Federal Partnership Program
The State of Indiana was one of the four original partnership states. The Indiana Long-Term Care Insurance Partnership Program (ILTCIP) is a special program. It combines private long-term care insurance with special access to Medicaid. The private long-term care insurance companies must offer a specific level of benefits to allow policyholders to qualify for additional asset protection
Indiana’s program is unique as it provides options for both ‘total dollar’ asset protection and ‘dollar-for-dollar’ asset protection.
Effective April 1, 2009, Indiana was approved by the federal government to join the National Reciprocity Compact for granting Medicaid asset protection to policyholders from other states that have Partnership long-term care programs. Indiana Partnership policyholders who relocate to another state may be eligible to receive dollar for dollar asset protection if applying to that state’s Medicaid program.
The insurance policy benefits are payable in any state where you reside. But now with Indiana participating in the Reciprocity Compact, the asset protection benefit in your Indiana Partnership policy will be honored by other states.
With "total dollar" asset protection the policy would provide for 100% asset protection. With this policy, if you exhaust benefits in the policy you are able to protect every asset you have. With a "dollar-for-dollar" policy, you shelter your estate based on the amount of total benefits paid by the policy. For example, if your policy paid $450,000 in benefits you would be able to shelter $450,000 and still qualify for the Medicaid benefit.
Most states have reciprocity with other states' long-term-care partnership programs including Indiana. This means if you move from or to Indiana your partnership asset protection follows you as well.
Long-Term Care Medicaid spend down is $2,000. A spouse’s minimum asset allowance is minimum of $25,728 up to a maximum of one-half of countable assets up to $128,640 . Your spouse’s minimum monthly income allowance is $2,113.75.* The home equity limit is $595,000.
For more information about the Medicaid program visit www.medicaid.gov.
Products Approved in Indiana
A variety of products are approved in Indiana for Long-Term Care planning. These include traditional plans, including partnership certified policies, short-duration policies, and asset-based “hybrid” plans.
The State of Indiana also offers state tax incentives. This tax deduction applies only to Indiana Partnership Policies. An individual taxpayer is permitted to deduct an amount equal to the eligible portion of premiums paid during the taxable year by the taxpayer for a qualified LTC insurance policy (as defined in the Indiana Code) for the taxpayer, the taxpayer’s spouse, or both. The deduction only applies to the Partnership program. Ind. Code § 6-3-1-3.5 and § 12-15-39.6.5 (Qualified Long-Term Care Policy).
*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.