Federal Partnership Program
Delaware participates in the federal/state partnership program as of November of 2011. A Delaware Partnership Long-Term Care insurance policy provides you with additional asset protection as authorized under the federal Deficit Reduction Act (DRA). If you spend down all the money in your qualified LTC policy you will have the ability to apply for Medicaid under modified eligibility rules that include a special feature called an ‘asset disregard’ or “dollar-for-dollar” asset protection.
The policy must meet state guidelines and have the appropriate inflation protection as required by law. The state will not attempt to recover any money from the estate equal to the amount of benefits protected under your partnership long-term care policy.
The asset protection is equal to the amount of benefits paid by the policy. For example, your Delaware Long-Term Care Partnership policy pays out $480,000 in benefits when you exhaust benefit, however, you are still living and require long-term care services. The state disregards that same amount in the calculation for the Medicaid Long-Term Care benefit. This way you are able to keep a much larger amount of assets then you would otherwise be allowed to keep and still qualify for Medicaid. The Partnership Program also protects those assets after death from Medicaid estate recovery.
Most states have reciprocity with other states' long-term-care partnership programs including Delaware. This means if you move from or to Delaware your partnership asset protection follows you as well.
Long-Term Care Medicaid spend down is $2,000. A spouse’s minimum asset allowance is a minimum of $25,728 up to a maximum of one-half of countable assets up to $128,640. Your spouse’s minimum monthly income allowance is $2,113.75 * The home equity limit is $595,000.
For more information about the Medicaid program visit www.medicaid.gov
Rate Stability Rules
In addition, Delaware consumers enjoy additional peace-of-mind as the state has adopted Long-Term Care Insurance Rate Stability Rules. These rules, developed the National Association of Insurance Commissioners, makes it much harder for an insurance company to get an approved rate increase.
Products Approved in Delaware
A variety of affordable products are approved in Delaware for Long-Term Care planning. These include traditional plans (including partnership certified policies), short-duration plans and asset-based “hybrid” plans.
There are no current state tax incentives available at this time, federal tax incentives do apply.
*The federal government sets a new minimum and maximum amounts each year, but states can set their own minimum requirements at any level between the federal limits. This information is based on the best available sources