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The Long-Term Care Partnership Insurance Program in Montana

The Long-Term Care Partnership Insurance Program in Montana. Revised April 2013. 1. Services & Support: Chronic illness Disabilities Other conditions that be limiting physically or mentally. What is Long-Term Care?. 2. Statistics. Explore Quick Facts about Long-Term Care (LTC). 3.

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The Long-Term Care Partnership Insurance Program in Montana

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  1. The Long-Term Care Partnership Insurance Program in Montana Revised April 2013 1

  2. Services & Support: Chronic illness Disabilities Other conditions that be limiting physically or mentally What is Long-Term Care? 2

  3. Statistics • Explore Quick Facts about Long-Term Care (LTC) 3 3

  4. Question: What percent of persons 65 & older are expected to need some type of long-term care? 82% 70% 63% 45% 4 4

  5. Fact • 70% of persons age 65 or older • Will need long-term care 5 5

  6. Medicare • Generally doesn’t cover long-term care 6 6

  7. Custodial Care • Activities of Daily Living 7 7

  8. Question: What was the average length of stay in nursing home in Montana for 2013? 10.9 years 8.5 years 5.4 years 2.4 years 8 8

  9. Facts • Montana Average Length of Stay (2013) • 2.4 years • 1 in 5 stay more than 5 years 9 9

  10. Question: What is the average monthly cost of nursing home care in Montana for 2013? $8,589 $7,523 $5,955 $3,225 $2,987 10 10

  11. Average cost of care • Montana (2013)(nursing home) • $5,955 monthly • $71,456 annually 11 11

  12. Average Cost in Montana for 3 yrs • Individual • $214,380 • Couple • $428,760 12 12

  13. National Average Long-Term Care Services 13 13

  14. How can I provide for the cost of long-term care (LTC)? 14

  15. Ways to Afford LTC • Financial Resources • Present Income • Savings • Investments 15 15

  16. Ways to Afford LTC • Real property • Sell it • Acquire reverse mortgage 16 16

  17. Ways to Afford LTC • Depend on: • Spouse • Adult Children 17 17

  18. Ways to Afford LTC • Apply for Medicaid • Must meet certain federal & state eligibility requirements 18 18

  19. Ways to Afford LTC • Long-Term Care Insurance • Licensed Insurance Agent • Group LTC 19 19

  20. Age When People Applied for LTC Insurance (2008) 20 20

  21. Private Long-Term Care Insurance-2008 • Who has? • 12.4% of those age 65 & older 21 21

  22. Ways to Afford LTC • Montana’sNewLong-Term Care Partnership Insurance Program 22 22

  23. Historical Background • How did the LTC partnership insurance program develop? 23 23

  24. Concern at State & Federal Levels • Increasing cost of Medicaid for long-term care for the elderly 24 24

  25. Question: On average what percent of nursing home costs were paid by Medicaid in Montana? 92% 86% 73% 60% 54% 25 25

  26. Who Pays • Medicaid • 60% of LTC costs • Nursing home residents • 29% of LTC costs • Medicare/Other • 11% 26 26

  27. Federal Deficit Reduction Act of 2005 • States were encouraged to develop programs that would help reduce the growth of Medicaid expenses 27 27

  28. Montana Legislature (July 1, 2009) • Responded with the authorization for a LTC insurance partnership program 28 28

  29. Montana Collaboration • Private Insurance Companies • Commissioner of Securities & Insurance (CSI) • Department of Public Health & Human Services (DPHHS) • Montana Medicaid Program 29 29

  30. How does the Montana LTC partnership insurance program work? 30

  31. LTC Benefits • Assets up to the value of the LTC partnership policy willnot“count”when making eligibility determination for Medicaid 31 31

  32. Example: Betty • 72-year old widow • $50,000 CDs • Wants to leave CDs to grandchildren for college 32 32

  33. LTC Policy • Betty purchased a LTC partnership insurance policy • Benefit limit (pool) • $100,000 33 33

  34. Benefits • LTC partnership policy will cover the costs of Betty’s care • Up to $100,000 benefit limit 34 34

  35. $100,000 Benefit Depleted • Betty’s daughter contacted Office of Public Assistance • Medicaid eligibility determination 35 35

  36. Daughter documents • Betty purchased LTC partnership insurance policy • Full benefit ($100,000) had been utilized 36 36

  37. Calculation • OPA excluded value of Betty’s $50,000 (CDs) in Medicaid eligibility calculation 37 37

  38. Eligibility • Betty met other eligibility requirements • Became immediately eligible for Medicaid 38 38

  39. Benefit to Betty • She was able to keep $50,000 in CDs to leave to her grandchildren 39 39

  40. Why not just “give away” assets to become qualified for Medicaid instead of paying for a LTC partnershipinsurance policy? 40

  41. Give away assets • Federal & State laws require a period of Medicaid ineligibility • 5-year look-back rule 41 41

  42. Consequence • “Uncompensated asset transfer penalty” • Result: “Ineligibility period” before qualifying for Medicaid 42 42

  43. Calculation • Divide value of assets applicant gives away • By monthly average nursing home cost • Montana $5,955 43 43

  44. Revisit Betty • What if ????? • Betty had given $50,000 to her grandchildren in an attempt to become “eligible” for Medicaid? 44 44

  45. Calculation • $50,000 CDs÷ $5,955 = 8.4 • Betty has almost 8½ months of Medicaid ineligibility 45 45

  46. How will Betty pay for 8½ months of care? 46 46

  47. Caution: Asset Protection • Available only after all benefits of LTC partnership insurance policy have been utilized 47 47

  48. More Information • Medicaid & Long-Term Care CostsMontGuide • Search by MontGuide title • www.montana.edu 48 48

  49. Protect vs. Qualify • Purchasing LTC insurance partnership policy may help protectassets • Does not qualify a personfor Medicaid coverage 49 49

  50. What companies are authorized to provide LTC partnershipinsurance policies in Montana? 50

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