What is a Florida Long Term Care Partnership policy and why should I care?
The Long Term Care Partnership Program (LTCPP) was approved by Florida lawmakers in 2006 in an effort to make long term care policies a more attractive long term care planning option for all Floridians. The LTCPP is a public/private partnership designed to give a substantial incentive for Floridians to purchase long term care insurance. The incentive is the program assures Medicaid applicants who have participated in the LTCPP to protect their assets equal to the amount paid by the long term care policy for the cost of their long term care.
For example, if an individual purchases a $50,000 long term care insurance policy and the policyholder moves into a long term care facility exhausting the $50,000 over time to cover the Medicaid applicant’s care, they will be able to protect dollar for dollar countable assets above the ICP asset limits. For a Medicaid applicant’s spouse, the asset cap is currently set at $109,560 and $2,000 for the applicant. Therefore, the applicant with $50,000 in coverage will be able to protect $52,000 or their spouse will be able to protect $159,560.
Not all long term care policies qualify
In order to qualify for the Florida Long Term Care Partnership program, you must be a Florida resident at the time of purchase, inflation protection must be purchased and maintained until at least age 76 and the policy effective date must be on or after January 1, 2007.
Procedure
It is important you make sure your policy states Long Term Care Partnership on it. The insurance company must also provide you with two forms. Upon execution of the policy, the insurance company should issue a ‘Partnership Status Disclosure Notice’ and an ‘Approved Long Term Care Partnership Program Policy Summary’ when all benefits have been exhausted for the coverage of long term care.
What if you already have a Long Term Care Policy?
Contact your insurance provider to inquire if you can convert your current policy to a Long Term Care Partnership policy. Companies are required to exchange your long term care policy to a Partnership policy if purchased after March 1, 2003.
Friday, March 6, 2009
Wednesday, February 25, 2009
Planning Strategies
Medicaid Planning Strategies
The term “Medicaid Planning” refers to the various strategies available to individuals confronted with the escalating costs of long term care. Medicaid Planning can be broken down into two separate planning categories, pre-planning and crisis planning. As you may have guessed, pre-planning is done well in advance of an individual going into a long term care facility and has substantial benefits for those who so choose to take this route. Crisis planning are for those individuals who have not done any pre-planning and are either on the verge of entering a long term care facility or already in one. Without a doubt, the majority of Floridians entering a long term care facility find themselves in the crisis planning mode.
The purpose of this blog is to address a number of popular planning strategies often employed when doing a crisis plan for a Medicaid applicant. One of the more popular planning methods is what’s referred to as the Half-a-Loaf Plan. This strategy is strictly used for the crisis planning client and is used as a means of last resort.
The basic premise for the half-a-loaf plan is the Medicaid applicant will transfer roughly half their available assets to whomever they choose. Upon applying for Medicaid, they will be assessed a penalty period based on the amount of their transfer. They are then responsible for paying for their care during this penalty period of which they can pay for with the assets they did not transfer. Remember, we only transferred half the applicant’s assets. It is also important to note that the amount you need to transfer when employing this option is based on a sliding scale that calculates such factors as the monthly devisor ($5,000 in Florida), monthly income, cost of care and other necessary costs such as medical insurance. The reality is there are a number of moving parts and nothing is ever as simple as it seems. It’s important for anyone considering this plan or any other that they contact a Florida Elder Law attorney to consider their options.
Another popular option is often referred to the spend down method. Essentially, this enables an applicant to take advantage of the multitude of exempt assets available to any Medicaid applicant. For example, home improvements are considered an exempt expenditure. Therefore, if the roof to the applicant’s home needs repairing, they may pay to have it repaired without risk of jeopardizing their Medicaid eligibility. There are a number of exempt assets a Medicaid applicant may own and should take advantage of whenever they are applying for Medicaid. These include but are not limited to irrevocable burial plans, burial C.D., homestead residence and one vehicle.
There are many more planning strategies which I will continue to focus on in my upcoming blogs. Obviously, I can’t address all the planning strategies available in this one blog. Anyway, I hope this information is helpful and brings to light that there are options available if you find yourself in the unenviable situation of having to shell out thousands of dollars each month for long term care.
As emphasized earlier, whenever you are applying for Medicaid to cover long term care costs, it is important to contact a Florida Medicaid attorney to at least discuss your situation and whether you need their advice and guidance.
The information contained in this blog is simply that and should not be considered as advice. The application process for Medicaid benefits can be very complicated and failure to comply with all the laws and regulations specified will almost certainly result in a denial of benefits.
If you would like to contact me, please visit my website at www.upchurchlaw.com or call me at 386-255-1925.
The term “Medicaid Planning” refers to the various strategies available to individuals confronted with the escalating costs of long term care. Medicaid Planning can be broken down into two separate planning categories, pre-planning and crisis planning. As you may have guessed, pre-planning is done well in advance of an individual going into a long term care facility and has substantial benefits for those who so choose to take this route. Crisis planning are for those individuals who have not done any pre-planning and are either on the verge of entering a long term care facility or already in one. Without a doubt, the majority of Floridians entering a long term care facility find themselves in the crisis planning mode.
The purpose of this blog is to address a number of popular planning strategies often employed when doing a crisis plan for a Medicaid applicant. One of the more popular planning methods is what’s referred to as the Half-a-Loaf Plan. This strategy is strictly used for the crisis planning client and is used as a means of last resort.
The basic premise for the half-a-loaf plan is the Medicaid applicant will transfer roughly half their available assets to whomever they choose. Upon applying for Medicaid, they will be assessed a penalty period based on the amount of their transfer. They are then responsible for paying for their care during this penalty period of which they can pay for with the assets they did not transfer. Remember, we only transferred half the applicant’s assets. It is also important to note that the amount you need to transfer when employing this option is based on a sliding scale that calculates such factors as the monthly devisor ($5,000 in Florida), monthly income, cost of care and other necessary costs such as medical insurance. The reality is there are a number of moving parts and nothing is ever as simple as it seems. It’s important for anyone considering this plan or any other that they contact a Florida Elder Law attorney to consider their options.
Another popular option is often referred to the spend down method. Essentially, this enables an applicant to take advantage of the multitude of exempt assets available to any Medicaid applicant. For example, home improvements are considered an exempt expenditure. Therefore, if the roof to the applicant’s home needs repairing, they may pay to have it repaired without risk of jeopardizing their Medicaid eligibility. There are a number of exempt assets a Medicaid applicant may own and should take advantage of whenever they are applying for Medicaid. These include but are not limited to irrevocable burial plans, burial C.D., homestead residence and one vehicle.
There are many more planning strategies which I will continue to focus on in my upcoming blogs. Obviously, I can’t address all the planning strategies available in this one blog. Anyway, I hope this information is helpful and brings to light that there are options available if you find yourself in the unenviable situation of having to shell out thousands of dollars each month for long term care.
As emphasized earlier, whenever you are applying for Medicaid to cover long term care costs, it is important to contact a Florida Medicaid attorney to at least discuss your situation and whether you need their advice and guidance.
The information contained in this blog is simply that and should not be considered as advice. The application process for Medicaid benefits can be very complicated and failure to comply with all the laws and regulations specified will almost certainly result in a denial of benefits.
If you would like to contact me, please visit my website at www.upchurchlaw.com or call me at 386-255-1925.
Saturday, February 21, 2009
Welcome
This is the first blog in what I hope will be many. The purpose of this blog is to provide information on the latest trends in Medicaid planning and inform individuals contemplating the various options available to them when it comes to long term care. Without a doubt, the recent enactment of the Deficit Reduction Act has impacted elder Americans unlike any legislation in recent time. In one stroke of the pen, how the calculation of penalty periods are calculated have been forever changed and various planning options previously available have for the most part been eliminated. Florida's Elder Law attorneys have had to alter the way they approach Medicaid planning and have had to craft entirely new planning approaches to better serve their clientele. It is my mission to bring these planning options to the forefront and provide some insight into the benefits and drawbacks of each plan. The information provided in this blog is simply that. It is not advice and should not be construed as such. It is important to contact a Florida Elder Law attorney if you or a loved one has entered or is considering entering a long term care facility. I say this because the cost of not knowing what options are available to you can be substantial. I hope you find this blog informational and look forward to any and all feedback going forward. For more information on long term care, please visit my website at http://www.upchurchlaw.com/.
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