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 $15,450. A spouse’s minimum asset allowance is minimum of $74,820 up to a maximum of one-half of countable assets up to $128,640. Your spouse’s minimum monthly income allowance is $3,216. * The home equity limit is $893,000.
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 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.