Indiana Long Term Care Partnership
This guide provides information about the workings of the Indiana Long Term Care Partnership and how they can potentially impact an individual's estate planning for long term health care requirements.
1. How does the Indiana Long Term Health Care Partnership OperateThe Indiana Long Term Care Insurance Program is a partnership between Indiana State government and private insurance companies. Insurance companies voluntarily agree to participate in the Program by offering long term care insurance policies that meet more stringent State requirements than other policies. Policies approved under the Program are better known as
Since May 1993, Indiana residents have had a choice between traditional long term care policies or Indiana Partnership policies. Partnership policies protect assets through a feature which places their purchasers under different, more favorable Medicaid eligibility rules. Indiana is one of the first four states (along with California, Connecticut and New York) to offer such an innovative long term care financing program.
Since 2006 with the passage of Federal legislation (Deficit Reduction Act of 2005), additional states have implemented Partnership Programs. Taking and keeping control of your financial independence and emotional peace-of-mind has never been easier.
Partnership policies contain a special State-added feature known as "Medicaid Asset Protection." With this feature, Partnership policies offer Indiana residents a way to provide for their long term care needs without the fear of having to spend down their life savings. These policies guarantee that the buyer will receive asset protection from Medicaid eligibility spend down and from Medicaid estate recovery at least equal to the amount of benefits used.
Medicaid Asset Protection
Medicaid asset protection is a feature found in Indiana Long Term Care Insurance Program insurance policies (better known as "Indiana Partnership policies"). Medicaid asset protection allows you, the policyholder, to keep more assets than is normally allowed when, and if, you need help with long term care from the Indiana Medicaid Program. Only assets---not income---are protected.
There are two types of asset protection--Total and Dollar-for-Dollar.
"Total asset protection" means all of your assets will be disregarded during the Indiana Medicaid eligibility process, should you choose to apply for help from Indiana Medicaid.
"Dollar-for-dollar asset protection" means that you will be allowed to retain one dollar of your assets for every one dollar of benefits used in your Partnership policy. However, any remaining assets will be considered (unless otherwise protected by law) during the Indiana Medicaid eligibility process.
Whether you receive total or dollar-for-dollar asset protection depends on:
o The amount of Partnership insurance you initially bought, and
o The amount of benefits you use under your policy, and
o The inflation feature in your policy.
If you initially purchase a Partnership policy with less than the State-set dollar amount* in benefits, one dollar of assets (dollar-for-dollar) is protected for each dollar of Partnership policy benefits paid out. If you initially purchase a Partnership policy with at least the State-set dollar amount* and have a 5% compound inflation factor, all of your assets (total asset) are protected once the policy has paid out all benefits.
For example, if you bought a Partne
2. History of the Indiana Long Term Care Insurance PartnershipState legislation for the Indiana Long Term Care Insurance Program (ILTCIP) referred to as Partnership was passed in 1987. Federal approval was received in December 1991 with the first Indiana Partnership policies available for sale in May 1993.
The statute was modified in 1994 to allow a Partnership facility-only policy. In 1997, additional legislation provided funding for the Partnership program, moved the program to the Office of Medicaid Policy and Planning (OMPP), and allowed OMPP to establish reciprocity with other states' LTC Partnership programs.
Other legislation in 1998 expanded the asset protection feature to include both dollar-for-dollar and total asset protection. Tax legislation was passed in 1999 providing a state tax deduction for premiums paid for Partnership policies beginning with tax year 2000.
Identified below are the significant activities and legislation that was implemented to create the Indiana Long Term Care Insurance Program Partnership:
1987 - Bi-partisan State legislation establishing the Indiana Long Term Care Insurance Program
1991 - Federal approval received in December for Indiana's Medicaid State Plan Amendment
1993 - Adoption of final rules for Program policies; Governor Bayh held a press conference on May 17, 1993 announcing the availability of Indiana Long Term Care Insurance Program policies
1994 - Program statute was amended to allow facility-only policies
1997 - Legislation moved the Indiana Long Term Care Insurance Program to the Office of Medicaid Policy and Planning with state funding provided for the program. (Funding for the Program until 1998 was primarily through grants from the Robert Wood Johnson Foundation)
1998 - Asset protection under the Program was expanded to include both dollar-for-dollar and total asset protection
1999 - Legislation passed providing a state tax deduction for premiums paid for Indiana Long Term Care Insurance Program policies beginning with tax year 2000
2006 - Federal Deficit Reduction Act of 2005 (DRA 2005) passed allowing additional states to implement Long Term Care Partnership Programs
2006 - The Indiana Long Term Care Insurance Program was moved to the Department of Insurance
2009 - April 1 - Indiana approved to join the National Reciprocity Compact for states with Partnership LTC programs
o Rapidly increasing Medicaid expenditures for nursing home care
o Rapidly growing elderly population in the state, especially in the number of persons age 85+, the heaviest users of long term care services
o Limited extent to which people were using private insurance to protect against the high cost of long term care
o Variability in the quality of long term care insurance policies and benefits provided under these policies
o Medicaid as the only public program providing significant financial relief to seniors that requires financial spend down to qualify
o To stimulate the availability of high quality, affordable long term care insurance
o To provide a means by which Hoosiers could plan to finance their own long term care needs without the fear of impoverishment
o To contain the growth of Medicaid expenditures for long term care by encouraging purchase
3. Purpose of the Indiana Long Term Care Insurance PartnershipLong term care refers to a wide range of services and supports designed to help individuals who are unable to care for themselves because of a prolonged illness, disability, frailty or mental deterioration. Care is provided to assist individuals with everyday activities we take for granted such as bathing, continence, dressing, eating, toileting, and transferring (moving about). This care can be provided on different levels such as in-home care, adult day care, assisted living, or nursing home and may be provided on a short-term basis or for several years.
Your likelihood of needing long term care increases as you get older, if you live alone, and if you're a woman. Your family and individual medical history also play a major role in determining whether or not you will need long term care.
General population statistics are very informative. Approximately 70 percent of Americans over the age of 65 will need some level of long term care services in their lifetime with 40 percent needing care in a nursing home.C1 The average length of stay in a nursing home is 2.6 years.C2 Older persons aren't the only ones needing long term care. Over 40% of Americans receiving long term care are between the ages of 18 and 64.C1 No one really knows at what age he or she may experience a paralyzing accident, suffer a stroke, or be diagnosed with Parkinson's or Alzheimer's disease or some other debilitating condition.
Long term care can be very expensive. The average cost of nursing home care in Indiana is more than $70,000 a year (costs will vary by geographical area). Assisted living facility care costs an average of $40,000 a year. In-home care can be costly too, with the annual price of five home health aide visits a week, providing care for five hours each day, costing $30,000. Plus, the cost of long term care has been rising approximately 5% each year.C2
The purpose of the Indiana Long Term Care Insurance Partnership is to:
o Provide incentives for the purchase of private long term care (LTC) insurance policies through a partnership between the Medicaid program and insurance companies
o Help Hoosiers plan for their LTC needs without fear of impoverishment
o Assist the State with containing the growth of Medicaid expenditures
o Increase public understanding of LTC risks, costs, and financing
To identify a Partnership policy, look for the following box on the front page of the policy, the outline of coverage, and the application: C4
C1 "Who Needs Long Term Care", National Clearing House for Long Term
Care Information. www.longtermcare.gov
C2 "2010 MetLife Market Survey of Nursing Home, Assisted Living, Adult
Day Services & Home Care Costs", MetLife Mature Market Institute.
C3 "Who will pay for the baby boomers' long-term care needs?" American
Council of Life Insurance (2005).
This policy [CERTIFICATE] qualifies under the Indiana Long Term Care insurance Program for Medicaid Asset Protection. This policy [CERTIFICATE] may provide benefits in excess of the asset protection provided in the Indiana Long Term Care insurance Program.
4. Participating Insurance CompaniesINSURANCE COMPANIES
Insurance Companies Telephone Number *Policy Types
Bankers Life and Casuality Co. 888-282-8252 TQ Comprehensive
TQ Facility Only
Genworth Life Insurance Company 800-456-7766 TQ Comprehensive, (Individual/Group)TQ Facility Only
John Hancock Life Insurance Co. (USA) 800-377-7311 TQ Comprehensive
Massachusetts Mutual Insurance Company 800-272-2216 TQ Comprehensive,
TQ Facility Only
TransAmerica Life Insurance 800-227-3740 TQ Comprehensive
Thrivent Financial for Lutherans 800-847-4836 TQ Comprehensive
* TQ = Meets standards for federal tax breaks
* Comprehensive = Includes coverage for nursing facility, home, and community care