Long-Term Care Partnership (LTCP) and MA Asset Protection Beth Weber Health Care Programs Policy

Long-Term Care Partnership (LTCP)and

MA Asset Protection

Beth WeberHealth Care Programs Policy

www.mnltcpartnership.org2

LTCP and MA

o History of LTCP in MNo Qualified LTCP

Insurance Policieso Asset Protection due to

LTCP


LTC is expensive

o ___% of people 65+ will need LTC.o Average length of stay = ________.o 2009 costs average:

o LTCF Private room = $___________.o Assisted Living = $____________.o Home Care = $_____________.

o Average projected cost for healthy 55-year-old = $__________.


Who pays for LTC?Medicaid/

Medical Assistance

47%

Out-of-pocket 21%

Medicare 17%

Insurance 10%

Other 5%

Source:

Georgetown Health Policy Institute, 2004


LTCP in MN

Partnership allows a person to:o Receive LTC insurance benefits Ando Have MA coverage Ando Keep more assets than MA

normally allows.


History of Partnership

o 1980s - Concept developedo 1990s - Piloted in four states

(CA, IN, NY, CT)o 1992 - Studied in MNo 1993 – Fed prohibition placedo Feb 2006 - Prohibition liftedo May 2006 - MN law changedo Aug 2006 – Implemented

in MN


Partnership Sponsors

Counties

Insurers

Producers Dept. of Commerce

Consumers

Senior LinkAge

Line

DHS

Partnership


Qualified Partnership Policies

1. Policy issue date = after 7/1/06 (State Plan Amendment)

2. Be tax-qualified (HIPPA Act of 1996)3. Meet NAIC language model

requirements (2000) - Company must certify the policy form through Dept. of Commerce

4. Have been purchased when the person was a resident of Minnesota

5. Inflation Protection Requirements


Inflation Protection

Based on client’s issue age:<61 Compound annual inflation

protection61-75 Some level of inflation

protection for the first five years after purchase, or until age 76, whichever comes first

76+ Inflation protection optional


MA-LTC Assets

o $3,000 countable assets

o Interest in annuity

o $500,000 home equity limit

o Uncompensated transfer penalties


Asset Assessment

o What is the total value of countable marital assets?

o How many assets can your spouse keep?

o How many assets must you use to get down to your $3,000 asset limit?


LTC Insurance Procedures

o Request a copy of the LTC insurance policy.

o Ask the client to sign the Permission Slip (DHS-5426A).

o Submit both with a HealthQuest for Partnership determination.

o Approve MA if all eligibility factors are met.


LTC Partnership & MA Eligibility

A client may protect assets if:o He has qualified LTC

Partnership insuranceando His insurance has paid for some

of his LTC services


Protected Asset Limit - PAL

o The amount of assets that can be protected because of LTCP

o $1 of assets for every $1 spent by LTC insurance


Mark’s PAL

o Mark applies for MA payment of LTC services today.

o He has qualified LTC Partnership insurance.

o His LTCP has paid $100,000 for his LTC since 7/1/06.

o His PAL is ______________.


What is a Protected Asset?

A protected asset will not be:o Counted as an asset for MA-LTC

ando Used to repay MA costs at the

time of death.


Protecting Asset Procedures

o Send DHS-5426 and DHS-5426C to client, noting PAL amount.

o Allow 30 days for form’s return.o Provide guidance about client’s

assets in relation to MA eligibility.

o Do not specify what asset(s) to protect.


Choosing Protected Assets

Client needs to:o Talk to an advisor or attorney. o Decide if he wants to protect

assets now.o Decide what assets to protect.o Notify the county about the

decision.


Protected Assets

After a client protects an asset ...o He can keep it. o He can spend it.o He can give it away.But he cannot ...o Change his mind.o Protect more than his PAL.o Protect certain kinds of assets.


Assets that Cannot be Protected

o Pooled trust o Special needs trusto Certain annuitieso Portion of an asset owned by

another person


After Assets are Protected

o Make sure protected assets are within PAL amount

o “Protected Assets LTCP” Case notes

o STAT asset panels – “N” for MA Count code

o MMIS TPL entryo TIKL for 60 days before renewal


Renewal

60 days before renewal:o Check file and case notes.o Send DHS-5426E to insurance

company if benefits were not exhausted.

Then:o Note current PAL and asset

information on DHS-5426D.o Send to client for 30-day return.


Asset Increase in Value

When a protected asset increases in value:

o Compare the PAL to the total value of protected assets.

o If total value is less than the PAL, the increase is protected.

o If total value is more than the PAL, you may need to reduce assets.


Asset Decrease in Value

When a protected asset decreases in value:

o Sometimes the decreased value is applied to the PAL. Another asset may be protected in its place.

o Sometimes the original protected value is still applied to the PAL.


Decrease in Value Example

Jane’s PAL = $250,000 (Benefits exhausted)

Application - Jane protected:$50,000 cd$200,000 home

Renewal: Jane spent $10,000 of cdHome value dropped to $180,000


Jane Again Requests MA-LTC

Jane’s PAL = $250,000 Last Protected Assets:

$50,000 cd$180,000 home

Now: $2,500 cd $190,000 home


Liens and MA-LTC

A lien may be filed against:o A person’s interest in a life

estateo Real property he solely ownso Real property he owns with

someone else


No Lien

A lien will not be filed if the MA-LTC client:

o Is in a nursing home and is expected to return home

oro Protected the home or

property through LTCP


David’s Home

o David is a widower with two grown children.

o He lives in his own home.o He applies for MA-EW services.o David may protect assets due to

his LTCP.


Property Value Higher than PAL

o David’s PAL = $150,000o Property value = $225,000o He may protect $150,000 of his

property.o A lien may be filed against the

remaining $75,000.


Estate Recovery

When your client dies:o Assets he protected will stay

protectedo No claim will be filed against

them to repay MAo A claim may be filed against

assets that he did not protect


Estate Recovery – Spouse Dies

When the client’s spouse dies:Did the spouse also ...o Receive MA-LTC?ando Protect assets because of

his/her own LTCP?


The Spouse’s MA Costs

For the spouse’s MA costs:o No estate recovery claim is

made against your LTC client’s protected asset IF his spouse also protected it.

o An estate recovery claim may be made against any asset that only your client protected.


Vern and Barb - Scene 1

o Vern and Barb are married.o Vern gets MA-LTC. He has LTCP.o He protects a bank account.o When he dies, is the bank

account part of his MA estate recovery claim?


Vern and Barb – Scene 2

o Barb, a widow, gets MA.o She still has the bank account

that Vern protected.o Barb dies. o When she dies, is the bank

account part of her MA estate recovery claim?


Vern and Barb – Scene 3

That bank account:o Is not part of her MA estate

recovery IF she also had LTCP and protected the account.

o Can be taken for repayment of her MA if she did not also protect it.


MA-LTC with & without LTCPNo LTCP LTCP

Cost of LTC Services 300,000 300,000Countable Assets 203,000 203,000MA Asset Limit 3,000 3,000Paid LTCP Benefits 0 175,000Protected Asset Limit 0 175,000Assets that Must be Used for MA Eligibility 200,000 25,000Remaining Assets 3,000 178,000


MA-LTCP Summary

MA-LTCP Puzzle o History of LTC Partnershipo Qualified Partnership Policies o Interaction between MA and

LTCP in Minnesota


MA-LTCP References

o DHS Introduces Long-Term Care Partnership (LTCP) Bulletin 08-21-08

o Long-Term Care Partnership and Medical Assistance Asset Protection DHS-5426

Documents

Long-Term Care Partnership (LTCP) and MA Asset Protection Beth Weber Health Care Programs Policy