The State of Texas participates in the federal/state long-term care partnership program. The program, authorized by the federal Deficit Reduction Act of 2005 (DRA) and signed into law by President George W. Bush, gives the states the ability to provide additional asset protection to those who purchase qualified long-term care insurance policies.
The Texas Long-Term Care Insurance Partnership is a collaborative effort between private long-term care insurance providers, their authorized agents, and state government agencies. These agencies include but are not limited to the Texas Department of Insurance, the Texas Health and Human Services Commission, and the Texas Department of Aging and Disability Services.
Texas participates in the program as an incentive for Texans to plan for their long-term care needs. The partnership is a joint effort between private insurers and the state. Insurers must follow state and federal guidelines to sell partnership policies. Partnership policies have an “asset disregard” benefit, inflation protection, and tax-qualified status.
For example, if Texans exhaust the benefits in their qualified long-term care policies, they would have an equal amount of “asset disregard”. If the policy paid $350,000 in benefits, an individual would be able to protect that amount when calculating qualification for Medicaid long-term care benefits. The normal spend-down is $2000 so the individual could keep $2000 plus the $350,000 from the example and still be able to qualify for Medicaid benefits.
Long-Term Care Medicaid spend down is $2000. A spouse’s minimum asset allowance is $24,720.
Most states have reciprocity with other states' long-term-care partnership programs including Texas. This means if you move from or to Texas, partnership asset protection follows you as well.
Texas does not offer any state tax incentive for qualified long-term care insurance as there is no state income tax. However, federal tax incentives are available.
A variety of products are approved in Texas for Long-Term Care planning.
Texas Long-Term Care Costs
|Home Health Aide||Average Monthly Rate||$3,813|
|Homemaker Services||Average Monthly Rate||$3,813|
|Adult Day Care||Average Monthly Rate||$758|
|Assisted Living||Average Monthly Cost||$3,795|
|Skilled Nursing Home||Semi-Private Monthly||$4,798|
|Skilled Nursing Home||Private Average Monthly||$6,540|