Federal Partnership Program
The State of Tennessee is a participant in the federal/state long-term care partnership program. The program, which was authorized by an Act of Congress and signed into law by President Bush in 2005, allows states to provide additional asset protection for those who purchase qualified long-term care insurance policies.
The Tennessee Long-Term Care Partnership Program is an agreement between the state government and private insurance companies to assist individuals in planning for their long-term care needs. Insurance companies voluntarily agree to participate in the Tennessee Partnership Program by offering long-term care insurance coverage that meets certain state and federal requirements.
Long-Term Care insurance policies that qualify as partnership policies may protect the policyholder’s assets through a feature known as “Asset Disregard” under TennCare, Tennessee’s Medicaid program. “Asset Disregard” means that an amount of the policyholder’s assets equal to the amount of long-term care insurance benefits received under a qualified Partnership 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 received without affecting the person’s eligibility for Medicaid.
If your Tennessee Partnership Long-Term Care Insurance policy paid $325,000 in benefits and you still require care the state will disregard that same amount in calculating your eligibility for the Medicaid Long-Term Care benefit. You would be able to keep that amount, in addition to the amount normally allowed and still qualify for Medicaid’s Long-Term Care benefit. The Partnership Program also protects those assets after death from Medicaid estate recovery.
Most states have reciprocity with other states' long-term-care partnership programs including Tennessee. This means if you move from or to Tennessee your partnership asset protection follows you as well.
Medicaid - TennCare
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, Tennessee 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 Tennessee
A variety of products are approved in Tennessee for Long-Term Care planning. This includes the traditional plans, including partnership certified policies, short-duration policies, and asset-based “hybrid” policies.
Tennessee does not offer any state tax incentive for qualified long-term care insurance; however, federal tax incentives are still available.
*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.