Experts tell us that someone turning age 65 today has almost a 70 percent chance of needing some type of long-term care services and supports in their remaining years – and the cost of that care will be high. Knowing that, every adult should include long-term care planning in their overall estate plan. One way to plan for the high cost of long-term care is to purchase a long-term care insurance policy. Before you do that, the Indianapolis estate planning attorneys at Frank & Kraft explain what you should know about long-term care insurance in Indiana.
The Cost of Long-Term Care in Indiana
The longer you live, the better your odds are of needing some type of long-term care (LTC). If you are married or have a partner, he/she shares the same odds, making it even more likely that you will be faced with paying for LTC at some point. Nationally, the average cost of LTC in a private room in a nursing care facility was about $100,000 in 2022. The cost of LTC in Indiana runs about parallel to the national average at just over $104,000 for an average year in LTC care in 2022. The cost to reside in an assisted living facility ran about $51,000 in Indiana that same year. While you may rely on Medicare to cover most healthcare expenses once you reach retirement age, Medicare will not pay for long-term nursing home care. If you retained a separate health insurance policy after retiring, that policy probably also excludes LTC coverage.
What Is Long-Term Care Insurance?
Long-term care insurance is basically exactly what it sounds like – an insurance policy that purports to pay for expenses related to long-term care. Unfortunately, long-term care insurance policies have historically been difficult to understand and full of exclusions and exceptions to coverage, making them a veritable minefield for consumers. To help consumers purchase effective long-term care coverage, Indiana created the Indiana Long Term Care Insurance Program (ILTCIP). The ILTCIP is a partnership between the State of Indiana and private long-term care insurance companies. Insurance companies voluntarily agree to participate in the Program by offering long term care insurance policies that meet more stringent State requirements than other policies. Policies approved under the Program are better known as “Partnership policies.” For 2023, Partnership Policies must provide a minimum daily benefit of $115 and a minimum initial policy amount of at least $474,091.
Can I Qualify for Medicaid If I Have Long-Term Care Insurance in Indiana?
Another important benefit to [purchasing LTC insurance through the ILTCIP is that you get a “Medicaid guarantee” if you have one of the Partnership Policies.” Unlike Medicare, Medicaid does cover LTC expenses; however, Medicaid employs very strict income and asset limits when determining eligibility. The ILTCIP program rules ensure that if you purchase a program policy you have a guarantee your assets will be protected from the Medicaid spend-down requirement that is used if an applicant’s assets exceed the program limit. Your assets are also protected from Medicaid estate recovery in an amount at least equal to the value of benefits used.
The ILTCIP rules as well as the Medicaid eligibility and estate recovery rules are complex and subject to change. Before you decide to purchase a long-term care insurance policy in Indiana, consult with your estate planning attorney to make sure that a LTC policy fits into your overall long-term care planning component.
Contact Indianapolis Estate Planning Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about long-term care insurance in Indiana, contact the experienced Indianapolis estate planning attorneys at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.
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