Minnesota participates in the federal/state long-term care partnership program. The Minnesota Long-Term Care Partnership is a public/private arrangement between long-term care insurers and Minnesota’s Medical Assistance program. It enables Minnesota residents who purchase certain long-term care insurance policies to have more of their assets protected if they later need the state to help pay for their long-term care expenses. Minnesota is using this approach to give persons greater control over how they finance their long-term care and to help shore up the public safety net against coming demographic pressures.
This program, authorized by federal law, provides a policy owner dollar-for-dollar asset protection in the event they exhaust benefits and need to access Medicaid Long-Term Care Benefits.
A Minnesota Long-Term Care Partnership policy allows a person to protect assets beyond the $3,000 amount an individual usually must spend-down in assets. Under the Minnesota Long-Term Care (LTC) Partnership, a person who buys and uses a policy to pay for LTC is able to protect their assets if they later need to apply for Medicaid which is known as Medical Assistance in Minnesota. Assets protected under a LTC Partnership policy are protected from estate recovery.
If your Minnesota Partnership Long-Term Care policy pays $350,000, for example, that same amount will be disregarded when calculating the spend-down requirements for Medical Assistance. So, this individual could protect $350,000, plus the $3000 normally allowed and still access Medical Assistance.
Long-Term Care Medicaid spend down is $3000. A spouse’s minimum asset allowance is $33,851.
Most states have reciprocity with other states' long-term-care partnership programs including Minnesota. This means if you move from or to Minnesota your additional partnership asset protection will be honored.
Minnesota has a state income tax credit equal for qualified long-term care insurance policies. You may claim this tax credit if you purchase long-term care insurance for yourself or your spouse. To be eligible for the Minnesota Long-Term Care Insurance Credit, both of the following must be true: The policy you purchased qualifies as a federal deduction (disregarding the 7.5 or 10 percent income test). For more information, view IRS Publication 502, Medical and Dental Expenses. The policy has a lifetime benefit limit of $100,000 or more. The credit amount is equal to 25 percent of the policy premium(s), up to $100 per beneficiary. For married couples, one policy covering both spouses will be eligible for the $200 maximum credit; separate policies or premiums are not required.
The federal tax incentives also apply.
A variety of products are approved in Minnesota for Long-Term Care planning.
Minnesota Long-Term Care Costs
|Home Health Aide||Average Monthly Rate||$5,529|
|Homemaker Services||Average Monthly Rate||$5,148|
|Adult Day Care||Average Monthly Rate||$1,798|
|Assisted Living||Average Monthly Cost||$4,000|
|Skilled Nursing Home||Semi-Private Monthly||$9,125|
|Skilled Nursing Home||Private Average Monthly||$10,188|