What Does Long-Term Care Insurance Cover in Minnesota?
All long-term care insurance policies sold in Minnesota must contain the following consumer protections:
At least one year of nursing home or home health care coverage, including intermediate and custodial care. Health care benefits cannot be limited to "skilled care" only.
Coverage for Alzheimer's disease.
Cannot require prior hospitalization to receive nursing home benefits.
An inflation protection option.
Protects individuals from being singled out for rate increases.
All policies are "guaranteed renewable" which means the insurance company can only cancel your policy if you fail to pay your premium.
Minnesota Long Term Care Partnership
Minnesotans who purchase certain long-term care insurance policies will be able to protect more of their assets under the Minnesota Long Term Care Partnership. The Partnership is intended to give people greater control over how they finance their long-term care.
Usually, in order to qualify for Medical Assistance, a consumer must first draw down his or her personal assets. The Long Term Care Partnership gives Minnesota consumers the ability to protect assets up to the amount of long-term care coverage they purchase.
For example, consumers who purchase $100,000 of coverage would be able to keep an additional $100,000 of their assets if benefits from a long-term care policy are exhausted and they need to apply for Medical Assistance.
The Long Term Care Partnership program is administered by the Minnesota Department of Human Services. For more information visit the Long Term Care Partnership website or call the Senior LinkAge Line at 800-333-2433.
Minnesota provides a $100 tax credit for people purchasing a long-term care insurance policy (either qualified or non-qualified) with at least $100,000 of coverage and inflation protection. This tax credit is limited to one per person, per year.
The federal government qualifies a policy for certain tax benefits if there are specific consumer protection features and benefit restrictions in the policy. Before deciding which policy to buy, you may want to consult a tax specialist.
In addition, long-term care insurance provided by an employer is treated as any other health plan. Premiums paid by an employer for an employee (or spouse or dependents) are excluded from employment taxes and are 100% deductible by the employer. Benefit amounts received are excluded from income. In addition to providing tax advantages, long-term care insurance is also a way for companies to mitigate some of the cost to companies resulting from lost productivity due to elder care responsibilities.
Many of today's policies cover short or long-term nursing home stays and a wide range of home care services, such as skilled or non-skilled nursing care, physical therapy, home making, and the services of home health aides provided by state licensed and/or Medicare certified home health agencies. Some policies may also cover adult daycare, respite care for the caregiver, and other specialized or alternative forms of care.
All policies contain limitations and exclusions--otherwise, premiums would become unaffordable. Some exclude coverage for pre-existing conditions for six months. Other policies may not cover certain mental and nervous disorders, alcoholism, drug abuse, or an intentionally self-inflicted injury. Many policies will not cover long-term care provided by family members.
Long-term care policies generally limit benefits to a maximum dollar amount or a maximum number of days and may have separate benefit limits for nursing home care and home health care within the same policy. For example, a policy may cover five years of nursing home care and two years of home health care.
Yes. The law allows companies to include a 90-day or 180-day pre-existing clause in the policy. This means you would not receive long-term care benefits during the first six months after your policy was issued for any condition or illness that was diagnosed or that you were treated for during the 90 or 180 days immediately before the effective date of your policy. You would pay for any services related to the pre-existing condition during this period.
You may not be able to purchase long-term care insurance after you have been diagnosed with Alzheimer's disease, but once you have a long-term care policy in force Minnesota law does not allow companies to limit benefits just because you develop Alzheimer's or your health deteriorates.
Most premiums for long term care are "level," meaning they don't automatically increase as you age or your health status changes. However, the insurance company can raise rates for an entire rating class of people in the state, after review and approval from the Minnesota Department of Commerce.
There might be situations where canceling an existing policy and buying a new one makes sense. Just remember that your premiums are based on your age at the time of purchase and could be much higher for the new policy. In most cases, any waiting periods for pre-existing conditions with the new replacement policy will be waived, but you should verify this in writing with the new company or agent. None of the premiums you paid for the old policy will give you any benefit. Never drop an old policy before making sure the new one is in force.