December 2005 "Indiana Partnership Long Term Care Insurance Policies"
PLANNING FOR WEALTH & SECURITY
By attorneys Jennifer & Jeff Hawkins
Indiana Partnership Long Term Care Insurance Policies
This is the second of two excerpts of an article written by Mary Ann Hack, Insight LTCi Services, LLC, who was formerly employed as the Program Director of the Indiana Long Term Care Insurance Program.
The Indiana Partnership Program is a Win Win Win for all involved!
Hoosier consumers Win
Purchasers of Indiana Partnership policies receive high quality long term care insurance. This gives them purchasing power by providing them with choices about the types and providers of their LTC when they need it. Indiana Partnership policies include additional consumer protections not found in traditional LTC insurance policies. Policies include the state added benefit of asset protection to be used if LTC is needed beyond the limits of the insurance coverage Medicaid acts as a backup safety net to the private insurance. The asset protection feature is “free” and the insurance companies cannot charge for it, since it is a state added benefit. It is the state’s way of saying thanks for using private insurance before turning to Medicaid. Purchasers can have the security of knowing more State oversight is conducted with the participating insurance companies. Purchasers may deduct the premiums from their Indiana taxes.
The State of Indiana Wins
For every year that Medicaid eligibility is delayed or prevented (through the use of private LTC insurance) Indiana Medicaid and the federal government save approximately $35,000 in nursing home, prescription drug, and other medical services costs. Saving costs to Indiana Medicaid also saves dollars for Hoosier taxpayers.
The Insurance Industry Wins
The insurance companies develop the products. Their agents market the products. The agents & companies earn commission from product sales. For more information, visit the Indiana Long Term Care Insurance Program’s website at www.longtermcareinsurance.in.gov.
Facts & Figures IN Partnership data through 6/30/2005:
Approximately 35,600 Indiana Partnership policies have been purchased. About 76% of policies qualify for total asset protection (avg benefit of 4.3 yrs of facility care). First time LTC insurance purchasers account for 94% of sales. Coverage for facility, home and community care accounts for 88% of LTC insurance purchases Average buyer age is 61 (10 years ago it was 72). The age range is 19-90. At least 263 people have used their insurance coverage (.8%). Reasons for not accessing Medicaid include: moved out of state, excess assets, want to remain private pay, and health improved. More than $10.7 million worth of asset protection has accrued to accrued policyholders to date.
Federal Incentives for Private LTC Insurance
In 2005, there are 8 bills in Congress to expand tax breaks. These federal incentives include a Federal employee LTC insurance offering. (see www.ltcawareinfo)
Expansion of Partnership Programs
There are three other Partnership programs B in Connecticut, California, and New York. The number of programs has been limited to four due to legislation passed by Congress in 1993 that inhibited other states from developing similar programs. Sixteen states already have enabling legislation allowing them to develop Partnership for LTC Programs once new federal legislative corrections of the 1993 limitations are enacted. States wanting to develop Partnership Programs will turn to the experienced states for guidance and assistance. In addition, as more states develop Partnership programs, it is projected more states will enter into reciprocal agreements for honoring asset protection earned under Partnership policies.
THIS ARTICLE IS NOT LEGAL ADVICE. ALWAYS CONSULT AN ATTORNEY DIRECTLY BEFORE RELYING UPON THIS ARTICLE OR CHANGING AN ESTATE PLAN.
© 2005 by HAWKINS LAW PC, Estate, Trust & Business Attorneys. All rights reserved.