Last updated June 17, 2024
When to use:
If a caller asks about the long-term care insurance.
Please note: Policy holders need to be advised to call their LTCP company to get issues resolved, including finding out if the policy qualifies for Partnership. Commerce will not be providing this assistance. Questions about the Genworth lawsuit should be referred to Commerce at 651-539-1500.
What is long term care insurance:
Long Term Care (LTC) insurance is intended to help cover the costs of care for a chronic medical condition or disability. In addition to basic long term care insurance plans, Minnesota created the Long Term Care Partnership program, a public private partnership between the state of Minnesota and insurance providers. The long term care insurance plans in this program are intended to help Minnesotans protect more of their assets. The Minnesota Department of Commerce is responsible for approving these plans while the Minnesota Department of Human Services administers the program. It's important to note that before applying for Medical Assistance, the person must declare a Protected Asset Limit (PAL), which states what assets they want to protect from asset review when applying for Medical Assistance (e.g., cabin, second home, or second car).
As of May 2024, the DHS/MBA LTCP website has been retired. The MN Dept of Commerce has added MN LTCP information to their website: LTC Partnership.
Benefits:
Usually, in order to qualify for Medical Assistance, a consumer must first draw down their personal assets. The LTC Partnership gives Minnesota consumers the ability to protect assets up to the amount of long-term care coverage they purchase. For example, consumers who purchase $100,000 of coverage would be able to keep an additional $100,000 of their assets if benefits from a long-term care policy are exhausted and they need to apply for Medical Assistance.
How the MN LTC Partnership works:
*As of January 1, 2024, DHS has modified the LTCP Medical Assistance manual information. It is the beneficiary's responsibility to get proof that their policy qualified as LTCP.
A person that purchases a qualified partnership policy and eventually needs long-term care services--like help with activities of daily living (dressing, eating, etc.)--may be able to use the policy first (if they meet the policy requirements) to pay for long-term care services before applying for Medical Assistance.
By using the partnership policy to pay for long-term care services first, the policyholder is able to set aside savings and investments (assets) equal to the amount of benefits paid by the partnership policy if later they need to apply for Medical Assistance to pay for their long-term services. This is known as "asset disregard." It means that you will have to contribute less of your own money to pay for your care, if you need to apply for Medical Assistance.
The partnership may also delay or remove the need for you to apply for Medical Assistance because the policy pays for some of the long-term care services.
Eligibility:
The partnership policy must be qualified under federal tax law.
- Policy holder may be able to deduct part of the premium from their taxes as a medical expense.
- The benefits received from a partnership qualified policy are generally not taxable as income.
- The policyholder is unable to perform two activities of daily living with substantial assistance for at least 90 days before benefits are triggered.
- The policyholder must require substantial supervision in order for cognitive impairment to be covered.
- A policy from a health care practitioner is required for payments of benefits.
The policy must meet federal consumer protection requirements.
The policy must be certified as a qualified Partnership policy by the Minnesota Department of Commerce.
The policy was issued after July 1, 2006, the date the Long Term Care Partnership program took effect.
The Partnership policy must include inflation protection as follows:
- For a partnership policy purchased by a person under age 61: it must provide compound annual inflation protection.
- For a partnership policy purchased by a person age 61 through age 75: some level of inflation protection is required.
- For a partnership policy purchased by a person age 76 and older: the policy may, but is not required, to provide some level of inflation protection.
- Inflation protection for a partnership policy may not be less than one percent per year or a rate based on the consumer price index.
Definitions:
Activities of daily living (ADLs): Used to describe fundamental skills required to independently care for oneself. These skills include personal hygiene, dressing, eating, maintaining continence (using the restroom), transferring (moving from one position to another), and mobility (moving from one place to another).
Benefit amount: The total amount that the policy is worth or how much the policy will pay out.
Benefit period: How long the benefits will pay out.
Benefit triggers: These are the requirements that must be met before accessing insurance benefits.
Death benefit: The amount paid to a beneficiary upon death.
Inflation option: Option in the policy that factors in inflation (to account for rising costs over time).
Premium: How much you owe the insurance provider to participate in the policy.
Waiting period: Once you qualify for benefits, you wait this long before benefits will pay out.
What to do:
Step 1: Answer basic questions they may have.
If the caller has basic questions about long term care partnership programs that you feel confident answering, please do.
Step 2: Tell them where to find Long Term Care Partnership policy information.
If you type in "Long Term Care Partnership" into MinnesotaHelp.info, you'll get a list of options that have "Long Term Care Partnership" clearly marked at the top. Provide a list of options like you would with any other type of help through MinnesotaHelp.info.
Clients applying for MA-LTC who have a LTC insurance policy should have their LTC insurer complete the Long-Term Care Partnership Insurance Policy Evaluation form to verify it qualifies as a LTC partnership policy.
Step 3: Encourage caller to contact a financial advisor.
Since every person's situation is unique, it's in the caller's best interest to speak to a financial advisor who can help them within their specific situation. Therefore, our most helpful role is to get them to connect with a financial advisor. If they do not have a financial advisor, direct them to the Financial Planning Association of Minnesota to find one.
Resources: