Federal Partnership Program
Michigan now participates in the federal/state partnership for long-term care program. The Michigan Long-Term Care Partnership Program is a partnership between the state government and private insurance companies to assist individuals in planning for their long-term care needs. Insurance companies must follow state and federal guidelines, and agents must be licensed and trained to sell partnership policies. The idea is to provide a consumer with financial protection for the costs of long-term care with a safeguard for additional asset protection known as “dollar-for-dollar” protection or “asset disregard.”
Long-Term Care Insurance policies that qualify for the Michigan Long-Term Care Partnership Program may protect the policyholder’s or certificate holder’s assets through a feature known as “Asset Disregard” under Michigan’s Medicaid program. Asset Disregard means that the amount of a policyholder’s or certificate holder’s assets equal to the amount of long-term care benefits received under a qualified Michigan Partnership Program insurance policy will be disregarded for the purpose of determining the insured’s eligibility for Medicaid. This generally allows a person to keep assets equal to the insurance benefits paid on his/her behalf under a qualified partnership policy.
For example, if your Michigan Partnership Long-Term Care Insurance policy paid $450,000 in benefits when they are exhausted you are able to shelter that same amount when they compute your eligibility for the Medicaid Long-Term Care benefit. This would allow you to keep a large amount of savings above the minimum asset allowance. The Partnership Program also protects those assets after death from Medicaid estate recovery.
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.
Rate Stability Rules
In addition, Michigan consumers enjoy additional peace-of-mind as the state has adopted Long-Term Care Insurance Rate Stability Rules. These rules, developed the National Association of Insurance Commissioners, makes it much harder for an insurance company to get an approved rate increase.
Products Approved in Michigan
There is a variety of approved products which are available in Michigan for Long-Term Care planning. These include traditional plans, including partnership certified policies, short-duration policies, and asset-based “hybrid” plans.
There are no current state tax incentives for long-term care insurance, federal tax incentives still apply.
*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.