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Indiana Long Term Care Partnership Program

ILTCP > FAQs Frequently Asked Questions

Q.  Why would I want to purchase a long term care policy?
A.  We cannot predict the future – our future medical needs, financial resources, and family support environment.  As a population, we are living longer and healthier, but we are aging and disabling accidents can occur at any age.  Our ability to perform normal activities of daily living could be hindered due to a medical or mental condition.  For the same reasons we purchase auto and home insurance – to help offset the financial risk of a loss – we would purchase a long term care insurance policy.  A LTC policy gives you the control over long term care needs and helps protect financial resources.  Two types of long term care policies are available in Indiana – traditional policies and Partnership policies.

Q.  Doesn’t Medicare pay for long term care services?
A.  Yes, but very limited and on a restricted basis. The maximum number of days Medicare Part A will cover is 100 – the first 20 days are covered at 100% and the next 80 days require a substantial copayment.  Also, Medicare provides limited coverage for skilled care (services provided to improve the patient’s health) if in a Medicare approved facility and a 3 day prior hospitalization requirement has been met.

Q.  What is the Indiana Long Term Care Insurance Program (also known as the “Partnership Program”)?
A.  The Partnership Program is a working collaboration between insurance companies and State/Federal governments to promote awareness of long term care.  The Program’s purpose is to help Hoosiers understand and make good decisions regarding their long term care needs.

Q.  Since the program is called Indiana Long Term Care Insurance Program, doesn’t the State of Indiana sell policies under the Partnership Program?
A.  No, the State does not sell insurance policies.  Insurance companies sell the policies.  The Partnership Program, as an agency within the Department of Insurance, works with the insurance companies and agents to promote long term care and has oversight over the program. The Department of Insurance reviews and approves policies to make sure they comply with required regulations.

Q.  What is the difference between a traditional long term care policy and a Partnership policy?
A.  Both policies provide benefits for long term care services up to the policy limits.  Partnership policies require several consumer benefits to be included which may be options with a traditional policy.  A Partnership policy provides additional financial protection if you have to apply to Medicaid.  You would not have to “spend down” your assets to be eligible for Medicaid.  Protected assets under a Partnership policy are also exempt from Medicaid estate recovery.

Q.  What is asset protection?
A.  Asset protection is a financial consumer benefit included in Partnership policies provided by the State at no charge.  For example – An individual has a long term care insurance policy (either a traditional or Partnership policy) and is receiving benefits.  The policy pays out all benefits and the policy is exhausted.  However, this individual still needs care and now must pay for services with their own money or their family’s money. 

If the individual cannot afford care, he may have to apply for government assistance called Medicaid.  To qualify for Medicaid, an individual’s income must be at or below certain income guidelines or he must “spend down” his income and assets to that level.  With a Partnership policy, an individual can protect or will not have to “spend down” his assets.  Assets that are protected include such items as cash, savings and checking accounts, IRA’s, certificates of deposit, and real property.  Income, such as social security and interest income, is not protected.

The asset protection feature is a benefit only in Partnership policies and is not included in traditional long term care policies. 

Q.  Does a Partnership policy cost more than a traditional long term care policy?
A.  No.  The cost of a long term care policy is based on 4 factors: 1) your age at time of purchase; 2) benefits selected; 3) your health status; and 4) the insurance company you select.  If all of these factors are identical, there is no difference in price to purchase a Partnership policy.  Asset protection is a benefit provided by the State of Indiana at no charge and is not an insurance company benefit.

Q.  How do I purchase a Partnership long term care policy?
A.  Policies are available through insurance companies.  Some companies offer both traditional and Partnership policies. The State of Indiana does not sell Partnership policies.  A list of companies participating in the Partnership Program is listed on the Home Page on the website.

Q.  How do I know if I have a Partnership policy?
A.  Partnership policies were first sold in Indiana in May 1993.  The first page of the policy, the Outline of Coverage, and the application will contain language in bold print and boxed stating if the policy is a Partnership policy (has asset protection).  Look for this language:

THIS POLICY {CERTIFICATE} QUALIFIES UNDER THE INDIANA LONG TERM CARE INSURANCE PROGRAM FOR MEDICAID ASSET PROTECTION.  THIS POLICY {CERTIFICATE} MAY PROVIDE BENEFITS IN EXCESS OF THE ASSET PROTECTION PROVIDED IN THE INDIANA LONG TERM CARE PROGRAM.

 

 

 

 

If the policy is not a Partnership policy, it will also have the boxed language stating “this policy does not qualify ……”

Q.  If my policy is not a Partnership policy, can I add asset protection?
A.  No.  A policy is either a traditional policy or Partnership.  In addition to asset protection, Partnership policies are required to include other consumer benefits that may be offered as options with a traditional policy.  Asset protection is not available under a traditional policy.

Q.  I bought a long term policy after 1993, but my agent did not discuss a Partnership policy with me.  Is this illegal?
A.  No.  Agents are required to have 8 hours of long term care training plus an additional 7 hours of Partnership specific training to sell Partnership policies.  Your agent may not have taken this training or may represent a company that does not offer Partnership long term care policies.

Q.  How much asset protection will my Indiana Partnership policy provide?
A.  There are two types of asset protection – dollar for dollar and total asset protection.  The type of asset protection your policy provides depends on the amount of coverage you initially purchased and the inflation factor. 

A Total Asset policy protects all of your assets if applying for Medicaid eligibility.  All of your assets are protected from Medicaid spend down.  To receive Total Asset protection, the policy must: 1) have 5% compound inflation; 2) have a total benefit amount equal to or more than the State set minimum for the year purchased; 3) exhaust all benefits; and 4) not have reduced the total benefit lower than the State set minimum for the year of reduction. All of your assets regardless of their value are protected if applying to Medicaid.

A Dollar for Dollar Partnership policy will provide asset protection equal to the amount paid out in benefits up to the policy maximum.

Q.  How do I find out how much coverage is required for total asset protection?
A.  A chart is provided under “Consumer Information” and the Home Page.  The minimum amount is increased by 5% each year.

Q.  Is my income protected under an Indiana Partnership policy?
A.  No.  If you need to apply to Medicaid because you do not have the financial resources to pay for long term care, assets are protected under a Partnership policy, but not income.

Q.  Is my long term care policy good if I move to another state?
A.  Yes.  A long term care policy, whether it is a traditional or a Partnership policy, is portable and will pay for services in other states regardless of where you purchased it.  If you purchased an Indiana Partnership long term care policy and are applying to Medicaid in another state, you may also have asset protection (Reciprocity) with that state.  Asset protection under a Reciprocity Agreement with another state is on a dollar for dollar basis.

Q.  Can I take a tax deduction for my long term care policy?
A.  Yes.  You may be able take a portion of the premium paid as a deduction for a tax qualified long term care policy on your Federal form.  In addition, if you have a Partnership LTC policy, you can take the premium paid as a deduction on your state form using Form IT-40, Schedule 1&2, under other deductions, Code 608.

Q.  Since I have a Partnership LTC policy, am I automatically eligible for Medicaid?
A.  No.  The decision to purchase of a long term care policy is because of concern over future health care services needed due to a mental or medical condition and the financial cost of that care.  A long term care policy gives you the control over those decisions and will help offset the costs involved.  In the event, you would have to rely on the government’s Medicaid program to cover the costs of your long term care and to make your healthcare decisions, a Partnership policy with asset protection would provide financial protection for your assets.

(Oct 2009)