Long Term Care Solutions For People Who Can Only Afford A Little Bit Of Protection

By Author: Patricia Chapman
Total Articles: 1
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In their website, the National Clearinghouse for Long Term Care Information said that we should not buy too little insurance because it will only delay the use of our own assets to pay for care. This may have been true almost two decades ago but with the creation of the Long Term Care Insurance Partnership Program (LTCIPP), we can now buy as little insurance as we can afford and still protect some or all of our assets. Truly, this program provides long term care insurance options for people who are on a budget.

What is the LTCIPP?

The LTCIPP is a partnership between state governments and LTC insurance companies which was formed in an effort to increase ownership of long term care insurance and reduce the public’s dependence on Medicaid budget. The program was first introduced as a demonstration project in the states of California, Connecticut, Indiana and New York but was made available all throughout the country after the ratification of the Deficit Reduction Act of 2005.

The ...
... program comes with the asset-disregard feature which allows owners of partnership policies to apply for Medicaid benefits under different eligibility and asset recovery requirements in case they exhaust their benefits. For the unacquainted, Medicaid only provides benefits to people who pass the poverty criteria of their states. Oftentimes, these are people with no more than $2,000 worth of assets left to their name (excluding the value of home and car). Therefore, without the asset-disregard feature of the program, a person who exhausts his policy and wants to tap into Medicaid must first use his life savings to pay for care. He can only qualify when the value of his assets passes the poverty criteria set by his state.

With the asset-disregard feature, however, this does not have to happen. People can buy as little insurance as they can afford. In case they exhaust their policy, they can apply for Medicaid and be eligible to keep as much value of assets as the amount of benefits they received. Below is an example that demonstrates how the asset-benefit feature of LTCIPP works.

Mr. Wakefield bought a partnership policy with a benefit amount of $250,000. Some years after, he entered a nursing home and exhausted the benefits of his policy. Because he is still in need of long term care, he applied for Medicaid. By then, his total asset value is $275,000. Had it been that his policy is not partnership-qualified, he would have had to spend $273,000 of his assets to qualify for Medicaid, since Medicaid only entitles beneficiaries to keep $2,000 worth of assets. But since he owns a partnership policy, he only needed to spend $23,000 since he received $250,000 from his policy and he is entitled to keep $2,000 worth of assets.

Aside from the asset-disregard benefit, LTCIPP also comes with the following features:

• Home-based and facility based coverage
• Inflation protection
• Tax-qualified (will be eligible for some tax incentives)

There are long term care solutions for each of your long term care concerns. Read more about them at infolongtermcare.org.