Effective January 1st, 2008, Minnesota launches a new "Partnership" with Long Term Care Insurance and Medicaid (recognized as Medical Assistance in Minnesota). The Partnership offers all Minnesotans an exciting new reason to consider Long Term Care Insurance. The government cannot afford to continue funding care for everyone who falls into the Medicaid safety net because of exhausting one's assets due to long term care costs, so they have created an incentive.
The incentive is a conditioned Long Term Care Partnership policy, which will protect a portion of one's assets from the Medicaid spend-down, even after the policy was exhausted. The asset portion that is protected is based on the dollar amount of your Partnership Long Term Care Policy. If, for example, you buy a $300,000 maximum benefit LTC policy, that is what you can protect. In other words, Minnesota promises to raise the countable assets for Medical Assistance eligibility to the amount of your LTC benefit amount at the time of application. The Medicaid safety net is still there if one should exhaust their policy benefits, but now a greater portion of one's assets can be excluded as countable assets when applying for MA, as a reward for insuring this long term care exposure.
When Medicaid was signed into law in 1965, the intent was to help poor children and single mothers. In the beginning, the program was structurally balanced. Things changed and non-welfare recipients entered the program, and as demographics changed, the number of taxpaying workers fell while the number of beneficiaries increased. Half of all long term care expense is now paid by Medicaid. In Minnesota, health and human services are the 2nd largest component of the State budget, and is the fastest growing category of State spending. Early studies have estimated that an LTC Partnership program will save state taxpayers as much as $154 million dollars by the year 2030. It makes sense. We insure our homes, cars, businesses, and health; and why not our assets? The new LTC Partnership Program plan makes sense.
