Each individual state will have the opportunity to help protect Medicaid budgets by implementing Long-Term Care Insurance Policy plans. Requiring that benefits of qualifying insurance policies be paid before Medicaid benefits can be assessed will help to greatly reduce the burden on the Medicaid program. These policies will also allow individuals to protect a portion of their own assets that would have needed to be spent down before qualifying for Medicaid in the past.
In order for a state to implement the Long-Term Care partnership, they will have to adhere to uniform requirements that are nationwide. Any tax-qualified policy approved by the state insurance department, meeting federal Partnership Program requirements, will qualify for asset protection, dollar for dollar, up to policy maximum.
Assets that must be spent down to qualify for Medicaid:
- Cash
- Checking/Savings accounts
- CDs
- Savings bonds
- Investment accounts/mutual funds/stocks
- IRA’s/retirement accounts
- Vacation homes and investment properties
- Second car
- Real estate and personal property not currently in use.
Assets a person can keep for purposes of qualifying for Medicaid:
- Principal residence with equity under $536,000 except for single individuals in Ohio
- Household goods
- Personal effects
- One car per household
- Life insurance with no more than $1500 total face value
- Irrevocable prepaid burial plan
- Property necessary to individual’s self support such as a small business valued at $6000 or less
- Income producing property with some restrictions
