What is Long Term Care Insurance and why do you need coverage? LTC will help you maintain your dignity and your hard-earned savings as well as offer you the flexibility and financial security to help ensure you receive appropriate care later in life.
Did you know that Medicare does not cover long-term care? Did you know that Medicaid does offer LTC unless you spend down your assets according to Medicaid standards? Think about your family or spouse and learn how to protect your assets.
There are two categories of long-term care insurance approved for sale in Indiana:
(1) Traditional Long Term Care insurance policies.
(2) Indiana Long Term Care Insurance Program policies (Partnership)
Traditional Long Term Care Products
Traditional long-term care products are designed to offer coverage once you meet the triggers of coverage established by the insurer. As the consumer you can choose the amount of daily and maximum benefits from the options offered. Traditional plans offer flexibility of coverage benefits and these plans can be tailored to fit your specific needs and will specifically indicate how the maximum benefits will be offered.
Traditional Long Term Care Insurance products may include facility care only, comprehensive care, home health care only, and may also add riders including but not limited to life insurance. In addition, these policies are portable and pay benefits in any state and some may pay worldwide. Your premium cannot be raised because you get older or have used some of the benefits in your policy however the premium may increased based upon a group association but must be approved by the Indiana Department of Insurance.
Indiana Long Term Care Insurance Program policies (Partnership)
LTC policies that comply with the Indiana’s Partnership program are different from the traditional LTC products and offer coverage minimums determined by the State of Indiana. For example, the State determines and defines the benefit triggers, offers Medicaid Asset protection, inflation protection must be included, plans are portable as long as you keep paying the premium, can be tax deduction qualified or non tax deductible, must be guaranteed renewable however only Partnership plans policies qualify for an Indiana state tax deduction.
Like Traditional LTC your premium cannot be raised because you get older or have used some benefits but the premium may increased based upon a group association but must be approved by the Indiana Department of Insurance.
The Indiana Partnership program offers one benefit traditional LTC products don’t, Medicaid Asset Protection. Medicaid asset protection allows you, the policyholder, to keep more assets than normally allowed when, and if, you need help with long term care from the Indiana Medicaid Program.
The asset protection portion of the policy can be portable if you relocate to another State. However, Indiana partnership policyholders who relocate may only be eligible to receive an dollar for dollar asset protection if that State participates in the Reciprocity compact.
A list of States that participate in the National Reciprocity Compact can be found by calling the Indiana Partnership office toll free 1-866-234-4582.
Medicaid Asset Protection is a special state-added benefit found only in long term care insurance policies approved by the Indiana Long Term Care Insurance Program (Partnership). In addition, assets protected with a Partnership policy are exempt from Medicaid asset recovery. The State has approval from the federal government to offer asset protection only. This program does not offer income protection.
To identify if a LTC policy is a Partnership policy (qualifies for asset protection), special wording is located on 1) Outline of Coverage, 2) application, and 3) front page of the policy.
Indiana Law and Insurance Regulation require ALL types of long term care insurance policies offered for sale in Indiana to (1) offer a 30-day free look, (2) prohibit the requirement of prior hospitalization in order to receive benefits in policies sold after July 1991, (3) prohibit waiting periods of longer than 6 months for pre-existing conditions, and (4) require policies to be either guaranteed renewable or non-cancellable.
Key Terms and Definitions:
Benefit Triggers: A benefit trigger is the event that must occur in order for the policy to begin paying out its benefits.
Non-forfeiture Benefit: The applicant must be offered the chance to purchase a non-forfeiture benefit as part of their policy.
Required Consumer Protection Standards: To get benefits from the policy, the policy cannot require you to be in the hospital first. To keep up with rising costs in health care, an inflation protection benefit must be offered to you. The policy must be guaranteed renewable. This means the policy will continue as long as you keep paying the premium. Your premium cannot be raised because you get older or have used some of the benefits in your policy.
Minimum Daily Benefit: Companies may not offer a daily facility benefit below the State-set minimum. This figure is based upon 75% of the average daily private pay rate of nursing homes in Indiana.
Inflation Protection: Inflation protection must be included as an integral part of the policy and not offered as an optional rider.
Total asset protection: means the amount of the disregard is equal to the total sum of assets owned by the qualified insured
Dollar-for –dollar asset protection: You will be allowed to retain one dollar of your assets for every dollar of benefit used. This benefit is only offered on plans compliant with the Indiana Partnership Program.