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Long-Term Care Partnership (LTCP) and MA Asset Protection Beth Weber Health Care Programs Policy

Long-Term Care Partnership (LTCP) and MA Asset Protection Beth Weber Health Care Programs Policy. LTCP and MA. History of LTCP in MN Qualified LTCP Insurance Policies Asset Protection due to LTCP. LTC is expensive. ___% of people 65+ will need LTC.

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Long-Term Care Partnership (LTCP) and MA Asset Protection Beth Weber Health Care Programs Policy

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  1. Long-Term Care Partnership (LTCP) and MA Asset Protection Beth Weber Health Care Programs Policy

  2. LTCP and MA • History of LTCP in MN • Qualified LTCP Insurance Policies • Asset Protection due to LTCP www.mnltcpartnership.org

  3. LTC is expensive • ___% of people 65+ will need LTC. • Average length of stay = ________. • 2009 costs average: • LTCF Private room = $___________. • Assisted Living = $____________. • Home Care = $_____________. • Average projected cost for healthy 55-year-old = $__________. www.mnltcpartnership.org

  4. Who pays for LTC? Source: Georgetown Health Policy Institute, 2004 www.mnltcpartnership.org

  5. LTCP in MN Partnership allows a person to: • Receive LTC insurance benefits And • Have MA coverage And • Keep more assets than MA normally allows. www.mnltcpartnership.org

  6. History of Partnership • 1980s - Concept developed • 1990s - Piloted in four states (CA, IN, NY, CT) • 1992 - Studied in MN • 1993 – Fed prohibition placed • Feb 2006 - Prohibition lifted • May 2006 - MN law changed • Aug 2006 – Implemented in MN www.mnltcpartnership.org

  7. Partnership Sponsors www.mnltcpartnership.org

  8. Qualified Partnership Policies • Policy issue date = after 7/1/06 (State Plan Amendment) • Be tax-qualified (HIPPA Act of 1996) • Meet NAIC language model requirements (2000) - Company must certify the policy form through Dept. of Commerce • Have been purchased when the person was a resident of Minnesota • Inflation Protection Requirements www.mnltcpartnership.org

  9. Inflation Protection Based on client’s issue age: <61 Compound annual inflation protection 61-75 Some level of inflation protection for the first five years after purchase, or until age 76, whichever comes first 76+ Inflation protection optional www.mnltcpartnership.org

  10. MA-LTC Assets • $3,000 countable assets • Interest in annuity • $500,000 home equity limit • Uncompensated transfer penalties www.mnltcpartnership.org

  11. Asset Assessment • What is the total value of countable marital assets? • How many assets can your spouse keep? • How many assets must you use to get down to your $3,000 asset limit? www.mnltcpartnership.org

  12. LTC Insurance Procedures • Request a copy of the LTC insurance policy. • Ask the client to sign the Permission Slip (DHS-5426A). • Submit both with a HealthQuest for Partnership determination. • Approve MA if all eligibility factors are met. www.mnltcpartnership.org

  13. LTC Partnership & MA Eligibility A client may protect assets if: • He has qualified LTC Partnership insurance and • His insurance has paid for some of his LTC services www.mnltcpartnership.org

  14. Protected Asset Limit - PAL • The amount of assets that can be protected because of LTCP • $1 of assets for every $1 spent by LTC insurance www.mnltcpartnership.org

  15. Mark’s PAL • Mark applies for MA payment of LTC services today. • He has qualified LTC Partnership insurance. • His LTCP has paid $100,000 for his LTC since 7/1/06. • His PAL is ______________. www.mnltcpartnership.org

  16. What is a Protected Asset? A protected asset will not be: • Counted as an asset for MA-LTC and • Used to repay MA costs at the time of death. www.mnltcpartnership.org

  17. Protecting Asset Procedures • Send DHS-5426 and DHS-5426C to client, noting PAL amount. • Allow 30 days for form’s return. • Provide guidance about client’s assets in relation to MA eligibility. • Do not specify what asset(s) to protect. www.mnltcpartnership.org

  18. Choosing Protected Assets Client needs to: • Talk to an advisor or attorney. • Decide if he wants to protect assets now. • Decide what assets to protect. • Notify the county about the decision. www.mnltcpartnership.org

  19. Protected Assets After a client protects an asset ... • He can keep it. • He can spend it. • He can give it away. But he cannot ... • Change his mind. • Protect more than his PAL. • Protect certain kinds of assets. www.mnltcpartnership.org

  20. Assets that Cannot be Protected • Pooled trust • Special needs trust • Certain annuities • Portion of an asset owned by another person www.mnltcpartnership.org

  21. After Assets are Protected • Make sure protected assets are within PAL amount • “Protected Assets LTCP” Case notes • STAT asset panels – “N” for MA Count code • MMIS TPL entry • TIKL for 60 days before renewal www.mnltcpartnership.org

  22. Renewal 60 days before renewal: • Check file and case notes. • Send DHS-5426E to insurance company if benefits were not exhausted. Then: • Note current PAL and asset information on DHS-5426D. • Send to client for 30-day return. www.mnltcpartnership.org

  23. Asset Increase in Value When a protected asset increases in value: • Compare the PAL to the total value of protected assets. • If total value is less than the PAL, the increase is protected. • If total value is more than the PAL, you may need to reduce assets. www.mnltcpartnership.org

  24. Asset Decrease in Value When a protected asset decreases in value: • Sometimes the decreased value is applied to the PAL. Another asset may be protected in its place. • Sometimes the original protected value is still applied to the PAL. www.mnltcpartnership.org

  25. Decrease in Value Example Jane’s PAL = $250,000 (Benefits exhausted) Application - Jane protected: $50,000 cd $200,000 home Renewal: Jane spent $10,000 of cd Home value dropped to $180,000 www.mnltcpartnership.org

  26. Jane Again Requests MA-LTC Jane’s PAL = $250,000 Last Protected Assets: $50,000 cd $180,000 home Now: $2,500 cd $190,000 home www.mnltcpartnership.org

  27. Liens and MA-LTC A lien may be filed against: • A person’s interest in a life estate • Real property he solely owns • Real property he owns with someone else www.mnltcpartnership.org

  28. No Lien A lien will not be filed if the MA-LTC client: • Is in a nursing home and is expected to return home or • Protected the home or property through LTCP www.mnltcpartnership.org

  29. David’s Home • David is a widower with two grown children. • He lives in his own home. • He applies for MA-EW services. • David may protect assets due to his LTCP. www.mnltcpartnership.org

  30. Property Value Higher than PAL • David’s PAL = $150,000 • Property value = $225,000 • He may protect $150,000 of his property. • A lien may be filed against the remaining $75,000. www.mnltcpartnership.org

  31. Estate Recovery When your client dies: • Assets he protected will stay protected • No claim will be filed against them to repay MA • A claim may be filed against assets that he did not protect www.mnltcpartnership.org

  32. Estate Recovery – Spouse Dies When the client’s spouse dies: Did the spouse also ... • Receive MA-LTC? and • Protect assets because of his/her own LTCP? www.mnltcpartnership.org

  33. The Spouse’s MA Costs For the spouse’s MA costs: • No estate recovery claim is made against your LTC client’s protected asset IF his spouse also protected it. • An estate recovery claim may be made against any asset that only your client protected. www.mnltcpartnership.org

  34. Vern and Barb - Scene 1 • Vern and Barb are married. • Vern gets MA-LTC. He has LTCP. • He protects a bank account. • When he dies, is the bank account part of his MA estate recovery claim? www.mnltcpartnership.org

  35. Vern and Barb – Scene 2 • Barb, a widow, gets MA. • She still has the bank account that Vern protected. • Barb dies. • When she dies, is the bank account part of her MA estate recovery claim? www.mnltcpartnership.org

  36. Vern and Barb – Scene 3 That bank account: • Is not part of her MA estate recovery IF she also had LTCP and protected the account. • Can be taken for repayment of her MA if she did not also protect it. www.mnltcpartnership.org

  37. MA-LTC with & without LTCP www.mnltcpartnership.org

  38. MA-LTCP Summary MA-LTCP Puzzle • History of LTC Partnership • Qualified Partnership Policies • Interaction between MA and LTCP in Minnesota www.mnltcpartnership.org

  39. MA-LTCP References • DHS Introduces Long-Term Care Partnership (LTCP) Bulletin 08-21-08 • Long-Term Care Partnership and Medical Assistance Asset Protection DHS-5426 www.mnltcpartnership.org

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