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New insurance policies offer Medicaid applicants asset protection

07-29-2007 - The Florida Long Term Care Insurance Partnership, created July 29, 2007, may help you preserve assets if you apply for Medicaid benefits for long-term nursing home care.  To participate in the program, you must purchase private long-term care insurance that meets program requirements. For example, qualifying policies must include inflation protection if you are 75 or younger at the time you apply for the policy.  No additional premium is required to participate in the program.  If you collect on the policy and end up exhausting your benefits, you may then be able to qualify for Medicaid yet still retain assets equal to the dollar amount of insurance benefits you've received, over and above the state's maximum asset criteria.

To illustrate:  Let's say you purchase a long-term care policy that meets all the criteria of the Florida Long Term Care Insurance Partnership.  The policy provides $100,000 in coverage.  You then enter a nursing home and receive custodial care.  The policy pays out, and after two years you have depleted the the $100,000 benefit.  Now, let us assume that at that point, $2,000.00 is the maximum dollar amount of assets Medicaid permits an applicant to retain (the figure Medicaid uses at the time of this writing). If you now apply for Medicaid, the State of Florida will allow you to keep $100,000 in additional in asssets without having to "spend down," for a total of $102,000.  Of course, to secure Medicaid benefits you will still need to meet all other non-asset eligibility requirements.

If you already own a long-term care policy purchased on or after March 1, 2003, your insurer is required to notify you of the benefits associated with a Partnership policy and offer an optional exchange.

Many factors need to be considered before buying a new long term care insurance policy or exchanging an existing policy for a new one that qualifies under the Florida Long-Term Care Insurance Partnership.  You should consult with your insurance professional before taking any steps.

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