Wednesday, March 08, 2006

Ch-Ch-Ch-Changes (in Long Term Care)

According to a new study, "69 percent of today’s 65-year-olds will eventually need long-term care. But for many seniors, this may simply mean help bathing, dressing or using the toilet."
Pennsylvania State University professor Peter Kemper, one of the authors, explains that “(n)eeding help with just one activity is not such a serious need for care, “(it) might be relatively easily provided by family.”[Ibid]
The study concluded that it's those folks already in nursing homes who are hardest hit. The study also projects that 37 percent of all 65-year-olds will need long-term care in a nursing home or assisted-living facility.
The timing of this study is interesting, as well: The Deficit Reduction Omnibus Reconciliation Act of 2005 is the new law that tightens Medicaid long term care eligibility rules and allows for the nationwide expansion of the Long Term Care (LTC) Partnership program. Some DRORA ’05 changes include:
■Extends the "look-back" period for the transfer of assets from three years to five years prior to applying for Medicaid coverage. Note on grandfathering : The five-year-look-back period will be phased in, since it will only affect transfers made after the law's effective date.
■Applicants will need to meet the required spend-down limits prior to the beginning of the penalty period.
■Legislation will deny Medicaid coverage for nursing home care to any applicant with home equity valued above $500,000 (up to $750,000 in some states).
The new law also expands the availability of LTCi partnership plans nationally. Each individual state has the opportunity to implement a Partnership program, with possible availability in some states as soon as this summer. Partnership policies help to protect state Medicaid budgets by requiring that the benefits of those qualifying insurance policies be paid before Medicaid benefits can be accessed. (The four existing partnership programs in CA, CT, IN, and NY will be grandfathered.)
These new partnership plans allow consumers to protect a portion of their assets that would otherwise be spent down prior to qualifying for Medicaid coverage - ensuring that more of the funds they've accumulated for retirement will be protected.
Under the expansion of these state partnerships, each state must have the same requirements for partnership and non-partnership policies. The objective is to have uniform requirements.
Basically, this means that any tax-qualified LTCi policy approved by a state insurance department (which meets the requirements of the federal partnership program) would qualify for asset protection, on a dollar-for-dollar basis, up to the policy maximum.
So what's the bottom line? The gummint is telling us - loud and clear - to begin taking this issue seriously and personally. That is, long term care will be less of a government-sponsored activity, and more our own responsibility.
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