Q: How did the Long-Term Care Partnerships start?
Studies show that 70% of people age 65 and older will need long-term care services at some time. The concept of a public-private partnership for long-term care financing began in the 1980s as a pilot program in four states – California, Connecticut, Indiana and New York. Minnesota first considered the idea in 1992, when the legislature required a feasibility study. However, subsequent federal law changes made it difficult for new states to enact such plans until the Deficit Reduction Act removed such restrictions in 2006. Idaho is the only other state to receive federal approval ahead of Minnesota under the new LTC Partnership program. The Long-Term Care Partnership in Minnesota took effect on July 1, 2006.
Q: Why is the State promoting the Long Term Care Partnership?
The LTC Partnership fits into the State’s overall mission of trying to encourage Minnesotans to plan how they want to live in their later years, including how they can meet for their own long-term care needs. It encourages people to take greater control over how they finance their long-term care, and helps to reduce the pressure on the current system of publicly funded long-term care.
Q: How does the LTC Partnership work?
Currently, people must deplete most of their assets before the state will pay for their long-term care – whether it is in a nursing facility, assisted living or their own home. In most cases, the maximum amount a person can have in assets (not including home and a car) is $3,000 to qualify for Medical Assistance. The Long Term Care Partnership policy allows a person to protect assets beyond the $3,000 amount.
Under the Long Term Care (LTC) Partnership, a person who buys and uses a policy to pay for LTC is able to protect their assets if they later need to apply for Medicaid (known as Medical Assistance in Minnesota).
Q: What happens if people retire to different states?
Many other states that have a Long Term Care Partnership program have reciprocity agreements which permit people who bought a LTC Partnership policy in Minnesota to use it in other states. The Partnership for Long Term Care website has an updated list of states with reciprocity agreements.
Q: Who should consider buying a LTC Partnership policy?
Reasonably healthy people in their 50’s and 60’s are the target population, but buying a LTC Partnership policy is not limited to this population. Anyone concerned about how they will pay for their own long-term care should consider it unless they are in poor health, have difficulty meeting monthly expenses and/or have limited assets.
Q: How might the LTC Partnership change the LTC insurance market over time?
In addition to changing how Medical Assistance works, the Partnership has the potential to encourage insurers to offer policies that are less costly than current ones because the new LTC Partnership does not have a minimum benefit rule. Currently, the average policy sold is worth about four to five years of coverage. Insurers may begin selling policies with shorter durations, worth say two or even one year. That brings the cost down considerably, while still providing a reasonable level of protection through both the private insurance and the additional asset protection.
Q: What is the LTC Partnership Program?
The LTC Partnership Program is a program for long-term care (ltc) coverage that combines the use of private and public resources. In return for buying a private LTC Partnership insurance policy, you are allowed to keep more of your assets if you decide to later apply for Medical Assistance (MA) to help pay for your ltc services.
Q: What requirements must a LTC Partnership policy meet?
A Partnership policy must be a federally tax-qualified policy and must include consumer protections. It also must meet all of the requirements set by the Minnesota Department of Commerce for all other LTC insurance policies; and must have a certain amount of inflation protection based on your age at the time you buy the policy.
Q: What are the inflation protection requirements for a Minnesota LTC Partnership policy?
If you buy the policy when you are under age 61, the policy must provide compound annual inflation protection to qualify for the Minnesota LTC Partnership.
If you buy the policy when you are age 61 through age 75, the policy must provide some level of inflation protection to qualify for the Minnesota LTC Partnership.
If you buy the policy when you are age 76 or older, inflation protection is not required in order for the policy to qualify for the Minnesota LTC Partnership. However, the policyholder may wish to purchase inflation protection.
Q: Do all long-term care insurance policies sold in Minnesota qualify as LTC Partnership?
No. Not all carriers participate in the Minnesota LTC Partnership. Even if a carrier participates in the LTC Partnership, the carrier may choose to include only some of their products in the LTC Partnership. The insurance carrier, insurance agent or financial planner should be able to tell you if the policy you are considering qualifies as LTC Partnership.
Q. What do long-term care insurance policies, including LTC Partnership cover?
Many of today’s policies cover short- and long-term nursing home stays and a wide range of home care services, such as skilled or non-skilled nursing care, physical therapy, home making and the services of home health aides provided by state licensed and/or Medicare certified home health agencies. Some policies may also cover adult daycare, respite care for the caregiver and other specialized or alternative forms of care.
Q. What is not covered?
All policies contain limitations and exclusions – otherwise, premiums would become unaffordable. Some exclude coverage for pre-existing conditions for six months. Other policies may not cover certain mental and nervous disorders, alcoholism, drug abuse or an intentionally self-inflicted injury. Many policies will not cover long-term care provided by family members.
Q. How long can I collect benefits?
Long-term care policies generally limit benefits to a maximum dollar amount or a maximum number of days and may have separate benefit limits for nursing home care and home health care within the same policy. For example, a policy may cover five years of nursing home care and two years of home health care.
Q. Do long-term care policies have limitations for pre-existing conditions?
Yes. The law allows companies to include a 90-day or 180-day pre-existing clause in the policy. This means you would not receive long-term care benefits during the first six months after your policy was issued for any condition or illness that was diagnosed or that you were treated for during the 90 or 180 days immediately before the effective date of your policy. You would pay for any services related to the pre-existing condition during this period.
Q. Can the policy be canceled by the insurer?
Yes. If you fail to pay the premiums, your policy can be terminated. Also, if you provide inaccurate health information on the application, the company may cancel the policy during the first two years.
Q. Will I be covered if I need long-term care due to Alzheimer’s disease?
You may not be able to purchase long-term care insurance after you have been diagnosed with Alzheimer’s disease, but once you have a long-term care policy in force,
Minnesota law does not allow companies to limit benefits just because you develop Alzheimer’s disease or your health deteriorates.
Q. Can my premiums be increased once I purchase the policy?
Most premiums for long-term care “level,” meaning they don’t automatically increase as you age or your health status changes. However, the insurance company can raise rates for an entire rating class of people in the State, after review and approval from the Minnesota Department of Commerce.
Q. I have some health conditions. How do I know if I will be accepted?
The only way to find out is to apply. Also, some insurers offer group plans through employers and associations and these sometimes have “open” periods when persons who are actively at work and not using long-term care services can automatically enroll. You may want to look into that.
Q. I already have LTC insurance. How can I find out if my policy qualifies as a LTC Partnership policy?
Even if your insurer is approved to sell new Partnership coverage, it doesn’t mean your existing coverage will automatically qualify for the Partnership program. You will need to call your agent or insurer to find out whether your coverage can be exchanged for Partnership coverage. Your insurer is the only one who can determine this. If it qualifies, you will want to find out if they are planning to send you a notice of this. There is no law requiring this, but insurers are being encouraged to do so.
Q: What is Medical Assistance (MA) for Long-Term Care (LTC)?
It is also known as Medicaid. Medical Assistance for LTC is a publicly funded health care program intended for low-income people, that helps pay for health care services received while living in a long-term care facility such as a nursing home. MA for LTC also helps to pay for health care services that allow a person to stay in their home instead of moving to a LTC facility. Examples include home and community-based services through the Elderly Waiver (EW) program or one of the home and community-based waivers for persons with disabilities, or residing in a nursing home.
Q. What are considered assets with MA for LTC?
MA for LTC has many rules about assets. Some assets are always counted, like a savings account. Some assets are not counted, like furniture and clothing. Some assets do not count while you are alive. However, they may be taken in estate recovery to repay MA for LTC costs after you die.
Q. How can the LTC Partnership help me get Medical Assistance for LTC?
Usually if you get Medical Assistance for LTC, your counted assets must be at or below $3,000 or below the Medical Assistance asset limit. However, if you have a LTC Partnership policy, you may be able to get MA for LTC even if your counted assets are worth more than the limit. After your LTC Partnership policy pays for some of your care, you may “protect” some of your assets. Your protected assets will not count for MA for LTC.
Q: How does the Medical Assistance Asset Protection work with the LTC Partnership Policy?
After you have used the benefits of the LTC Partnership policy, you may be able to get Medical Assistance for LTC even if your assets are more than $3,000. You may “protect” some of your assets. Your protected assets will not count for MA for LTC.
Q. What is a protected asset?
An asset protected under your LTC Partnership policy cannot be counted when the county decides if you can get MA for LTC and it cannot be used to repay Medical Assistance when you die.
Q. What is a Protected Asset Limit (PAL)?
The total dollar amount of assets you are allowed to protect through your LTC Partnership policy when applying for MA for LTC. This amount is equal to the dollar amount the LTC Partnership policy has paid in benefits for you. For example, Jean has a LTC Partnership policy for a total of $100,000. The policy has paid $100,000 in LTC benefits under the policy. Jean can protect $100,000 in assets if at a later date, she needs to apply for MA for LTC.
Q: What can I do with the assets that I set aside?
Under the Partnership program, you may do anything you like with the assets that MA allows you to set aside, including giving them away. However, it is important that you keep track of the assets and tell your county human services office what you did with them. You must also give proof of their value at the time you apply for MA for LTC, at the time you give them away, and each time you renew your MA eligibility.
Q: What if I don’t buy a LTC Partnership policy?
You don’t have to buy a LTC Partnership policy to qualify for MA, but doing so allows you to keep more of your assets.
Q: What if I have a LTC Partnership policy, but haven’t used all of the benefits when I apply for MA?
If you haven’t used all of your Partnership policy benefits, you can still apply for MA for LTC, but you can’t set aside assets at that time. If you qualify for MA your Partnership benefits will pay for your LTC services before MA pays. Once you have used up the policy benefits, you will be able to protect assets up to the amount of Partnership policy benefits used, either at the time of estate recovery or you can still keep assets you get later in an amount equal to the policy benefits you used while you were on MA.
Q: What if I have fewer assets than my Protected Asset Limit when I apply for MA for LTC?
You do not have to use all of your asset protection right away. If your projected assets later increase in value you can protect the increased value. If you get new assets later you can protect them at that time. If you have assets that are not counted for MA for LTC, you may protect them right away or later.
Q: What if I have more assets than my Protected Asset Limit when I apply for MA for LTC?
The LTC Partnership and MA for LTC allow you to only protect assets with a value up to your Protected Asset Limit. When you have more assets than that amount, you may decide to either reduce your countable assets to become eligible for MA for LTC or reapply for MA for LTC after you reduce your assets or after your LTC Partnership policy has paid more for your long-term care.
Q: Are there any assets that cannot be protected?
Yes. You cannot protect certain types of trusts and annuities.
Q: How do I apply for MA?
To apply for MA for LTC, you must fill out the Minnesota Health Care Programs Application for Payment of Long-Term Care Services (Form DHS-3531) and turn it in to your county human services office. For more information, contact your county human services office or the Minnesota Department of Human Services (DHS) at (800) 657-3739.
Q. Will a lien be placed against my home or other real property?
A lien is usually filed if you get MA for LTC. A lien may be filed against your interest in a life estate, real property you owned yourself or real property you owned with someone else. A lien will not be filed if you are in a nursing home and will be returning home or you protected your home or other property because of your LTC Partnership policy.
Q. What is estate recovery?
This is when Medical Assistance recovers an amount of money from the estate of a person who received MA for LTC benefits. The maximum amount Medical Assistance can recover is limited to the amount spent on the person’s medical and long-term care services. Assets protected under a LTC Partnership policy are protected from estate recovery.
Q: How do I become a Partnership training sponsor?
Please review Education Provider Requirements and Instructions.
Q. What must be included in the Partnership training?
Appendix B to the Continuing Education Course Approval Application details the requirements for the Partnership training.
Q. Does training need to include the Minnesota Medical Assistance content verbatim?
Q. Does training need to be done in person?
No, interactive online courses are acceptable. Online interactive courses must meet the Interactive CE online requirements.
Q. Does the 8-hour training count towards the required 30 hours of continuing education courses or does that only apply to the 4-hour course?
Both the 8-hour and the 4-hour courses may apply towards continuing education requirements.
Q. If a long-term care insurance course is already certified in Minnesota, can trainers just add Partnership content to it and offer it without resubmitting it for approval?
No. The requirements for Partnership training are different than the requirements for a general continuing education course. A new Continuing Education Course Approval Application must be submitted with the required Appendix B – LTC Core Matrix, test, etc.