NJ Elder Law Lawyers
The Qualified Long-Term Care Insurance Partnership Program
Medicaid is a federal and state health care program that provides health insurance to the blind or disabled, families with dependent children, or low-income elderly. Medicaid primarily provides assistance for long-term nursing home and home care services.
To be eligible for Medicaid in New Jersey, an applicant must meet these requirements:
- The person must be a resident of New Jersey
- The person must be a U.S. citizen or qualified alien
- The person must meet the specific standards for financial income and resources
Generally speaking, for a nursing home resident to be eligible for Medicaid benefits, he or she may have no more than $2,000 in countable assets. The spouse of the nursing home resident, who is known as the community spouse, is limited to one half of the couple's joint assets, up to $109,560 in countable assets.
A great deal of financial planning usually is required because the asset limits to qualify for Medicaid are so low; however, the New Jersey Qualified Long-Term Care Insurance Program may change the type and extent of long-term financial planning required to qualify for Medicaid.
The Qualified Long-Term Care Insurance Partnership Program took effect in New Jersey on July 1, 2008. The Partnership Program is a partnership between the state, the insurance company, and the individuals who buy long-term care insurance policies.
The Partnership Program is based on a 1987 public-private cost-sharing model proposed by the Robert Wood Johnson Foundation called the Program to Promote Long-Term Care Insurance for the Elderly.
Under the Robert Wood Johnson (RWJ) model, participants are encouraged to buy long-term care insurance when they are healthy by allowing those who later need long-term care to retain extra savings and still qualify for Medicaid to fund the costs beyond the insurance coverage.
The federal Omnibus Budget Reconciliation Act of 1994 limited the RWJ model to four states: California, Connecticut, Indiana, and New York. The Deficit Reduction Act of 2005 allowed other states to establish the RWJ model, and New Jersey took advantage of that opportunity.
Under New Jersey�??s Partnership Program, individuals who buy long-term care insurance policies that meet the requirements of the Deficit Reduction Act can apply for Medicaid under special rules for determining financial eligibility and estate recoveries.
These special rules generally permit the individuals to protect assets equal to the insurance benefits received from a long-term care insurance policy so that the assets are not taken into account when determining financial eligibility for Medicaid and will not later be subject to Medicaid liens and recoveries.
As a result, the Medicaid asset allowance for those who buy long-term care insurance is enhanced in exchange for the payment of an insurance premium. Families can be certain that a substantial amount of their savings will be protected from long-term care costs.
