New Information Regarding the Michigan Medicaid Long-Term Care Insurance Partnership Program

Early Planning Can Protect Your Life Savings

New Information Regarding the Michigan Medicaid Long-Term Care Insurance Partnership Program

Certain long-term care insurance policies sold in Michigan may now qualify for the Michigan Medicaid Long-Term Care Insurance Partnership Program.  This Partnership will allow those who have eligible long-term care insurance policies to qualify for Medicaid benefits AND protect a larger amount of their assets.  These assets will also be protected from Estate Recovery and instead, be able to pass to loved ones.

New Information Regarding the Michigan Medicaid Long-Term Care Insurance Partnership ProgramCurrently, in order to be eligible for long-term care Medicaid, a married couple can keep assets in an amount up to $119,220.00. A single person can keep a maximum of $2,000.00.  However, these asset limits will be increased for those with an eligible long-term care policy.  Generally, this allows a person to keep his or her assets equal to the amount of insurance benefits paid on his or her behalf under a qualified Partnership Program policy.

New Information Regarding the Michigan Medicaid Long-Term Care Insurance Partnership Program 2In order for a long-term care policy to be qualified for the Michigan Medicaid Long-Term Care Insurance Partnership Program, at a minimum, the policy must:

  • Be issued to an individual after December 31, 2007;
  • Cover an individual who was a resident of Michigan when coverage first becomes effective under the insurance policy;
  • Be tax-qualified under Section 7702(B)(b) of the Internal Revenue Code of 1986;
  • Meet prescribed consumer protection standards, and
  • Provide the following inflation protections:
  1. For ages 60 and younger – provide compound annual inflation protection,
  2. For ages 61 through 75 – provide some level of inflation protection,
  3. For ages 76 and older – inflation protection may be offered but is not required.

The insurance company will provide written documentation with the long-term care policy stating if it is qualified for the Michigan Medicaid Long-Term Care Insurance Partnership Program.

It is important to note that certain types of changes to a qualified long-term care policy may disqualify it from the Michigan Medicaid Long-Term Care Insurance Partnership Program.  Before making any changes to a qualified Partnership Program policy, one should first consult with the insurance company to determine the effect of the proposed change.  For example, if the inflation protection were lowered or dropped altogether, the insurance policy would no longer be eligible for the Michigan Medicaid Long-Term Care Insurance Partnership Program.  Also, moving to a state without a Partnership Program, or to one that has not agreed to accept long-term care insurance issued in a different state (reciprocity), is another way that a Partnership Program insurance policy can lose its eligibility for the Partnership Program.  Additionally, state and/or federal laws are continually changing, which could also affect your Partnership Program status.

The attorneys at SSR Law Office can help you evaluate your estate plan and discuss how a Michigan Medicaid Long-Term Care Insurance Partnership Program eligible long-term care insurance policy can help protect your “nest egg” from the rising costs of long-term care.