Monday, August 30, 2010

An insurance company mails me info about Medicaid and LTC and getting out of spend down (hint: partnership policies)

Today I got a mailer from “Bankers Insurance and Casualty Company” saying “as a Virginia resident, you are NOW ELIGIBLE for government assistance for protecting your assets under a new state sponsored program. Virginia residents can now receive Medicaid payments for long-term care services without having to first spend down their own savings to qualify.”

The letter asks you to mail back for a “Guide for Program Benefit Information” but a little web checking shows that this is about “partnership policies” for long term care insurance. Bankers's own link is here. The two basic requirements for these policies are inflation protection and federal IRS qualification.

Ohio has a similar program, and the state offers a very detailed explanation here (PDF).

Remember, typically long term care plans can be tapped only when at least two life activities are compromised.

With partnership plans, a patient could use Medicaid for co-pay (or if the LTC plan was insufficient) without the spend-down. The whole spend-down thing is disheartening, but there are strict lookback rules against giving away the assets to heirs first to spend down.

States are likely to get stricter with Medicaid and long-term care as their budgets are crimped due to recession and credit crisis. And in many states (including Ohio and Virginia), state laws give state Medicaid the legal right to go after adult children for reimbursement, under “poor laws” or “filial responsibility laws”. These haven’t been enforced much yet but probably will, but one wonders how they would stand up to constitutional tests, especially (like social security itself) they were enacted when life spans were shorter.

Even when there are funds available (from LTC or even private wealth) placement in a good facility is often difficult for many families.

No comments: