Many people assume that long term care is covered under Medicare and Medicaid. Unfortunately, long term care coverage under these government plans is very limited and carries stringent requirements. That’s why the government created so many incentives to encourage people to buy their own LTCI.
Medicare Coverage Eligibility
In order to be covered under Medicare for a nursing home stay, you must meet these four requirements:
- • You must be hospitalized for at least three days.
- • You must enter a Medicare approved Nursing Facility.
- • You must be in a Medicare approved bed within the approved facility.
- • You must be receiving skilled care on a daily basis.
What Medicaid Covers
In order to be eligible for long term care benefits under Medicaid, you have to “spend down”—i.e., exhaust—most of your assets first.
For 2017, federal law requires that a single individual may keep just $2,000 in assets and retain $30 a month in income while in a Medicaid-covered nursing home.
For married couples, a spouse in a nursing home may transfer up to $109,560 (excluding a home and automobile) to his or her community-dwelling spouse. He or she may also transfer up to $2,739 in monthly income to his or her spouse.
States are required by law to seek recovery of money paid by Medicaid from an individual’s estate. But in about 40 states, there is an exception, and it comes in the form of LTCI Partnership Plans. The government has tightened the look back period to 60 months from the date of application. Click here to learn more about Partnership Plans and how they allow you to keep more of your assets.
State spend down limits and rules can vary. Please check with your state.
As a rule, in order to be eligible for long term care benefits under Medicaid, you must “spend down”—i.e., exhaust—your assets first. But about 40 states now offer Partnership Plans that reward residents who purchase Long Term Care Insurance by easing Medicaid eligibility requirements. The benefit to consumers: you can qualify for Medicaid while holding onto more of your assets.
In essence, Partnership Plans are a public/private alliance between state governments and insurance carriers. The rules vary by state, but the basic concept is a dollar-for-dollar exchange of benefits and exempt assets. In other words, if your LTCI policy pays $200,000 in total benefits, you can shelter $200,000 from Medicaid beyond what your state law allows.
We have experience with Partnership Plans and are certified in states that offer them. If you are interested in learning more, please contact us.