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LTC Insurance Policies That Can Help You Qualify for Medicaid

  • March 10th, 2005

Many middle-income people have too many assets to qualify for Medicaid but can't afford a pricey long-term care insurance policy. Four states '“ California, Connecticut, Indiana and New York '“ offer special long-term care policies that can allow buyers to protect assets and qualify for Medicaid when the long-term care policy runs out. These are called "partnership policies," and they are intended to provide incentives for people to purchase long-term care insurance policies that will cover at least some of their long-term care needs. (Note: A fifth state, Illinois, has a partnership program, which is still technically in effect, but few or no policies are being sold.)

In California and Connecticut, the asset protection offered by partnership policies is dollar-for-dollar: for every dollar of coverage that your long-term care policy provides, you can keep a dollar in assets that normally would have to be spent down to qualify for Medicaid. So, for example, if you're single, you would normally be allowed only $2,000 in assets in order to qualify for Medicaid coverage of long-term care. But if you buy a long-term care insurance policy that provides $150,000 in benefits, you would be allowed to retain $152,000 in assets and still qualify for Medicaid. (These states set limits on the assets that can be protected.)

In New York, the partnership policy benefits are even more significant. Once you have exhausted the benefits from your long-term care partnership policy, you can qualify for Medicaid coverage no matter your level of assets. In other words, an unlimited amount of assets can be protected.

Indiana offers either of the above models, depending on when the policy was purchased and the policy's design.

Bear in mind that the 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 information on the state partnership policies, visit the following Web sites:

California: www.dhs.cahwnet.gov/cpltc

Connecticut: www.Ctpartnership.org

Indiana: www.in.gov/fssa/iltcp

New York: www.nyspltc.org

Local Elder Law Attorneys in Ashburn, VA

Judith Mitnick

Needham Mitnick & Pollack, PLC
Falls Church, VA

Mindy Felinton

Felinton Elder Law & Estate Planning Centers
Rockville, MD

Jean Ball

Hale Ball Carlson Baumgartner Murphy PLC
Fairfax, VA

Last Modified: 03/10/2005

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