Long-term-care (LTC) insurance is private insurance purchased to cover a person’s LTC needs. Long-term-care partnership (LTCP) policies are approved LTC insurance policies that allow purchasers who later enroll in Medical Assistance (MA) LTC services to protect certain assets. This asset protection allows the purchaser to designate assets that are not included in eligibility calculations and are protected from estate recovery.
For an MA member to be eligible for asset protection under LTCP, the member must go through a number of steps with his or her county MA eligibility workers. Simply having an LTCP-eligible policy does not protect the member’s assets from estate recovery. For the policy to protect the member’s assets, the member must have submitted the LTC policy to the eligibility workers, and they must have qualified the policy as an LTCP policy.
An LTCP policy protects assets in the amount equal to the total amount of insurance benefits paid by the policy during the person’s lifetime. After a person dies, an LTCP policy protects his or her assets from estate recovery.
LTCP asset protection does not protect assets in special needs trusts, pooled trusts, annuities for which DHS is the preferred remainder beneficiary, or ABLE accounts. All other assets may be protected from estate recovery, up to the protected asset limit.
LTCP asset protection does not protect an estate against recovery for General Assistance Medical Care (GAMC) claims. These claims are not for LTC services and are not part of the LTCP program.
SRU tracks many cases with LTCP policies in its database. When you request a claims payment history for a person SRU has identified as having an LTCP policy, SRU will send copies of any documents concerning the LTCP policy along with the claims history.
A personal representative of the decedent’s estate may also inform you that the estate has protected assets resulting from an LTCP policy.
If SRU does not provide the documents concerning the LTCP policy, you can request a copy of the LTCP policy and the last Long-Term Care Partnership Protected Assets Review (DHS-5426D) (PDF) from the personal representative. County staff must verify that eligibility staff approved any LTC policy as an LTCP policy in MAXIS.
The protected asset limit (PAL) is the amount equal to the amount of insurance benefits the LTCP policy paid on the enrollee’s behalf. The PAL is not the same as the coverage limit of the plan; the PAL is the amount actually expended by the LTCP policy.
If the member protected assets on his or her DHS-5426D form, these assets are protected from estate recovery, up to the PAL.
If the member has a DHS-5426D form, use the last version of this form to determine which assets are protected from estate recovery.
Member identified protected assets up to the PAL:
You cannot make estate claims against protected assets on the 5426D form, unless the value of the assets exceeds the value of the PAL. You must make claims against any assets that are not designated as protected assets.
If the member has sold, spent, or given away a protected asset, the protection cannot be transferred to other assets.
Member did not identify protected assets up to the PAL:
If the member did not designate assets up the PAL on the 5426D form, the personal representative may designate protected assets up the PAL. You cannot make estate claims against the assets designated on the form or by the personal representative. You must make claims against any assets that are not designated as protected assets.
Discounting the PAL for transferred assets
Discount the PAL for transferred assets (other than assets transferred to a spouse), using the value of the assets on the date of transfer.
You must recover GAMC payments from all assets, including protected assets; however, you may choose to recover from unprotected assets before protected assets.Report/Rate this page