Federal Partnership Program
The Commonwealth of Kentucky participates in the national long-term care partnership program authorized under the federal Deficit Reduction Act of 2005. The Kentucky Long-Term Care Insurance Partnership Program is an agreement between the state government and private insurance companies to assist consumers in planning for their long-term care (LTC) needs. The program was designed to increase awareness of issues related to long-term care, to create ways to reduce Medicaid costs for nursing, home care, and to provide an incentive to consumers to purchase qualified long-term care policies to protect assets from Medicaid spend-down requirements.
These policies provide benefits for care at home or in a facility, in addition to the asset protection of the partnership program. Generally, an unmarried person would not qualify for Medicaid until he/she has assets of $2,000 or less. For example, if you have $100,000 in assets (stocks, bank accounts, etc.),
Medicaid would require you to spend $98,000 in assets before you could be eligible for benefits. However, if you have a long-term care partnership policy that paid $50,000 in benefits, Medicaid would disregard $50,000 meaning you would be required to spend $48,000 before being eligible.
Keep in mind that asset protection (also known as asset disregard) is based on the amount the insurance company pays in benefits, not the value of the policy or the amount of premiums you have paid. So, if your policy paid $350,000 in benefits your asset disregard is worth $350,000. 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 Kentucky. This means if you move from or to Kentucky your partnership asset protection follows you as well.
Long-Term Care Medicaid spend down is $2,000. A spouse’s minimum asset allowance is 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, Kentucky 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 Kentucky
There are several products approved in Kentucky for Long-Term Care planning. These include traditional plans, including partnership certified policies, short-duration policies, and asset-based “hybrid” plans.
The Commonwealth of Kentucky also offers state tax incentives to encourage consumers to buy policies. A taxpayer may deduct from Kentucky Adjusted Gross Income any amounts paid for LTC insurance as defined in the Kentucky Code.
*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.