Vermont Long-Term Care

Federal Partnership Program

In 2010, the state of Vermont enacted legislation enabling the establishment of the Vermont Long-Term Care Partnership Program. This allows Vermont residents who purchase a qualified partnership policy the ability to safeguard assets in a long-term care situation. State law will require a Long-Term Care Partnership policy to meet certain requirements. These requirements are set forth in Section 1917(b)(5)(A) of the Social Security Act and in Section 7702(B) of the Internal Revenue Code, and include certain provisions of the National Association of Insurance Commissioners (NAIC) Long-Term Care Model Regulation and Model Act.

Although Vermont has approved legislation which calls for the establishment of a state partnership program and has adopted rules that reflect the Deficit Reduction Act’s requirements and the NAIC’s standards for Qualified Long-Term Care Insurance partnership policies, the state has not yet filed a state Medicaid plan amendment with the Centers for Medicare and Medicaid Services (CMS) which is required by federal law.

Policy Example

When partnership policies become available that provide the policyholder with dollar-for-dollar asset protection otherwise known as “asset-disregard”. In the event the policy benefits are exhausted you would have an equal amount of asset protection when the calculation is made to qualify for the Medicaid long-term care benefit. For example, if the policy paid $420,000 in benefits you would be able to retain that same amount and still qualify for the Vermont Medicaid (Choices for Care) program. In calculating your eligibility, the state will disregard an amount of your assets equal to the amount the partnership policy paid in long-term care benefits.

Reciprocity

Most states have reciprocity with other states' long-term-care partnership programs, however, Vermont has yet to make a determination. 

Medicaid

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 $2,057.50 * 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

Vermont 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 Vermont

A variety of products are approved in Vermont for Long-Term Care planning including traditional plans and asset-based “hybrid” policies.

Tax Incentives

Vermont does not offer any state tax incentive for qualified long-term care insurance. Federal tax incentives are still 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.}