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Saturday, October 25, 2014

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Partnership

Minnesotans who do not have long-term care insurance can have the state pay for their long-term care through the state’s Medical Assistance (MA) program, but only if they meet certain asset limits. This means they must first use all of their own income and assets to pay for their care before the state will begin paying. Once on MA, a person is only able to keep some of their income for personal needs and for supporting certain family members, but must use their remaining income to pay for their care.

Medical Assistance

Medical Assistance is Minnesota’s version of Medicaid, a program jointly funded by state and federal government. It provides health care services, including long-term care. To qualify, persons must meet certain asset limits, and must therefore spend any countable assets before becoming eligible.

What qualifies as Partnership

Unlike earlier Partnership programs in other states, Minnesota’s program does not require minimum lifetime or daily maximums. To qualify as Minnesota Partnership, long-term care insurance coverage must:

  • • Meet the requirements for being “tax qualified” as defined in Section 7702B(b) of the Internal Revenue Code
  • • Meet certain consumer protection requirements in Section 6021(a)(1)(B)(5)(A) of the Deficit Reduction Act, which are taken from the NAIC model act of 2000
  • • Provide coverage to a person who was a resident of Minnesota when coverage first became effective
  • • Provide inflation protection if the person is under age 76:
  • For issue ages under 61: If a policy is sold to a person under the age of 61, it must provide compound annual inflation protection. Inflation protection must be continued until at least age 66 to be considered meaningful protection allowing the policy to maintain Partnership status.
  • For issue ages 61 through 75: If a policy is sold to a person aged 61 through 75, the policy must provide some level of inflation protection. Inflation protection must continue for the first five consecutive years following the date of purchase, or until age 76, whichever occurs first, to be considered meaningful protection allowing the policy to maintain Partnership status. After the first five years, a policy sold to a person aged 61 through 75 may, but is not required to, provide inflation protection to maintain Partnership status.
  • Further details are contained in the Inflation, exchange and notification bulletin issued 10/8/07.

    Deciding what you need

    Counselors with the state’s Senior LinkAge Line® can help you sort things out. They are designated by the federal government to provide Minnesotans with free, comprehensive, objective and unbiased information and assistance with Long-term care planning, including long-term care insurance. You can contact them at (800) 333-2433 or senior.linkage@state.mn.us.



    If you decide that long-term care insurance is for you, the following costs of care can help you decide how much coverage you may want. For other states, see longtermcare.gov

      Avg. daily rate nursing home, private Avg. daily rate nursing home, semi-private Avg. monthly rate, assisted living facility Avg. hourly rate, home health aide Avg. hourly rate, home-maker services
    U.S. average $194 $171 $2,691 $25 $17
    Minnesota average $144 $124 $2,576 $29 $20
    TC Metro area $156 $132 $3,123 $26 $21
    Rest of Minnesota $131 $115 $2,029 $31 $19

    Source: U.S. HHS, 2006, longtermcare.gov

    Insurers selling coverage

    About 60 insurers sell long-term care insurance in Minnesota. To sell Partnership coverage, insurers must have their policy filings certified by the State. To view this list, go to MinnesotaHelp.info® and search on “Long Term Care Partnership insurance companies.”

    Researching an insurer or agent

    You can check on an insurer’s status thought the Minnesota Department of Commerce’s vendor, Sircon. You can also check to see if the state has taken any enforcement actions against the company. Some financial rating institutions, including A.M. Best and Moody’s, provide free online ratings information. Other ratings institutions, including Standard and Poors, Fitch, and Weiss, may be available for purchase or through a library.

    You can check on a Minnesota agent’s licensing status through the Minnesota Department of Commerce’s vendor, Sircon. You can also check to see if the state has taken any enforcement actions again the agent.

    Resolving a dispute

    If you find yourself in a dispute with an insurer or agent and are unable to resolve it yourself, the Minnesota Department of Commerce maybe able to help. Visit Insurance Complaints, or call 800/657-3602.

    Exchanging existing coverage

    Minnesota insurers are being asked to identify and notify persons whose coverage currently meets Partnership criteria by December 31, 2008 (or 30 days after the insurer starts to market Partnership coverage, whichever comes later). If you do not receive a notice in the mail regarding this, please call your insurer. If your coverage does not meet Partnership criteria, your agent or insurer should be able to tell you whether there are changes you can make in order for it to qualify as Partnership.

    Moving to another state

    A number of other states have implemented Partnership programs or are in the process of developing them. The federal government has developed standards for a national reciprocity agreement for all states participating in the Partnership program. A person who has purchased a Partnership policy in one state can receive asset protection when applying for medical assistance for Long-Term Care in another Partnership state with which the first Partnership state has reciprocal agreement.

    Tax implications

    Minnesota residents can claim a state tax credit of up to $100/year on Schedule M-1LTC. For more information, e-mail the Minnesota Department at indinctax@state.mn.us or call 1-800-652-9094. Long-term care insurance premiums cannot be deducted or claimed on a pre-tax basis. If you itemize deductions on your federal return, you may be able to deduct your premiums if your total medical care expenses exceed 7.5% of your adjusted gross income. For further information, see IRS Publication 502.

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