people cannot afford to privately pay for long-term care services for very long.
Nursing home care costs vary in upstate New York from $427 per day in Central New York to $456 per day in the Rochester area, which is approximately $155,855 per year in Central New York to $166,440 per year in the Rochester area.
Downstate, nursing home costs vary from $495 per day in the Northern Metropolitan area to $514 per day in Long Island, which is approximately $180,675 per year in the Northern Metropolitan area to $187,610 per year in Long Island. It is estimated that people in nursing homes stay on average for less than 2½ years.
Home health care is also expensive. According to an industry survey, the average cost of home health care in New York State in 2021 was $29 per hour. Assuming 20 hours of care per week, average home health care costs throughout the State reach $31,000 per year.
Is Long-Term Care Covered By Medicare or Health Insurance?
Medicare: Medicare does NOT pay for most long-term care services. Individuals should not rely on Medicare to meet their long-term care service needs. Medicare does not pay for custodial care when that is the only kind of care needed. Medicare covers skilled nursing facility care but only on a very limited basis.
If you need skilled health care in your home to treat an illness or injury, Medicare may pay for some part-time or intermittent home health services furnished by a home health agency. Visit www.medicare.gov and www.cms.gov for more information on what is/is not covered by Medicare.
Medicare Supplement Insurance Plans: These plans are designed to fill in some of the gaps in Medicare coverage, but they do NOT cover most long-term care services.
Private health insurance: that you might already have covers mainly acute conditions and probably does NOT cover long-term care.
Medicaid: To qualify for Medicaid coverage, you must meet certain income and asset tests. Because of the high cost of nursing home care, more than half of those who enter nursing homes privately paying for their care deplete their assets to the level required to qualify for Medicaid in less than a year.
In New York State in 2023, if only one spouse needs nursing home care, the married couple can keep a home, a car, and assets up to $148,620. A single person who requires such care may have resources up to $30,182 and still qualify for Medicaid.
Source: American Council on Aging
Additional Source: New York Department of Financial Services
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Scott A. Olson at 877-727-9582
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New York License #: LA-986644