As we and our family members age, the prospect of needing and paying for long-term care services looms large in our futures. Of the options available, many of us should contemplate whether a Long-Term Care Insurance Partnership Policy would be beneficial and, perhaps, provide peace of mind.

Long-Term Care Insurance (LTCI) policies provide coverage for skilled care services needed later in life. Premium schedules depend on the applicant’s physical and medical history and benefits can be designed to pay for a certain number of days of care, a certain dollar amount per day, or a total dollar amount. Generally, policies start paying for care when specific criteria are met—such as the insured requiring assistance with two or more “activities of daily living” (ADLs) like dressing, eating, personal hygiene, using the bathroom, walking, and transferring oneself (i.e.: from sitting to standing or other positions).

To maximize the appeal and benefit of LTCI, Nevada took advantage of an option provided by the Deficit Reduction Act and created the State’s Long-Term Care Partnership Program. This is a public-private partnership aimed at promoting LTCI while reducing Medicaid expenditures for long-term care services. The Partnership Program creates incentives for Nevadans to fund their care needs privately through purchasing qualified Long-Term Care policies and to rely on the policy’s insurance benefits before accessing Nevada’s Medicaid program. Using Partnership Policies can be a smart way to plan for future long-term care costs.

Partnership Policies in Nevada allow an asset disregard if and when the policyholder applies for Medicaid services. The State may disregard the policyholder’s assets equal to the amount paid out under the qualifying insurance policy when determining Medicaid eligibility. This comes into play when the individual requires continued skilled care, but has exhausted benefits under the Partnership Policy. For instance, if a qualifying plan paid out $200,000 in benefits to cover a person’s long-term care needs, Medicaid would not count up to $200,000 of assets when determining whether that person was eligible for Medicaid assistance in paying for long-term care costs.

As a result, the Partnership Plan policyholder could qualify for long-term care assistance through Medicaid without being forced to completely spend down assets to satisfy Medicaid’s income and asset limits. Given the 2016 asset and resource limits of $119,220 for a married couple, and the very low $2,000 asset limit for an individual, the interplay of a Partnership Policy may allow Nevadans to retain significant assets and resources. It is important to remember, however, that buying a Partnership Policy does not guarantee Medicaid coverage, as other eligibility rules still apply.

To be a qualified Long-Term Care Insurance Partnership Policy, the policy itself must include very specific features and the person owning the policy must be a Nevada resident at the time coverage becomes effective. At Kling Law Offices, we would be happy to consult with you about long-term care planning and whether LTCI is a product that would help give you the peace of mind you deserve.