State of Missouri - Own Your Future

Long-term care is the kind of help you need if you are unable to care for yourself because of prolonged illness or disability. It can range from help with daily activities at home, such as bathing and dressing, to skilled nursing care in a nursing home.

What does long-term care insurance cover?

Long-term care insurance helps pay for a variety of supportive services that assist people with health or personal care that might result from a chronic disease, serious accident, sudden illness, or cognitive impairment such as Alzheimer’s disease. Long-term care services are different from traditional medical care because their focus is not necessarily to improve the medical condition of an individual, but to maintain the individual’s quality of life.

Long-term care services may be provided by a health care professional such as a nurse, a home health aide, or other personal care provider. Varying amounts and levels of care can take place in a variety of locations. This can range from a few hours of care per week in one’s home to around-the-clock care in a nursing facility.

Medicare or other types of health insurance generally do not cover long-term care. Long-term care insurance policies vary greatly in the amount and scope of services they cover and the settings in which services are delivered.

What is Medicaid?

Medicaid is a health insurance program jointly administered and funded by the federal and state government. It provides health care services for eligible low-income individuals. People qualify for Medicaid by meeting set financial standards and by fitting into a specific covered group such as children, pregnant women, or individuals who are elderly or who have disabilities. The Department of Social Services, Family Support Division, and MoHealthNet administer the Missouri Medicaid program.

What is a long-term care partnership plan?

A long-term care insurance Partnership Plan has three basic requirements:

The policy must have the same provisions as the National Association of Insurance Commissioner’s (NAIC) model law. Since 2004, all plans sold in Missouri must comply with the model and be approved by the Department of Insurance, Financial Institutions & Professional Registration (DIFP) prior to use.
The policy must be tax-qualified. This means the Internal Revenue Service (IRS) does not tax the policy’s benefits.
The policy must contain certain inflation protection provisions at the time it is sold:

Age	Compound Annual Inflation Protection
Less than 61	Company must offer 5 percent. If rejected by the consumer, a minimum of 3 percent or changes based on the consumer price index must apply.
61 – 75	Some level of inflation protection must apply. No minimum level is established.
Over 75	No inflation protection required for Partnership Plans.

How does a long-term care partnership policy work?

States are required to develop partnerships using the “dollar for dollar” model. For every dollar that a long-term care partnership insurance policy pays out in benefits, a dollar of personal assets can be protected (disregarded during the eligibility determination) if the individual chooses to apply for Medicaid. In other words, long-term care partnership policyholders who apply for Medicaid coverage are able to maintain some level of assets (equal to the long-term care insurance benefits paid) above the $999.99 Medicaid asset limit currently in place for eligibility purposes.

The Federal Deficit Reduction Act of 2005 renewed states' ability to establish partnerships and outlined specific requirements for partnership policies:

All partnership policies must include inflation protection for individuals under 61 and some form of inflation protection for individuals ages 61 – 76. Inflation protection helps the policy keep up with the rising costs of long-term care services.
According to federal law, Missouri is not allowed to “grandfather” current policies. Long-term care insurance policyholders who wish to obtain a partnership policy should contact their agent or carrier of their choice regarding issuance of a new partnership policy.

What is the advantage of a partnership policy over a non-partnership policy?

Partnership policies will be priced similar to non-partnership policies that have similar benefit, policy, and inflation protection features.

What if I already have a long-term care policy?

If your current policy fits the three basic requirements and you purchased it before February 8, 2006, call your insurance agent or company and ask that the Partnership benefit be added to your policy. No charge should apply to add this benefit. If your current policy does not meet the three basic requirements, you may need to purchase additional coverage in order to have your policy become a Partnership Plan.

Companies offering Partnership Plans must offer consumers the opportunity to exchange some plans within 180 days from the time a company starts to market individual or group Partnership plans. Policyholders with plans purchased after February 8, 2006 will receive notice of the offer to exchange. However, you don’t have to wait for the notice - call your insurance agent or company at any time to ask about Partnership Plans.

Which insurance carriers will offer partnership policies?

At this point, it is too early to tell exactly which carriers will offer partnership policies in Missouri. Every carrier authorized to offer health insurance in Missouri is eligible to offer partnership policies, but the policies must be approved by the Department of Insurance, Financial Institutions & Professional Registration.

How will owners of partnership policies and their family members know that a policy qualifies as a partnership policy?

This information will be included with the policy, but may not be printed on the policy itself. If there is any doubt, ask your insurance agent or call the insurance company.

Will my Missouri partnership policy qualify me for dollar-for-dollar asset protection in other states?

Yes. Missouri plans to participate in a national reciprocity agreement; however, it is likely that not all states will participate. The applicant will also need to meet all Medicaid requirements of the new state of residence.

When should partnership policyholders apply for Medicaid?

Everyone has the right to apply for Medicaid at anytime.
If the partnership policyholder exhausts the benefits of his or her long-term care partnership policy (policy exhaustion is not required in Missouri).
When the partnership policyholder/spouse/family/friend feels that the individual is having a difficult time paying for care.

If I exhaust my long-term care partnership policy, will I automatically qualify for Medicaid?

No. You must meet the level of care, income and resource requirements for long-term care.

What makes Missouri's partnership program unique?

Allows exchanges of contracts that already meet the partnership criteria.
Inflation protection will be a base 3% annual compound level, but could be based on the Consumer Price Index (CPI).
Insurance producers will need to take an 8 hour training course prior to selling a partnership policy. Producers will also need to take a 4 hour continuing education course every other year thereafter.

Am I eligible for Medicaid?

The purchase of a long-term care partnership policy does not guarantee access to Medicaid.
Medicaid eligibility is complex and must be determined on an individual, case-by-case basis.
Medicaid eligibility determinations are completed by the applicant’s local department of social services office.
Medicaid eligibility has both financial and non-financial requirements.
Financial requirements include evaluation of both income and resources (assets).
Non-financial requirements include proof of Missouri residency, citizenship and identity, a social security number, and proof of a required level of care for long-term care services.
Medicaid eligibility has special rules for married people, when only one is receiving long-term care services.
Medicaid eligibility has special rules that apply to home property in which the applicant resides, vehicles and burial arrangements.

Will Medicare cover all the nursing home costs for seniors and the disabled?

No. Medicare, a federal health insurance program for disabled adults and adults age 65 and older, has specific rules that apply for payment of nursing home care. First, Medicare requires a 3-day hospital stay prior to transfer to a nursing home and after admission to the nursing facility, services provided in the nursing home must relate to the illness or injury that cause the hospitalization. After admission, Medicare coverage for nursing home care terminates once an individual's needs change from skilled care to custodial care. Finally, Medicare coverage is limited to 100 days of care per benefit period. A Medicare beneficiarys average-length-stay in a nursing facility is about 31 days per benefit period as a result of these rules. Medicare does not pay for nursing home custodial care over an extended period of time.

What other options are available to finance long-term care?

A private health insurance or retirement health plan.
An individual's own income, savings or sale of other assets.
Relying on children or relatives to provide care on an informal basis.
Medicaid, a public medical assistance program for people with low-income and limited financial resources.
Medicare, a federal health insurance program for disabled adults and adults age 65 and older.

Should I buy long-term care insurance?

For some, a long-term care policy is an affordable and attractive form of insurance. Buying a long-term care policy should not cause financial hardship and make you forego other financial needs. Each person should carefully examine his or her needs and resources to decide whether long-term care insurance is appropriate. It is also a good idea to discuss this purchase with your family.

What should I keep in mind when considering a long-term care insurance policy?

While there are a number of different factors that can be looked at and evaluated when deciding the best policy to buy, some of the things that should be considered are:

Long-term care insurance isn't for everyone. If you are currently receiving Social Security or expect to have minimal or no retirement savings, you will likely qualify for state aid and should not purchase long-term care insurance.
Research individual insurance companies to see whether they have a history of raising rates for long-term care coverage. Check with your state insurance department to learn how your state regulates rate increases.
Check with your financial advisor or accountant for guidance on whether long-term care insurance is appropriate for your specific financial situation. If long-term care insurance is for you, shop around for the most appropriate coverage at the best price.
Make sure you understand what a long-term care insurance policy covers and just as importantly, what it doesn't. Ask questions and make sure the company is reputable and licensed to sell insurance in your state. If you have concerns about a company, contact the State of Missouri Consumer Insurance Hotline, 1-800-726-7390.
Pre-existing conditions, conditions that you have before you apply for the insurance coverage, may be excluded from coverage. In addition, for some policies, age 60 is a trigger for a rate increase. Thus, it may be beneficial to purchase your policy before your late 50's.
Don't rely on Medicare or Medicaid to cover your long-term care needs. Medicare will usually pay for a small percentage of nursing home costs. Medicaid pays for long-term care services but only if you meet federal poverty guidelines, and the choice of care facilities can be very limited.
Keep in mind that tax breaks are available for qualified long-term care insurance policy premiums. The benefit payments received under such policies are tax-free.
Do not divulge personal financial or medical information over the phone, such as your social security number, your health status, your Medicare status or your private insurance coverage. Don’t be fooled by mailings about long-term care insurance that appear to be from an official government source. If you are concerned that someone is trying to trick you, contact your state insurance department.
Be wary of advertising that suggests Medicare is associated with a long-term care policy. Medicare does not endorse nor sell long-term care insurance.

What should be included in my policy?

An "outline of coverage" that clearly describes the policy's benefits, terms and limitations in detail. It is important to understand how much money the policy would pay, and how much the policyholder would be responsible for out-of-pocket.
A clear description of the elimination period. Some policies have a set number of days that must be spent in a nursing home or in claims status before the long-term care insurance coverage kicks in.
At least one year of nursing home or home healthcare coverage or both, including intermediate and custodial care.
The right to cancel the policy for any reason within 30 days of purchase and receive a full premium refund.
A guarantee that the policy cannot be canceled or terminated because of the policyholder’s age or physical or mental health condition.
Consider an inflation protection option that periodically increases the benefit level without the need for the policyholder to provide evidence of insurability.

If I buy a long-term care insurance policy, can the company increase the policy's premium before I need it?

There have been a number of measures taken to discourage long-term care insurance companies from under-pricing long-term care insurance policies. One of those new requirements is for companies to disclose to prospective buyers their history of premium increases. This is one of the things you should look at in deciding which policy to buy. A person needs to decide what product options best suit his/her needs and select the policy designed to provide the level of protection needed. The cheapest policy is not necessarily the best policy.

Why plan now?

Long-term care services will be a major issue for the parents of baby boomers who are now in their 70’s and 80’s and who will likely face many of the issues mentioned previously. Further, baby boomers will need to plan for their own long-term care needs as well.

Key areas to consider when planning for your future:

Communicate with family and friends
Compare and understand long-term care insurance options
Decide who you can count on for help
Establish clear legal directions
Focus on your finances
Learn what your community has to offer
Make necessary home improvements
Take control of your health and personal needs
Refer to the links and resources page within this site