Federal Partnership Program
The State of Washington participates in the federal/state long-term care partnership program. The program, as authorized by federal law, provides “dollar-for-dollar” asset protection if a policyholder exhausts the benefits from his/her qualified LTC insurance policy.
The Long-Term Care (LTC)Partnership Program is a joint Medicaid/private company venture designed to encourage individuals to purchase long-term care insurance so families can protect savings and the state government can protect the budget for the Medicaid program. When people plan for their own long-term care expenses with private LTC insurance, it places less pressure on the state programs that would otherwise need to provide assistance for those expenses.
This allows families to protect their assets for estate preservation in an amount equal to the benefits paid by the qualified long-term care policy. For example, if your Washington Long-Term Care Partnership policy paid $300,000 in benefits that same amount would be disregarded in the calculation for the spend-down requirements for Medicaid. 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 Washington. This means if you move from or to Washington your partnership asset protection follows you as well.
Long-Term Care Medicaid spend down is $2,000. A spouse’s minimum asset allowance is $54,726. Your spouse’s minimum monthly income allowance is $2,057.50 *
For more information about the Medicaid program visit www.medicaid.gov
Rate Stability Rules
In addition, Washington 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.
Washington Long-Term Care Trust Act
This is a tax support long-term care benefit program providing state residents with up to $36,500 in benefits to pay for care at home and other services. To qualify for these benefits, you first must need assistance with normal activities-of-daily-living like eating, bathing, toileting or even with assistance with medications.
The program is funded with a payroll tax of 0.58 percent on employees. The state won’t start to collect the tax until January of 2022, and won’t start paying benefits until 2025. Keep in mind, despite the name, this really isn’t “long-term care”. It also provides a small benefit. While not a replacement for Long-Term Care Insurance, it can be helpful for many people and will work well with qualified Long-Term Care Insurance policies. The benefits paid by the state program will NOT count toward asset protection under the partnership program.
Products Approved in Washington
A variety of products are approved in Washington for Long-Term Care planning including traditional plans, along with certified partnership policies, and asset-based “hybrid” policies.
Washington does not offer any state tax incentive for qualified long-term care insurance. Federal tax incentives are 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.