Federal Partnership Program
The State of Louisiana has joined most states in the federal/state long-term care partnership program to help its residents protect their hard-earned assets from the high costs of long-term health care.
The program, approved by state law and authorized by the federal Deficit Reduction Act (DRA)of 2005, offers individuals a way to protect their assets in the event they exhaust the benefits in their qualified long-term care insurance policy. This allows the person to access long-term care Medicaid services without the normal spend-down requirements. The initiative encourages citizens to partner with the state-based program as they purchase qualified private long-term care insurance policies.
The Louisiana Long-Term Care Partnership Program provides asset disregard equal to the total amount of benefits paid by your LTC insurance policy. For example, if your policy paid $275,000 in benefits, the state will disregard that amount from the required spend-down. A single person must spend-down to $2000 in total assets to normally qualify for Medicaid’s long-term care benefits. If the person had $300,000 in assets, they would have to spend $298,000. However, if that person’s policy paid $275,000 before it was exhausted and the individual still needed long-term care, the state would ignore that $275,000. The spend-down would only be $23,000 (300,000- 277,000 [275,000 paid in benefits, + the 2000 Medicaid allows]). This protects your estate from total spend-down. 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 Louisiana. This means if you move from or to Louisiana your partnership asset protection follows you as well.
Long-Term Care Medicaid spend down is $2,000. A spouse’s minimum asset allowance is $128,640. Your spouse’s minimum monthly income allowance is $3,216. * The home equity limit is $595,000.
For more information about the Medicaid program visit www.medicaid.gov.
Rate Stability Rules
In addition, Louisiana 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 Louisiana
There are several types of products available in Louisiana for Long-Term Care planning. These include traditional plans, including partnership certified policies, short-duration policies, and asset-based “hybrid” plans.
Louisiana offers a state tax credit if you have a long-term care insurance policy. The credit is against the individual income tax for amounts paid as premiums for eligible LTC insurance. The amount of the credit shall be equal to 10% of the total amount of premiums paid annually by each individual claiming the credit and must meet the specified qualification requirements.
*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.