The concept of a public-private partnership for long term care financing began in the 1980s as a pilot program in four states – California, Connecticut, Indiana and New York. Minnesota first considered the idea in 1992, when the legislature required a feasibility study. However, at the time federal law changes made it difficult for new states to enact such plans until the Deficit Reduction Act removed restrictions in 2006. The Long Term Care Partnership in Minnesota took effect on July 1, 2006.
The Minnesota Long Term Care Partnership uses both private and public funds to pay for long-term care. Buying a private Minnesota Long Term Care Partnership insurance policy allows a person to keep more of their assets, if they later need to request Medical Assistance to help pay for their long-term care services. It reduces Medical Assistance costs by encouraging people to buy long-term care insurance. It also rewards people who purchase the policy by allowing them to retain assets on a dollar for dollar basis equal to the amount of benefits paid out by a qualified long-term care partnership insurance policy as of the effective date of Medical Assistance eligibility.
Because at least 70 percent of Minnesotans over age 65 will need long-term care services at some point in their lives. Unfortunately, most people do not think about how they will pay for their long-term care services until a health crisis occurs which can mean it may be too late to consider buying a policy.
Peace of mind. A Minnesota Long Term Care Partnership insurance policy gives the policyholder more control over their long-term care needs and helps protect their financial resources. If a policyholder later has to apply for Medical Assistance payment of long-term care services, the amount of long-term care benefits previously paid by the policy as of the effective date of Medical Assistance eligibility may be used to protect assets from Medical Assistance recoveries.
The Minnesota Long Term Care Partnership fits into the state’s mission of encouraging Minnesotans to plan ahead for how they want to live in their later years, including meeting their own long-term care needs. It encourages people to take greater control over how they pay for their long-term care, and helps to reduce the pressure on the current system of publicly funded long-term care. Own Your Future also focuses on this mission.
No, the State of Minnesota does not sell insurance policies. Minnesota Long Term Care Partnership policies are sold by insurance companies and licensed insurance agents. The Minnesota Department of Commerce reviews, approves and certifies all Minnesota Long Term Care Partnership policies to ensure the policies comply with required laws.
Generally, to receive MA payment for Long-Term Care, an individual’s counted assets must be at or below the Medical Assistance asset limit. In most instances, the counted asset limit is $3,000. A Minnesota Long Term Care Partnership insurance policy allows an individual to protect assets beyond the $3,000 amount.
Under the Long Term Care (LTC) Partnership, a person who buys and uses a policy to pay for LTC is able to protect their assets if they later need to apply for Medicaid (known as Medical Assistance in Minnesota). For example, Mary purchases a Minnesota Long Term Care Partnership policy with a maximum total benefit of $150,000. Mary needs long-term care services and uses her policy to pay for qualifying services. She spends $150,000 of her policy on care and then needs to apply for Medical Assistance. Mary is able to protect $150,000 of her assets from both consideration of her eligibility for Medical Assistance and from estate recovery should Medical Assistance pay for her care.
Many states that have Long Term Care Partnership programs have reciprocity agreements, which allow people who bought a Long Term Care Partnership policy in Minnesota to use it in another state. An updated list of states with reciprocity agreements is available at the partnership for long term care website.
Healthy people in their 40’s, 50’s and 60’s are the target population, but anyone concerned about how they will pay for their own long-term care should consider buying a Minnesota Long Term Care Partnership policy. However, it is not recommended for those who have poor health, have difficulty meeting monthly expenses and/or have very limited assets.
No. Unfortunately, many people believe that Medicare or their private health insurance will cover their long-term care, but these do not pay for the majority of long-term care services that most people need. This includes help with personal cares such as dressing, walking, using the bathroom independently, moving from bed to chair or chair to bed and managing incontinence.
Medicare coverage for long-term care is very limited and restrictive. For example, if a person needs to go to a skilled nursing home and wants Medicare to pay for their care, they have to be an inpatient in the hospital for three consecutive days before being admitted to the skilled nursing home. Days spent in the hospital under observation status do not count toward the three-day rule. They also have to receive daily skilled care and/or therapies, while in the skilled nursing facility. If the person meets the Medicare requirements, Medicare will pay only 20 days in full; then days 21-100 have a large co-payment amount. In most cases, once the person reaches 100 days of coverage, their Medicare benefits for skilled nursing home care are exhausted for that benefit period.
It must be a federally tax-qualified policy that includes consumer protections. It also must meet all of the requirements set by the Minnesota Department of Commerce pertaining to long-term care insurance policies and include a certain amount of inflation protection based on the age of the person at the time the policy is purchased.
Inflation protection increases the policy benefit dollar amount each year by a set rate. The goal is to keep pace with the increasing costs of long-term care services. There are two types of inflation protection – compound and simple. Compound inflation protection offers the highest level of inflation protection by adding a compounded percentage, for example five percent, so the daily maximum benefit can keep up with the rate of inflation by increasing every year. For example, if a Minnesota Long Term Care Partnership policy is purchased with $100 daily benefit, under five percent compound inflation the amount would increase to $105 the first year and then five percent of $105 the second year. With five percent simple inflation protection it would grow to $105 the first year, and $110 the second year. Here is another example:
Annual simple inflation protection: interest on the original daily benefit only
Annual compound inflation protection: interest on interest
Some policies offer a Future Purchase Option or a Guaranteed Purchase Option. This allows you to choose to increase your benefits periodically. Each time you buy additional coverage, your premium will increase. If you accept the option regularly and have not become eligible for benefits, you do not need to show proof of good health. However, if you decline the option a certain number of times, you may have to provide medical information to the insurance company to have access to the inflation riders again.
No. Not all insurance companies sell policies that are part of the Minnesota Long Term Care Partnership. Even if a company participates in the Partnership, the company may choose to include only some of their products in the Minnesota Long Term Care Partnership. The insurance company, insurance agent or financial planner should know if the policy being considered qualifies as Minnesota Long Term Care Partnership.
Many of today’s policies cover services provided in the home or assisted living. Coverage may include personal care services and homemaker services, adult day services, assisted living care, respite care, caregiver training, short and long-term nursing home stays and a wide range of home care services, such as skilled or non-skilled nursing care, physical therapy, and services of home health aides provided by state licensed and/or Medicare-certified home health agencies.
No. But there are some key considerations for purchasing a policy that should be discussed with a trusted financial advisor or insurance agent when making the decision about purchasing a policy.
All policies have some limitations and exclusions – otherwise, premiums would become unaffordable. Some exclude coverage for pre-existing conditions for six months. Other policies may not cover alcoholism, drug abuse or an intentionally self-inflicted injury. Many policies will not cover long-term care provided by family members.
Minnesota Long Term Care Partnership benefits generally have a maximum dollar amount or a maximum number of days. The policy 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 that is equal to a specific dollar amount.
Yes. The law allows companies to include a 90-day or 180-day pre-existing clause in the policy. This means the policy holder would not receive long-term care benefits during the first three or six months after they purchased their policy for any condition or illness that was diagnosed or treated during the 90 or 180 days before the effective date of the policy. The policyholder would pay for any services related to the pre-existing condition during this period.
Yes. The insurance company can cancel the policy, if the consumer has not paid the premiums. Also, if the policyholder provided inaccurate health information on the application, the company can cancel the policy.
If a person has been diagnosed with Alzheimer’s disease and wants to buy a policy after the diagnosis, a company may decide to not sell a Minnesota Long Term Care Partnership policy to that individual. Once a policy is in force, Minnesota law does not allow companies to limit benefits because the policyholder develops Alzheimer’s disease or if their health deteriorates.
Yes. Most premiums for long-term care are “level,” meaning they don’t increase as the policyholder ages or if their health status changes. Individuals cannot be singled out for an increase. The insurance company however, can raise rates for an entire rate class of people in the state with the same policy, after review and approval from the Minnesota Department of Commerce. A rate class may be based on the age, residence and health status at the time the policy was purchased by the policyholders.
Medical Assistance or MA, is also known as Medicaid outside of Minnesota. Medical Assistance for Long-Term Care is a publicly funded health care program intended for low-income people, that helps pay for health care services received while living in a long-term care facility, such as a nursing home. Medical Assistance for long-term care also helps pay for health care services that allow a person to stay in their home, instead of moving to a long-term care facility. Examples include home and community services through the Elderly Waiver, Alternative Care program or one of the home and community-based waivers for persons with disabilities. Eligibility for Medical Assistance for long-term care is determined by the county human services agency.
If you find yourself in a dispute with an insurer or agent and are unable to resolve it yourself, the Minnesota Department of Commerce may be able to help. Visit Insurance Complaints, or call 800-657-3602.
An asset protected under a Minnesota Long Term Care Partnership policy cannot be counted when the county decides if an individual qualifies for Medical Assistance for long-term care and the asset cannot be used to repay the State for Medical Assistance for long-term care when the person dies, up to the protected asset limit.
A Protected Asset Limit is the total dollar amount of assets someone can protect through a Minnesota Long Term Care Partnership policy when applying for Medical Assistance for long-term care. This amount is equal to the dollar amount the Long Term Care Partnership policy has paid for care since July 1, 2006. For example, Jean has a Minnesota Long Term Care Partnership policy for a total of $100,000. The policy has paid $100,000 in long-term care benefits between July 1, 2006 and the date when Jean applied for Medical Assistance for long-term care. Jean can protect $100,000 in assets if, she is found eligible for Medical Assistance for long-term care.
No. There is no requirement to purchase any long-term care insurance policy. If a person buys a Minnesota Long Term Care Partnership policy they may be able to keep more of their assets if they become eligible for Medical Assistance for long-term care.
The Minnesota Long Term Care Partnership and Medical Assistance for long-term care allow an individual to only protect assets with a value up to the Protected Asset Limit. A policyholder can decide to reduce countable assets to become eligible for Medical Assistance for long-term care, reapply for Medical Assistance for long-term care after the assets are reduced, or after the Minnesota Long Term Care Partnership policy has paid for more of the long-term care services.
To apply for Medical Assistance for long-term care, complete the Minnesota Health Care Programs Application for Payment of Long-Term Care Services (Form DHS-3531). The application can be found at https://edocs.dhs.state.mn.us/lfserver/Public/DHS-3531-ENG. For more information, contact the local county human services office.
A lien is a legal claim against property for the satisfaction of a debt. The lien is paid off at the time the property is sold. The state may file a lien if a person receives Medical Assistance and Medical Assistance for long-term care. The lien may be filed against the interest in real property owned individually or with someone else. Real property is land, all buildings, structures, improvements, or other fixtures on it belonging or pertaining to the land, including mobile or manufactured homes attached to a permanent foundation on land owned by the client, all mines, minerals, fossils, and trees on or under it and life estate and remainder interests. A Medical Assistance lien will not be filed if the person is in a nursing home and will be returning home, or if the spouse still lives in the home or the home or other real property is protected because of the Minnesota Long Term Care Partnership policy.
Estate recovery is the term for the general process by which the county or state seeks reimbursement after the person’s death or the death of their spouse, for Medical Assistance benefits received by a recipient or a recipient’s spouse. The maximum amount the State can recover is limited to the amount spent on the person or their spouses medical and long-term care services. Assets protected under a Minnesota Long Term Care Partnership policy are protected from estate recovery up to the protected asset limit.
Even if your insurer is approved to sell Partnership coverage, it doesn’t mean your existing coverage will automatically qualify for the Partnership program. To qualify for Partnership, most policies have to be sold after July 1, 2006, unless the insurance company decided to make your policy purchased prior to July 1, 2006, Partnership qualified.
You will need to call your agent or insurer to find out whether your coverage can be exchanged for Partnership coverage. Your insurer is the only one who can determine this. If it qualifies, you will want to find out if they are planning to send you a notice of this.
In 2015, the Minnesota legislature made it a requirement that if a written request is made by the policyholder to the insurance company to find out if a policy is Partnership qualified, the insurance company must respond within 30 days to the policyholder.
To learn more about the Minnesota Long Term Care Partnership and other options to pay for long-term care, visit Own Your Future. Or call the Senior LinkAge Line at 1-800-333-2433 to receive neutral, comprehensive information. You can live chat with a Senior LinkAge Line specialist by visiting www.MinnesotaHelp.info. The Senior LinkAge Line is staffed with specialists who have expertise in Long Term Care Options counseling, including the Minnesota Long Term Care Partnership. The Senior LinkAge Line does not sell, market or endorse any insurance product.