Federal Partnership Program
The State of New Jersey is a participant in the federal/state long-term care insurance program. Established according to guidelines under federal law, the program provides additional asset protection to those who purchase a qualified partnership long-term care insurance.
The idea is to stimulate the development of an expanded private long-term care insurance market in the state, which would relieve financial pressure on the Medicaid programs associated with funding long-term care. For consumers, it protects many who would otherwise deplete their life savings paying for long-term care before being eligible to qualify for Medicaid coverage for their long-term care costs.
The State of New Jersey feels it is in the public interest to provide statutory authorization for a long-term care partnership program in accordance with the provisions of the federal “Deficit Reduction Act of 2005,” Pub.L.109-171. Qualified New Jersey Partnership Long-Term Care Insurance provides disregard of certain assets with respect to Medicaid eligibility for persons who purchase and receive benefits from a policy that meets the requirements of federal law.
This is known as “dollar-for-dollar” asset protection. It allows an individual to keep assets in the amount equal to the long-term care benefits paid and not be subjected to spend-down requirements.
If your New Jersey Partnership Long-Term Care insurance policy paid $650,000 in benefits you would be able to shelter that same amount when they calculate your eligibility for the Medicaid Long-Term Care benefit. You would, in this example, be able to preserve the $650,000 in addition to the normal allowance and still qualify for the Medicaid benefit. 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 New Jersey. This means if you move from or to New Jersey 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 $893,000.
For more information about the Medicaid program visit www.medicaid.gov.
Rate Stability Rules
In addition, New Jersey 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 New Jersey
Several products are approved in New Jersey for Long-Term Care Planning. These include traditional plans, in addition to partnership qualified policies, and asset-based “hybrid” policies.
New Jersey also offers a state tax incentive for those who own a qualified long-term care insurance policy. The law allows a deduction for medical expenses (including LTC insurance premiums for taxpayers, their spouses or dependents) to the extent such expenses exceed 2% of taxpayer’s gross income. Federal tax incentives are also available.
*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.