PRESERVING ASSETS AND LONG TERM CARE
One of the most frequently asked questions is how can an individual preserve one's assets if you face a future in a nursing home. Or what if you are faced with the expense of nursing home care? How will you pay for it without leaving your heirs as penniless? Recently we read about a New York State subsidized program that could provide you with some helpful answers. Saul Friedman in his Newsday column "Gray Matters" in the Newsday edition of January 2, 1999 wrote about the New York State Partnership for Long Term Care. If possible get a copy of this excellent article.
Governor George E. Pataki in an introduction on the site's web page wrote: "The Partnership program provides life-time coverage for long-term care expenses by combining private insurance coverage with Medicaid benefits while guaranteeing the protection of assets under the Medicaid component." The Governor also stated that "favorable tax treatment" has been accorded to any New Yorkers who purchase long-term care under the Partnership program starting with the 1996 tax year. Check with your tax advisor for details.
Many of our readers have asked us for a brief explanation of the tax advantages in connection with Qualified Long Term Care Insurance. We caution you to check with your own tax advisor on this matter, but briefly here are the tax advantages:
The 1998 limits for these premiums are: 40 years old or less- $210; ages 41-50- $380; ages 51-60- $770; ages 61-70-$2,050; ages 71 and older-$2,570.
The New York State legislation that became effective January 1, 1996 allows a tax deduction for premiums paid for Qualified Long-Term Care policies. It uses the same numbers as above indexed to inflation
Under the program if you buy a long-term care insurance policy from one of the approved insurance companies that sell it (there are about 12 approved companies) you would be covered as follows: 3 years of nursing home care, or 6 years of home care, or some combination of the two. At the end of this period you could then apply for New York State Medicaid benefits and STILL RETAIN ALL YOUR ASSETS. You will have to contribute your income to the cost of your long-term care. The program's web site is: www.nyspltc.org . The site contains the following question: "Can I (a Partnership participant) transfer resources which generate income and still be eligible for Medicaid?" The site goes on to answer the question in the following manner: As a Partnership participant, you can transfer resources at any time you wish. The 3-year look back period does not apply. There are no penalty periods on resources or property transferred by a Partnership participant. If real or personal property is transferred, it belongs to the party to whom the property was transferred. This provision of the program is authorized by New York State Medicaid Plan Amendment 92-22. Check with your attorney for details.
The basic policy contains the following minimum benefits:
Coverage for at least 3 years of nursing home care, 6 years of home care or a combination of the two (where 2 home care days equal 1 nursing home day).
$134 per day coverage for nursing home care; $67 per day coverage for home care. Inflation protection equal to 5% compounded annually.14 days of respite care, renewable annually, to give the at-home caregiver some needed rest.
We reiterate that this is only the basic policy. With the cost of the average nursing home running in excess of $134 per day, additional coverage can be purchased at additional cost.
The Partnership suggests the following as criteria for who should consider the program:
People who are generally healthy.If married total income in the $40,000-$50,000 range, and assets, not including home, of at least $100,000. If single total income of at least $30,000, and assets, not including home, of at least $50,000.
The premiums for the minimum 3-year basic policy are: $1,000 for age 55 per year premium; $1,300 at ages 60-64; $1,700 ages 65-69; $2,600 ages 70-74; $3,900 ages 75-79; $4,500 at age 80
If you have purchased one of the Partnership policies you must live in New York State to be eligible for the Medicaid portion. Why you may ask yourself does the State have such a program? You must keep in mind that it is private insurance companies that cover the first 3 years. The average residency in a nursing home is about 2 1/2 years, so the Medicaid coverage may never come into usage.
About 20% of all long term care policies active in the state are part of the program. Remember if you purchase the Partnership policy, you may apply for Medicaid, and the government cannot touch any of your assets, although the income from the asset may be applied towards the cost of your care.
To find out more about the Partnership call: 1-888-NYS-PLTC in New York State or (518) 473-7582) from anywhere. You may write:
New York State Partnership for Long-Term
NYS Department of Health
161 Delaware Avenue
Delmar, N.Y. 12054
The following are the income levels for people living in the community to be eligible for Medicaid:
1999 Income Levels
Number in Family------- - - - - - - - - - - - - - - - - - - - - Monthly Income
When you purchase a Partnership Policy, you are required to sign the Consumer Participation Agreement (CPA) in order to be enrolled in the program. The CPA is a legal contract between you and the State of New York. The original CPA is filed with the Partnership office in Albany. Keep your copy in a safe place.
To e-mail: RehabStrat@aol.com or firstname.lastname@example.org
Currently there are 12 insurance companies licensed to sell the Partnership Policy in New York. They are as follows:
|Blue Cross/Blue Shield of Central NY
|CNA Insurance Companies
|Conseco Life Insurance
|Finger Lakes Long Term Care Insurance Co.
|First Fortis Insurance Company
|GE Capital Life Assurance Co. of New York
|John Hancock Mutual Life Insurance Co.
|Mutual of Omaha
|New York Life Insurance Company
|Teachers Insurance and Annuity Association
|Travelers Insurance Company
|CNA Insurance Companies (Mt. Sinai Employees Only)
|CNA Insurance Companies (NYC Employees Only)
|Metropolitan Life Insurance Company (NYSUT Members Only)
|Prudential Insurance Company (AICPA Members Only)
FOR AN INFORMATIVE AND PERSONAL ARTICLE ON PRACTICAL SUGGESTIONS WHEN SELECTING A NURSING HOME SEE OUR ARTICLE "HOW TO SELECT A NURSING HOME".
By Allan Rubin
To e-mail: RehabStrat@aol.com or email@example.com
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