On July 17, 2007, Governor Edward G. Rendell signed Act 40 into law in an effort to address the growing need for long-term care services. Act 40 grants strong consumer protections for purchasers of long-term care insurance and establishes a “Long-Term Care Partnership.” This program offers Pennsylvanians the opportunity to provide for their own needs while helping to conserve taxpayer resources.
Authorized under federal law (Deficit Reduction Act of 2005), Long-Term Care Partnership encourages Pennsylvanians to purchase long-term care insurance by providing asset coverage equal to the benefits paid by the policy. This is called dollar-for-dollar asset protection. For example, a person whose qualifying policy paid $300,000 in benefits for care would be entitled to keep $300,000 in assets if that individual needed to apply for Medical Assistance (Medicaid) after exhausting benefits in the LTC insurance policy. This is referred to as “dollar-for-dollar asset protection.”
Normally individuals must spend down, or exhaust, their resources, leaving many families reliant on public assistance. People who purchase a Pennsylvania Long-Term Care Partnership Policy may still qualify for Medical Assistance after depleting their insurance benefits, without losing the asset protection the partnership policy provides.
The Commonwealth of Pennsylvania says Long-Term Care is a personal responsibility — its risk and cost should not be ignored. Medical Assistance is a safety net, but only for those truly in need. Everyone who is financially and medically qualified should begin now to save, invest, and insure for long-term care.
Long-Term Care Medicaid spend down is $2400. A spouse’s minimum asset allowance is $24,720.
Most states have reciprocity with other states' long-term-care partnership programs including Pennsylvania. This means if you move from or to Pennsylvania your partnership asset protection follows you as well.
Pennsylvania does not offer any state tax incentive for qualified long-term care insurance. However, federal tax incentives are still available.
A variety of products are approved in Pennsylvania for Long-Term Care planning.
Pennsylvania Long-Term Care Costs
|Home Health Aide||Average Monthly Rate||$4,315|
|Homemaker Services||Average Monthly Rate||$4,195|
|Adult Day Care||Average Monthly Rate||$1,408|
|Assisted Living||Average Monthly Cost||$3,750|
|Skilled Nursing Home||Semi-Private Monthly||$9,614|
|Skilled Nursing Home||Private Average Monthly||$10,114|