long-term care partnership (ltcp) and ma asset protection beth weber health care programs policy
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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
www.mnltcpartnership.org3
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 = $__________.
www.mnltcpartnership.org4
Who pays for LTC?Medicaid/
Medical Assistance
47%
Out-of-pocket 21%
Medicare 17%
Insurance 10%
Other 5%
Source:
Georgetown Health Policy Institute, 2004
www.mnltcpartnership.org5
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.
www.mnltcpartnership.org6
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
www.mnltcpartnership.org7
Partnership Sponsors
Counties
Insurers
Producers Dept. of Commerce
Consumers
Senior LinkAge
Line
DHS
Partnership
www.mnltcpartnership.org8
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
www.mnltcpartnership.org9
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
www.mnltcpartnership.org10
MA-LTC Assets
o $3,000 countable assets
o Interest in annuity
o $500,000 home equity limit
o Uncompensated transfer penalties
www.mnltcpartnership.org11
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?
www.mnltcpartnership.org12
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.
www.mnltcpartnership.org13
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
www.mnltcpartnership.org14
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
www.mnltcpartnership.org15
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 ______________.
www.mnltcpartnership.org16
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.
www.mnltcpartnership.org17
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.
www.mnltcpartnership.org18
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.
www.mnltcpartnership.org19
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.
www.mnltcpartnership.org20
Assets that Cannot be Protected
o Pooled trust o Special needs trusto Certain annuitieso Portion of an asset owned by
another person
www.mnltcpartnership.org21
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
www.mnltcpartnership.org22
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.
www.mnltcpartnership.org23
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.
www.mnltcpartnership.org24
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.
www.mnltcpartnership.org25
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
www.mnltcpartnership.org26
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
www.mnltcpartnership.org27
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
www.mnltcpartnership.org28
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
www.mnltcpartnership.org29
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.
www.mnltcpartnership.org30
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.
www.mnltcpartnership.org31
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
www.mnltcpartnership.org32
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?
www.mnltcpartnership.org33
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.
www.mnltcpartnership.org34
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?
www.mnltcpartnership.org35
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?
www.mnltcpartnership.org36
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.
www.mnltcpartnership.org37
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
www.mnltcpartnership.org38
MA-LTCP Summary
MA-LTCP Puzzle o History of LTC Partnershipo Qualified Partnership Policies o Interaction between MA and
LTCP in Minnesota
www.mnltcpartnership.org39
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
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