How Can It Help Protect My Assets?
Disclaimer: This is a brief description of my understanding of the Indiana Long Term Care Insurance Program (ILTCIP) or “Indiana Partnership”. If you want additional information, please call me or the state of Indiana’s Long Term Care division at 866-234-4582. You can also get additional information from: www.longtermcareinsurance.IN.gov.
How did Partnership Plans get started? The concept of Long Term Care insurance was started some 40 – 45 years ago. The insurance industry recognized the need for this type of protection and the plans have evolved dramatically over this period of time. One of the largest expenses for a state is the Medicaid Program. One of the largest expenses in the Medicaid Program is providing funding for medically needed services for low income individuals provided in Medicaid approved facilities.
1987: the Indiana General Assembly passed enabling legislation to create the Indiana Long Term Care Insurance Program (ILTCIP). Indiana was the first state to have this kind of legislation!
1993: the first ILTCP became available for purchase. Indiana is one of only four states to have implemented a Partnership Program! The other states are Connecticut, California and New York.
1999: tax legislation was passed to allow a state tax deduction for premiums paid for ILTCIP.
2001: Indiana and Connecticut were the first states in the country to enter into a reciprocal agreement regarding honoring asset protection under each state’s Partnership program!
As the industry, and the awareness of long term care grew, Federal legislation was passed in 2006, as part of the Deficit Reduction Act, that allowed all states to develop Partnership Programs (Kentucky has plans similar to the “dollar-for-dollar” coverage mentioned below). Currently there about 45 states that have Partnership Programs with reciprocal agreements. The four initial states mentioned above are grandfathered – meaning they can continue to operate as they have been, without making any changes.
As mentioned, Indiana is grandfathered and has some “state” specific benefits to help Hoosiers!
Under the Indiana Long Term Care Insurance Program an asset disregard for Medicaid may be achieved either on a total basis or dollar-for-dollar basis. Medicaid Asset Protection is a special state-added benefit found only in long term care insurance policies approved by the Indiana Long Term Care Insurance Program (Partnership). The Medicaid Asset Protection benefit does not add to the cost of the policy because the insurance company does not provide the benefit. Medicaid Asset Protection is a free benefit provided by the state of Indiana.
Pot of Dollars (or Pool): The maximum lifetime benefits provided under an ILTCIP policy must be stated as a dollar value rather than days of care. This amount is considered one pot of dollars from which all benefits of the policy are paid. There are no separate maximum benefits for facility care and home care.
1. Total basis means the amount of the disregard is equal to the total sum of assets owned by the qualified insured once the Partnership policy benefits have been exhausted. Benefit qualification:
2020 Indiana Partnership LTC Policy Requirements:
- Minimum Daily Benefit – $115 per Day
- Total Asset Policy – Initial Policy Amount at least $409,537 – Pot of Dollars
The consumer can choose the benefit period and the maximum daily benefit in a plan. Total asset protection will qualify if the total benefits of the plan design are equal or greater than the the initial policy amount above. Each year the maximum initial purchase will increase by 5% – part of the policy benefits.
2. Dollar-for-dollar basis. Not all consumers may want to purchase the amount of coverage for total asset protection. The consumer may purchase a smaller “Pot of Dollars”. For example, the consumer purchases a minimum daily benefit of $150 per day payable for three years for a total of approximately $164,000. Because this is lower than the requirement for the “total asset protection” the $164,000 would qualify for Medicaid Asset Protection – not total assets.
A requirement/benefit of the ILTCIP issued policy is to have the benefits increase by a 5% compound interest each year.
The benefit features in the ILTCIP are similar to non- ILTCIP plans. Companies must offer a comprehensive policy. A comprehensive policy includes coverage for both facility care and home and community-based care. Home and community care services shall include, at a minimum: home health nursing; home health aide services; attendant care; respite care; adult day care. The daily benefit for home and community-based services must be at least 50% of the daily nursing facility benefit contained in the policy.
The above are the basic benefit and features. I realize that this may be confusing, please let me know if you would like additional information. I am willing to meet in person and share with you additional information – no obligation! Also, at the top of this page, is a link to a website that the Department of Insurance created to give you additional information.
Understanding Long Term Care Insurance can be confusing – but not as confusing as you or a loved one trying to find ways to care for someone in need of assistance with a health issue that would be covered by Long Term Care Insurance.
Please take a few minutes to review the “Caregivers and “LTC tidbits”.
If you are interested in additional information please email or call me and we can discuss!