“What are the main types of long term care?” – Anita Park

What can I do to prepare for long term care and how can I afford it?” – Lucia Sullivan

“My husband and I are looking at independent retirement. Between us we have 4 life insurance policies. Do we have to be Medicaid eligible in income level to access life care funding help?” – Dave and Samantha

To qualify for Medicaid to pay for long term care supports and services, the applicant needs to be both below the poverty line in terms of assets and income and must also meet the definitions of “medical necessity” to access licensed, skilled nursing care. Life Care Funding provides the opportunity to convert an existing life insurance policy of any type (Term, Universal, Whole, and Group) into a Long Term Care Benefit Plan that will cover any form of Senior Care services including: Home Care, Assisted Living, Memory Care, Nursing Homes and Hospice. The Benefit Plan is a Medicaid qualified spend-down, which means that a person using the plan would remain “private pay” and could choose any form and location of care they desire. If they spend down the benefit account, they would then be able to seamlessly move over to Medicaid.

“Can a person have life insurance and still qualify? Are there limits?” – Mindy

Life insurance would count against a person who applies for Medicaid. It is considered an asset that must either be spent down before becoming Medicaid eligible. If a family kept a policy they would be subject to “Asset Recovery” action by the state in probate court when their loved one dies to “claw back” as much money spent by Medicaid on care as possible from the death benefit. To enroll in the Long Term Care Benefit Plan, a person must have an existing life insurance policy with a death benefit of a minimum of $50,000 to qualify. Also, to qualify they would need to start paying for some form of care (assisted living, nursing, hospice or in-home care services) within the next 90 days.

“Can a person have an annuity and qualify? Are there limits?” – Debra

At this time annuities do not qualify for conversion as they are considered as an investment.

“Does cash value in a life insurance policy count as an asset? Are there limits? What if the cash value is being used to pay the monthly premiums of the insurance policy?” – Janice

This answer varies – Medicaid would consider the cash value of the policy as a disqualifying asset for eligibility. To enroll in a Long Term Care Benefit Plan, the conversion value of the policy is based on the death benefit. The Long Term Care Benefit Plan is considered a Medicaid qualified spend down. Because the policy is no longer an asset in the owner’s name, and the Benefit can only be used to pay for long term care services the Benefit is tax-exempt, as well as being a qualified Benefit to use with the VA Aide and Attendance monthly pension and a Medicaid qualified spend down.

Cash value has no impact on eligibility on enrolling in the Long Term Care Benefit Plan. Once enrolled, the insured is NO longer responsible for any future premium payments.

“The family of a resident living in an LTC facility wants to take out a life insurance policy. This resident’ is a Medicaid recipient. How would the life insurance policy effect the Medicaid status? Are there any other important issues related to taking out a life insurance policy for LTC residents?” – Scott

A resident of an LTC facility would not qualify to be issued a life insurance or a long term care insurance policy by an insurance company. Because of their advanced and chronic medical conditions, these people would be what is known as an “automatic decline”. Also, owning a life insurance policy can be considered a dis-qualifying asset for Medicaid eligibility and/or a death benefit would be subject to mandatory “Asset Recovery” action by the state Medicaid department. If a person currently owns a life insurance policy of any type (Term, Universal, Whole, and Group) with a minimum death benefit of $50,000 and they have an immediate need for long term care, they would be a candidate to convert their policy to enroll in the Long Term Care Benefit Plan.