And whether, or how, it fits into your estate plan.
It’s uncanny that we may own a life insurance policy that will provide for our loved ones after we’re gone – but we don’t have a policy to protect US…while we’re still here…when we need to pay for long-term care.
This blog will explain how long term care insurance policies work.
Who pays for care?
While Medicare will pay for your medical bills and short term rehabilitation stays, Medicare does not pay for your care at an assisted living facility, skilled nursing facility or care at home.
As the cost of long-term care in Connecticut is so expensive and continues to increase, a long-term care insurance policy could help to pay for these costs.
But which plan do you choose and how do you know what plan is best for your needs? There are many factors to consider when choosing a long-term care insurance plan such as:
- How much should the daily benefit be?
- Can I afford the premiums?
- Should I have an inflationary rider on my plan?
- How much do I need in lifetime benefits?
Click here to read our blog that has 10 tips you should know about long-term care insurance.
Connecticut has a plan
One plan to consider is the Connecticut Partnership for Long Term Care or the “Connecticut Partnership Plan.” This is a long- term care insurance program that is set up by the state in conjunction with private insurers.
Most significantly, it is a long term care insurance policy that offers the added benefit of asset protection.
The Connecticut Partnership Plan offers a comprehensive plan that ensures that
- there is a minimum daily benefit that will automatically increase each year to account for inflation;
- covers a wide variety of community based and home based services; and
- most importantly, offers the insured an asset protection component that cannot be found in any other long-term care insurance policy.
The asset protection component can best be understood by the following example:
Let’s say you are insured under the Connecticut Partnership Plan and your lifetime benefit is $250,000.
- You enter a skilled nursing home and over a two year span you exhaust your entire lifetime benefit.
- You now apply for Medicaid nursing home benefits. Beyond the protected amount you and your spouse are entitled to keep under the Medicaid program, you and your spouse will get to keep another $250,000 in assets because you exhausted your lifetime benefit under the Connecticut Partnership Plan.
Essentially, it is a “thank you” from the state for purchasing the long-term care insurance and using up all your benefits under your plan before applying for Medicaid benefits and state aid. This is a highly important and valuable benefit!
The other benefit of the Connecticut Partnership Plan is that if you move out of Connecticut, the benefits will pay out in your new state. Should you then need to apply for Medicaid benefits, you would be able to receive the asset protection benefit so long as:
(1) you meet the Medicaid eligibility requirements in the new state; and
(2) Connecticut has a reciprocal agreement with that state at the time that you are applying for Medicaid benefits.
Is a long-term care insurance policy right for you? Will you be able to pay for costs down the road if you become ill?
Give us a call if you are evaluating the Connecticut Partnership Plan or another long term care insurance plan. We’ll work with you to make sure you choose the one that makes the best sense for your circumstances.
10 Tips You Should Know About Long-Term Care Insurance
3 Excuses for Skipping Life Insurance (And Why They Don’t Hold Up)
Annuities as Asset Protection: Smart Move if You Do It Right
A Single Person’s Guide to Long-term Care Planning and Medicaid