Long-Term Care Insurance and Medicaid

by Beth

My husband and I are considering buying long-term care insurance, with the thought that if one of us needs this type of care first, that spouse can get into a good facility, then switch to Medicaid when the insurance runs out.

But how would it affect the other spouse if the one in the facility goes on Medicaid? I know the other spouse can stay in their home, but what happens to their 401Ks (each of us has a 401K) and any annuities and savings?

Thanks!

Comments for Long-Term Care Insurance and Medicaid

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May 08, 2013
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LTC Partnership Rules
by: Gabriel Heiser

Once the long-term care insurance is maxed out for the spouse in the nursing home, the usual Medicaid rules would only protect approximately $116,000 of countable assets of the at-home spouse. One way to avoid this result would be to purchase a long-term care insurance product that meets the requirements of your state’s Long-Term Care Partnership Program. Such programs exempt from Medicaid countability the same dollar value as is covered by the LTC policy itself.

So if your policy covers up to, say, $200,000 in coverage, and you need nursing home care, then the LTC policy would cover the costs up to that total amount, and then when you apply for Medicaid it would exempt an additional $200,000 of assets when calculating your eligibility. A quick Google search for LTC Partnership and your state name will help you find out the rules for such program in your state.

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--by Beth Heikkinen
Marquette, Michigan

I just want to thank you for this site. It answered my questions. I think many people that do research on the net take it for granted and when they find what they are looking for they forget "someone put time, money, etc into providing me with this information."

Thank you!

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