New Law Aims to Protect Assets of Senior Citizens
New legislation could save the state millions and will protect seniors' assets, according to state Insurance Commis-sioner Wayne Goodwin and Health and Human Services Secretary Lanier Cansler.
The legislation, signed into law by Gov. Bev Perdue, implements a partnership designed to encourage aging North Carolinians to purchase long-term care insurance, while providing important consumer protections. It goes into effect Jan. 1, 2011.
Since North Carolina's aging baby boomer generation represent the largest segment of the population, Perdue joined Goodwin and Cansler in supporting provisions that will protect residents who invest in long-term care insurance. The bill gives consumers the option to exempt a portion of their assets from Medicaid spend down requirements, while protecting the same amount at estate recovery, a news release said. The program also requires that policy benefits increase over time as protection against inflation.
"Especially in today's economy, our aging citizens are looking for protections and economic stability for their futures," Perdue said. "This new partnership helps ensure the policies they purchase will pay off in the long run."
Goodwin said, "The partnership arrangement encourages folks to plan for their future long-term care expenses with the security of knowing if they exhaust their private insurance there will still be some help available."
Cansler added, "Now is clearly the time for the long-term care partnership program and other efforts to help lessen future Medicaid expenses associated with the high and growing costs of long-term care."
This is how the partnership works: A private partnership's policy pays for services such as in-home care, community-based services or nursing home care. When the partnership policy's insurance benefits are used, Medicaid disregards the exact dollar amount paid by the insurance company when determining qualification of long-term care Medicaid benefits, the news release said. Medicaid does not recover this money even after the insured's death.
For example, if a partnership policy is $200,000, and that amount of benefits is used, but more care is needed, a person can apply for Medicaid coverage. In the application, $200,000 of personal assets - such as savings, family-owned businesses or farms - would be exempted. Further, Medicaid would not recover that $200,000 from the person's estate's resources after the person dies.
"The bottom line is that this partnership program will allow our citizens to keep more of what they've earned and saved over the course of their lives, and still be able to meet Medicaid eligibility requirements," Goodwin said.
Cansler said, "With the aging of more than 2.3 million baby boomers, North Carolina is joining the ranks of states offering this public-private approach to encouraging individuals and families to plan for and manage the costs of long-term care through the purchase of private long-term care insurance that also offers some protection of their assets."
North Carolina joins 33 other states that have implemented long-term care partnership programs, and many states with similar laws have documented savings of millions of dollars in Medicaid spending and seen delays in Medicaid enrollment, according to a release from the state.
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