New York was one of the original long-term care partnership states offering asset protection when owning a qualified LTC policy. There are a wide variety of care providers in the state, but costs are increasing rapidly due to increasing demand for services and rising labor costs.
Quality care options are available throughout New York, and several insurance solutions are available. However, rapidly increasing costs for care services statewide are becoming burdensome on residents and their families for those who do not have Long-Term Care Insurance.
Care options that are available in New York for those people who require long-term health care services, include:
- adult day care centers
- assisted living facilities
- continuing care retirement communities
- home health care providers
- memory care facilities
- rehabilitation facilities
- traditional nursing homes
Top insurance companies have several insurance options to help residents safeguard income and assets, protect lifestyles, and preserve a legacy. Plus, policyholders will have access to quality care options giving loved ones the time to be family instead of caregivers.
Federal Partnership Program
The State of New York was one of the four original long-term care partnership states. The New York State Partnership for Long Term Care is a program that combines private LTC Insurance and Medicaid Extended Coverage. The purpose of the program is to help residents of New York prepare financially for LTC services (nursing home care, home health care, and assisted living). If you buy a New York State Long Term Care Partnership policy and use the benefits according to the conditions of the program, you can apply for MEC, which may assist in paying for your on-going care. Unlike regular Medicaid, MEC allows you to protect some or all of your assets, depending on whether you select a Dollar for Dollar Asset Protection plan or a Total Dollar Asset Protection plan. However, MEC does require that you contribute your income to the cost of your care according to Medicaid income rules.
To see a map of states that participate in reciprocity, click here: www.nyspltc.health.ny.gov
New York State Long-Term Care Partnership plan provides two options. Total Asset Protection or Dollar-for-Dollar Asset Protection. With total asset protection, your partnership policy would protect 100% of your assets in the event you were to exhaust your benefits during a claim on your policy. With a dollar-for-dollar policy, the total amount of benefits paid by the policy would be the amount of assets you are able to shelter. For example, if your policy paid $550,000 in benefits you would be able to keep that same amount and still qualify for Medicaid Extended Coverage.
Most states have reciprocity with other states' long-term-care partnership programs including New York. This means if you move from or to New York your partnership asset protection follows you as well. In reciprocal states, Total Dollar Asset Plans will be considered Dollar for Dollar Plans, or plans that allow for the disregard of assets under Medicaid up to the total amount of benefits paid out by the insurer on behalf of the covered person.
Long-Term Care Medicaid spend down is $15,900. A spouse’s minimum asset allowance is minimum of $74,820 up to a maximum of one-half of countable assets up to $130,380. Your spouse’s minimum monthly income allowance is $3,259.50. * The home equity limit is $906,000.
For more information about the Medicaid program visit www.medicaid.gov.
Products Approved in New York
A variety of products are approved in New York for Long-Term Care planning. These include traditional plans, including partnership certified policies and asset-based “hybrid” policies.
A tax credit for 20% of Long Term Care Insurance premium paid for a qualified policy approved by the state superintendent of insurance. Persons paying the premium for others are also eligible for the tax credit (as well as their own policy, if applicable) regardless of other’s tax dependency status; i.e., the adult child could pay a premium for parents and get a tax credit even if parents are not dependents. A tax credit is not refundable; however, unused credits may be carried forward.
Determination of adjusted gross income generally conforms to the federal income tax code.
A credit for personal income tax is allowed equal to 20% of the premium paid during the taxable year for qualified LTC insurance. A credit is allowed against the corporation tax equal to 20% of the premiums paid during the taxable year for qualified LTC insurance. The credit may not reduce the tax payable to less than the state minimum tax, but any excess credit may be carried forward. An S-corporation is allowed a credit against the personal income tax.
The taxpayer can only claim the credit if their New York adjusted gross income (NYAGI) is less than $250,000. The credit amount cannot exceed $1,500. Nonresident taxpayers and part-year resident taxpayers are subject to the limitations for resident taxpayers and compute the credit by multiplying the credit amount determined for a resident by the nonresident’s New York source fraction as defined in New York Tax Law section 601(e)(3).
New York is one of several states that is considering following the State of Washington in implementing a tax on income for any person who does not own a qualified Long-Term Care Insurance policy.
What is unknown is if they implement the tax plan if they will offer any reasonable time for state residents to purchase qualified policies if they do not already own one.
It is highly recommended to speak with a qualified specialist to consider your options - Work With a Specialist | LTC News
Reverse Mortgages in New York
Reverse mortgages are available in New York. A reverse mortgage is a home equity loan where the borrower does not have to make payments.
This type of mortgage can increase monthly income, eliminate mortgage payments, and even fund Long-Term Care Insurance. However, there are many rules in New York on these products, and you should seek the help of a qualified and licensed mortgage broker.
If you have significant equity in your home and you and your spouse are at least 62 years old, you can get a reverse mortgage to turn your equity into funding long-term health care, pay for an LTC Insurance policy, pay bills and add to your retirement lifestyle.
The home must be the principal residence without any tax liens.
Learn more about reverse mortgages by clicking here.
*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.