Transcript Indiana LTC Partnership Program 7 Hours CE Credit

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Planning for Your Long Term Care
Needs
• Good News – We Are Living Longer
• Bad News – We Are Living Longer
• 7 out of 10 individuals will need Home Health Care
some time during their lives.
• Currently, 40% of those using long term care
services in the U.S. are between the ages of 18 and
64.
• Overall, individuals living over the age of 65 will
have a 60-70% chance of needing some type of long
term care service
As a population, we are living longer
because of healthier lifestyles, new
medical technology, and drug
treatments. These medical advances
enable us to live with a mental or
physical condition longer than ever
before. A 65 year old individual today
is expected to live well into his/her
late 80’s. Because we are aging and
living longer, our ability to perform
normal activities of daily living could
be hindered due to a medical issue.
Long term care services assist an
individual with everyday activities
such as eating, bathing, dressing, and
mobility that are hindered because
of a medical or mental condition.
The Indiana Long Term Care Insurance Program
(ILTCIP) is an innovative working partnership
between the State of Indiana and private long
term care insurance companies. Indiana has
taken the lead in helping its residents protect
their hard-earned life savings from the high cost
of long term care by promoting the awareness of
long term care.
All long term care insurance policies available from
insurance companies are not the same. Policies are
approved by the Indiana Department of Insurance as
meeting required state statutes. “Partnership policies”
offer the consumer additional benefits for their long
term care needs and protection for their savings. In
addition, Partnership insurance policies qualify for a
state tax deduction helping Hoosiers to protect even
more of their savings.
INDIANA DOI
 Supervises the organization, regulation, examination,
rehabilitation, liquidation, and conservation of all
insurance companies in Indiana; issues a certificate of
authority to a company licensed to do business in
Indiana
 Enforces, administers, and executes the insurance laws
of Indiana
 Regulates insurance agent licensing requirements
INDIANA DOI
 LTC LICENSING REQUIREMENTS:
 Resident
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Be licensed to sell health insurance; AND
Complete an initial 8-hour basic long term care insurance
courses; AND
Complete 5 hours of LTCI CE every 2 years to maintain
eligibility to sell LTCI
If selling partnership policies, complete a one-time 7 hour IN
Partnership specific course
SHIP PROGRAM
 Provides free health insurance information for seniors
and pre-retirees
 Part of a federal network of SHIP programs located in
every state
 In Indiana, SHIP is sponsored by the Centers for
Medicare and Medicaid Services
SHIP PROGRAM
 Provides educational materials and brochures
 Helps explain the Medicare program
 Educates how to file Medicare claims and how to
appeal Medicare decisions
 Explains how to make informed decisions about health
care policies
 Informs a Medicare beneficiary or health insurance
policyholder of their rights
SHIP PROGRAM
 Shows how to evaluate the various prescriptions,
Medicare supplement, and LTC insurances available
 Refers to appropriate agencies for additional help
 Provides a speaker for presentation to a group, club, or
senior center
LTC INSURANCE IN INDIANA
 Two categories of LTC insurance are approved by IDOI
for sale in Indiana:
 Indiana Long Term Care Insurance Program policies
(Partnership) and
 Traditional Long Term Care insurance policies
LTC INSURANCE IN INDIANA
 Asset Protection
 Only LTC insurance policies approved under the
Indiana LTC Insurance Program provide Medicaid
Asset Protection
 To identify if a LTC policy is a Partnership policy
(qualifies for asset protection), special wording is on 1)
Outline of Coverage, 2) application, and 3) front page
of the policy
FAVORABLE TAX STATUS
 Indiana residents who pay premiums for policies
approved under the Indiana LTC Partnership Program
can receive a state tax deduction
 A taxpayer may take this deduction only for premiums
paid (during the tax year) for an Indiana Partnership
policy for himself/herself, a spouse, or both taxpayer
and spouse
 The tax break is a deduction, not a credit
FAVORABLE TAX STATUS
 Federal
 HIPAA of 1996 is a federal law providing limited
federal tax breaks for owners of LTC policies that meet
specific standards (tax-qualified)
FAVORABLE TAX STATUS
 Tax Breaks Provided
 Premiums
 Premiums for self-employed
 Benefits
FAVORABLE TAX STATUS
 Questions
 How do I know if a policy is a federally tax-qualified
LTC insurance policy?
 What are some of the features included in federally
tax-qualified LTC policies?
 Benefit Triggers
 Non-Forfeiture Benefit
 Required Consumer Protection Standards
HISTORY
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Legislative History
Robert Wood Johnson Foundation Planning Grant
Steering Committee and Task Force
Program Design
Attempts at Federal Legislation
Medicaid State Plan Amendment Submitted
Robert Wood Johnson Foundation Implementation Grant
Plan Amendment Approved
Program Implementation
Amendments
PROGRAM FEATURES
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One Year Policies
Minimum Daily Benefit
Pot of Dollars (or Pool)
Inflation Protection
Pooled Risk
Comprehensive Policies
Case Management
Insured Event Determination
 Tax-Qualified ILTCIP policies
 Non-tax qualified ILTCIP policy
PROGRAM FEATURES
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Measuring cognitive impairment for ILTCIP policies
Issue Age
30-Day Free Look
Step-Down Coverage Provision
Contact Designee
Minimum Reinstatement Period
Coordination of Benefits
No Policy Change Without Acceptance
Assisted Living Facility Benefit
Riders
DEFICIT REDUCTION ACT
 Expansion
 Reciprocity for Medicaid Asset Protection
 Medicaid Eligibility
ASSET PROTECTION
 Medicaid Asset Protection is a special state-added
benefit found only in LTC policies approved by the
Indiana LTCIP
 The Medicaid asset protection feature with a
Partnership LTC policy provides additional financial
protection if a policyholder applies for Medicaid
eligibility
 The state has approval from the federal government to
offer asset protection only, this program does not offer
income protection
ASSET PROTECTION
 Combination Asset Protection
 Total Asset Protection
 Initial Purchases
 Policy Effective Date
 Why the Offer is Important
 Benefits Used
 Reduction of Coverage
 Policies with Shared Benefits
 Growth of Assets
RECIPROCITY
 Questions Regarding Reciprocity
 What does this mean for Indiana Partnership
policyholders?
 Does this change my Partnership policy if I remain in
Indiana
 If my Partnership policy was effective before April 1,
2009, am I covered under this reciprocity agreement?
 What requirements have to be met to qualify for asset
protection in other states?
 Does this Reciprocity Agreement guarantee that I will
have asset protection with other states in the future?
MEDICAID ASSET PROTECTION
 There are two types of asset protection – Total and
Dollar-for-Dollar
 Total Asset Protection means all of your assets will be
disregarded during the Medicaid eligibility process,
should you choose to apply for help from Indiana
Medicaid
 Dollar-for-dollar asset protection means that you will
be allowed to retain one dollar of your assets for every
one dollar of benefits used in your Partnership policy
FAQ
 Why would I want to purchase a LTC policy?
 Doesn’t Medicare pay for LTC services?
 What is the ILTCIP?
 Doesn’t the State of Indiana sell policies under the
Partnership program?
 What is the difference between a traditional LTC
policy and a Partnership policy?
 What is asset protection?
FAQ
 Does a Partnership policy cost more than a traditional
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LTC policy
How do I purchase a Partnership LTC Policy?
How do I know if I have a Partnership policy?
If my policy is not a Partnership policy, can I add asset
protection?
I bought a LTC policy after 1993, but my agent did not
discuss a Partnership policy with me. Is this illegal?
How much asset protection will my Indiana
Partnership policy provide?
FAQ
 How do I find out how much coverage is required for
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total asset protection?
Is my income protected under an Indiana Partnership
Policy?
Is my LTC policy good if I move to another state?
Can I take a tax deduction for my LTC policy?
Since I have a Partnership LTC policy, am I
automatically eligible for Medicaid?
PARTICIPATING INSURERS
INSURANCE
COMPANY
TELEPHONE
NUMBER
*POLICY TYPES
AM BEST
MOODY'S
STANDARD &
POOR'S
Bankers Life and
Casualty Co.
888-282-8252
TQ Comprehensive
TQ Facility-only
B
Baa3
BB-
800-456-7766
TQ Comprehensive
(Individual/Group)
TQ Facility-only
A
A1
A
Genworth Life
Insurance Co.
John Hancock Life
Insurance Co.
(U.S.A.)
Massachusetts
Mutual Insurance
Co.
State Farm Mutual
Automobile
Insurance Co.
800-377-7311
TQ Comprehensive
A++
Aa1
AA+
800-272-2216
TQ Comprehensive
TQ Facility-only
A++
Aa1
AAA
866-855-1212
TQ Comprehensive
A++
Not Rated
AA
TransAmerica Life
Insurance Co.
800-227-3740
TQ Comprehensive
A+
A1
AA-
GENERAL INFORMATION
 Medicaid is a federal/state funded medical assistance
program that pays for approved and needed medical
care for persons who meet specific eligibility
requirements
 Applications for Medicaid assistance are taken at the
County office of Family and Children
GENERAL INFORMATION
 Eligibility:
 Applications must be in one of the following categories:
 Low income families with dependent children
 Pregnant women
 Newborns (up to age 1 if born to Medicaid recipient)
 Age 65 or older
 Individuals age 18,19, 2012
 Children under 19
 Blind
 Refugees
GENERAL INFORMATION
 And Meet medical criteria
 Meet the financial criteria
 Income (differs for individual or married couple)
 Countable assets (differs for individual or married
couple)
EXEMPT AND NON-EXEMPT ASSETS
 Exempt (not counted)
 Burial and Funeral Trusts
 Home
 Household Furnishings
 Income-Producing Property
 Life Insurance
 Personal Effects
 Real Property in the sole name of the community’s
spouse
 Vehicle
EXEMPT AND NON-EXEMPT ASSETS
 Non-Exempt (Counted)
 Annuities
 Cash
 Cash Value of Life Insurance
 Certificates of Deposit
 IRAs
 Series EE Bonds
 Money Market Funds
 Mutual Fund Shares
 Pension Funds
 Real Property
 Stocks and Bonds
ASSETS AND INCOME
 Annuities
 Bank Accounts and Certificates of Deposit
 IRAs
 Life Insurance with Cash Value
 Mutual Funds
 Retirement Plans
 Stocks and Bonds
INCOME
 What is Income?
 How is income treated in the eligibility determination
process?
 Annuities and IRAs: how are payments treated?
 May I transfer income?
LOOK BACK PERIOD
 Medicaid will look back 5 years from the time of
application to determine whether the applicant
transferred any assets for less than fair market value in
order to be eligible for Medicaid
 A transfer for less than fair market value is an illegal
transfer
CLOSING MEDICAID ELIGIBILITY
LOOPHOLES
 Annuities
 Transfer of Income
 Transfer Penalty for Inaction
 U.S. Savings Bonds
DEFICIT REDUCTION ACT (DRA
2005)
 Key Medicaid Asset Provisions
 Penalty period changes
 Hardship waiver
 Treatment of annuities
 Mandatory “income-first” rule
 Excluded coverage for substantial home equity
DEFICIT REDUCTION ACT (DRA
2005)
 Key Partnership Provisions
 Expansion
 Reciprocity
MEDICAID ESTATE RECOVERY
 Medicaid estate recovery is required by federal law
 Assets subject to recovery – all assets in the recipient’s
probate estate are subject to recovery
 Assets not subject to recovery – proceeds of a life
insurance policy, personal
effects/keepsakes/ornaments of the deceased, assets
protected by the use of an Indiana Partnership LTC
policy
 Filing of a claim
SPOUSAL IMPOVERISHMENT
PROTECTION LAW
 The Spousal Impoverishment Protection Law allows
the community spouse to keep some of the couple’s
income and assets while still qualifying the nursing
home spouse for Medicaid
INCOME, ASSETS, SPOUSAL IMPOVERISHMENT
Original Partnership States (IN, CA, NY, CT)
 Use the ‘reciprocity map’ slide for these samples:
1. A Bloomington, IN resident moves to San Diego, CA,
with a full asset protection LTCIP policy. What can
he/she expect if entering a nursing home in CA?
a. Full asset protection
b. Dollar for dollar asset protection
c. Only benefit is standard policy benefits paid
d. No benefits at all
2. What if a CA resident moves to IN?
Dollar for Dollar scenario (most states):
Harry and Sally have a total of $350,000 in assets including their home value of
$150,000. Their priority is to protect each other. Adult kids are doing well. They are
not particularly concerned with estate protection, but if ‘a little” is left for the grandkids,
“that would be nice”.
a. Show the couple that the home is exempt ($150,000) if the first spouse is in the
nursing home and $113,610 (2013) is exempt for the ‘at home’ spouse.
$350,000 total assets
-150,000 home
$200,000 assets
-100,000 (1/2 of countable assets)
$100,000 is amount required spent
Possible benefit choice of $190/day x 730 days (2 years) = $138,700 each
This should provide good initial protection for the at-home spouse. If the first
spouse dies, and then the second spouse needs care, then the home could become
countable and the $100,000 spousal protection would be reduced to $1,500 for a
single. But the asset protection of $138,700 PLUS the 5% compounded benefit
increases over time, would probably be a “nice something” for the grandkids.
[with 5% compound over 10-years = $225,928 of asset protection]
Total Asset Protection (IN- only)
a. Considering Harry and Sally again and they can afford full asset protection.
Solution is to exceed $291,050 benefit limit (i.e. combo of $200/day x 4 years =
$292,000 or $267/day x 3 years = $292,365) for total asset protection.
[with 5% compound over 10-years = $476,232 of total asset protection]
b. John and Mary have a $250,000 paid home, $300,000 IRA, and $350,000 in
invested assets. They originally thought that with Social Security and pension
incomes that they could personally afford to pay for any potential HHC or
Nursing Care from their investment earnings. However, since the economy
slumped and with investment portfolio only averaging around 5%, they realize
that they will not be able to protect their assets from convalescent care. Total
investments $650,000 x 5% = $32,500 annual investment income. At an
average of $200 of daily care costs, their investment income would only cover
162 days of care.
Solution is to exceed $291,050 benefit limit (i.e. combo of $200/day x 4 years
or $267/day x 3 years = $292,365) for total asset protection.
[with 5% compound over 10-years = $476,232 of total asset protection]
Asset Protection Case Studies
 Reduction of Coverage:
 In 1999, T.J. Foster bought an Indiana Partnership policy
with an unlimited benefit. In 2003, Mr. Foster reduced
his maximum benefit from unlimited to $180,000. The
State-state dollar amount in 2003 was $178,679. Since his
new maximum benefit is slightly more than the state-set
dollar amount in effect when he made the reduction, his
policy will provide total asset protection when the
benefits have been exhausted paying for his care
Dollar for Dollar Asset Policy
 Bob initially purchased a $150,000 insurance
Partnership policy that qualified as dollar for dollar
asset protection. Over the years the policy benefits
have increased to $174,000 due to the 5% inflation
factor. Bob has been diagnosed with early Alzheimer’s
disease and has need LTC services. His Partnership
policy had paid out $174,000.
Dollar for Dollar Asset Policy
 Bob continues to need care, but he (or his family) does
not have the financial resources to pay for ongoing LTC
services. Bob decides to apply for Medicaid assistance.
When Medicaid evaluates Bob’s eligibility, $174,000 of
his countable assets will be disregarded because of his
Partnership LTC policy (dollar for dollar). If Bob’s
assets are more than $174,000, he will have to spenddown to remain eligible for Medicaid assistance.
Total Asset Policy
 Same scenario except Bob initially purchased a
$240,000, Partnership policy that qualified as total
asset protection. Over the years with 5% inflation
protection, the policy benefits are now $278,000. If
Bob still needs care after all of his policy benefits have
been paid out and does not have the financial
resources to pay for continued care, he may have to
apply for Medicaid assistance. When Medicaid
evaluates Bob’s eligibility, all of his countable assets
would be disregarded because of his total asset
Partnership policy
Agent CE FAQs
Q. What are the licensing requirements for a Resident agent to sell
long term care?
A. Producers must hold either an Accident & Health or Life, Accident &
Health license to sell LTC insurance. Before marketing, selling, or soliciting
any LTC products, all producers must:
1) Complete an 8 hour basic LTC course. The course may be self-study or
online.
2) After completing the initial 8 hour course, complete a minimum of 5
hours (one 5 hour course or combination of 5 hours) of continuing
education in LTC in each renewal period. Courses can be self-study or online.
3) Non-compliance with the 5 hour renewal requirement will require
completion of the 8 hour basic LTC class again.
Partnership
1) To sell Indiana Partnership LTC policies, a producer must comply with the
above and complete a 7 hour Partnership LTC course. This course is a one
time course, in-classroom only.
2) An annual 3 hour Seminar for Partners class is also offered as a refresher
course on Partnership. (Not Required)
Agent CE FAQs
Q. What are the licensing requirements for a Non-Resident agent to sell
long term care?
A. The basic 8 hour and 5 hour renewal requirements are waived for agents
holding an IN non-resident health license if Indiana has licensing reciprocity
with that state. The 7 hour IN Partnership CE requirement does apply to
Non-Resident agents and is not waived.
Q. Where can I find a record of my CE credits?
A. An agent is required to keep copies of original CE certificates. The DOI
does not keep copies of certificates. Insurance companies will request copies
of LTC CE certificates when agents submit applications or are appointed.
Starting January 1, 2007, CE providers were required to post CE courses
completed on the SIRCON database. Click here to link to SIRCON database.
Q. Will LTC CE credits count toward my CE requirements for my license?
A. Yes.
Q. Does another state’s Partnership CE course satisfy Indiana’s
Partnership CE requirement?
A. No. As one of the 4 “original” Partnership states, Indiana’s
Partnership/Medicaid programs are different than other states. The IN
Partnership continuing education course is specific to Indiana.
Agent LTC Campaign
PLANNING FOR YOUR FUTURE CAMPAIGN
The State of Indiana wants to encourage Hoosiers to plan for their future
health care needs. Many consumers mistakenly believe Medicare will pay for
expenses for extended long term care expenses. In Indiana, home health
care can cost over $20,000 a year. Full-time care in a nursing facility can cost
over $70,000 a year.
A letter from the Governor will be sent to Hoosiers encouraging them to
plan for long term care needs The consumer can return the reply card or call
a toll-free number to receive more information and to be contacted by a
qualified agent about long term care insurance policies.
Agents who are licensed and LTC certified are eligible to participate in the
campaign. Indiana residents have several policy options – traditional and
Partnership - if a long term care insurance policy is the right choice for them
and their families.
Agent registration is available at https://online.tlleadmanager2.com/ILTCIP.
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