Navigating Long-Term Care in Colorado

Colorado participates in the long-term care partnership program providing owners of qualified LTC Insurance policies dollar-for-dollar asset protection from future extended health care costs. There are also tax incentives available.

Quality care options are available statewide, and several insurance solutions are available. However, rapidly increasing costs for care services throughout Colorado are becoming burdensome on residents and their families for those who do not have Long-Term Care Insurance.

The variety of quality care options available in Colorado for those who require long-term health care services include:

• adult day care centers
• assisted living facilities
• continuing care retirement communities
• home health care providers
• memory care facilities
• rehabilitation facilities
• traditional nursing homes

Several insurance solutions are available to safeguard income and assets from the high costs and burdens of aging. Plus, all tax-qualified Long-Term Care Insurance policies in Colorado have various consumer protections in addition to available tax benefits.

Federal Partnership Program

Colorado participates in the federal/state long-term care partnership program. The Colorado Long-Term Care Partnership Program is a public/private arrangement between long-term care insurers, Colorado's Medicaid program, the Division of Insurance, the Department of Human Services and the citizens of Colorado. It enables Colorado residents who purchase qualifying Long-Term Care Insurance to have more of their assets protected if they later need the state Medicaid program to help pay for their long-term care.

Policy Example

This additional asset safeguard is called dollar-for-dollar asset protection. If your Colorado Partnership Long-Term Care policy pays $450,000, for example, that same amount will be disregarded when calculating the spend-down requirements for Medicaid. The Partnership Program also protects those assets after death from Medicaid estate recovery.

Colorado is using this approach to give its citizens greater control over how they finance their long-term care and to help shore up the public safety net against upcoming demographic pressures.

Reciprocity

Most states have reciprocity with other states' long-term-care partnership programs including Colorado. This means if you move from or to Colorado your additional partnership asset protection will be honored.

Medicaid

Colorado's Medicaid program will pay for long-term health care if an individual has little or no income and assets. The Health First Colorado (Medicaid program in Colorado)  Long-Term Care Medicaid spend down is $2,000. A spouse’s minimum asset allowance is $137,400. Your spouse’s minimum monthly income allowance is $2,177.50 * The home equity limit is $955,000.

For more information about the Medicaid program visit www.medicaid.gov

Colorado Medicaid Estate Recovery Program

When a person applies for Health First Colorado (Medicaid program in Colorado) and requires long-term services and supports, their estate will be subject to the Medicaid Estate Recovery Program, otherwise known as MERP.

The Colorado Medical Assistance Estate Recovery Program is a federally mandated program that requires the state to recover the cost of care services if assets remain in the estate at the time of death. Health Management Systems is a third-party provider that performs the recovery service on behalf of the state.

Assets subject to recovery will include your home and other real estate, bank accounts, other financial assets, vehicles, cash, and even household goods. Certain assets in trusts are also subject to recovery. 

Remember, Medicaid (Health First Colorado - Medicaid in Colorado) will provide long-term care services only if you have little or no income and assets. However, the state will never require a living spouse to move out of their home. 

If the deceased does not own assets when they die, there will be nothing to recover.

The state may "look back" up to 60 months before application for Health First Colorado long-term care services to determine when income was reduced and resources were transferred.

If a person had a qualified Partnership Long-Term Care Insurance policy, the total amount of benefits paid by the policy would be sheltered from asset recovery. 

You can learn more here - Health First Colorado Recoveries | Colorado Department of Health Care Policy & Financing

State Resources for Aging and Long-Term Care in Colorado

There are a variety of state resources available in Colorado to help residents and their families with issues of aging and long-term health care. Many of these services benefit low-income families. 

• Colorado Association of Area Agencies on Aging (AAA)  - 970-264-0501

Thirteen regional AAA agencies provide comprehensive information and referrals to older Coloradans who require long-term health care services and skilled nursing home care. 

Colorado Area Agencies on Aging provides trusted sources of information, offering people a wide range of long-term support options and access to public long-term care support programs and benefits. 

Coloradans can access the Long-Term Care Ombudsman through their AAA office. The Ombudsman's office assists care recipients and their families with concerns with the day-to-day care provided in long-term care facilities, including health and safety matters. 

The regional AAA offices offer other services, including elder rights, health and nutrition information, case management, SHIP Medicare Counseling, transportation, homemaker, and chore services.

• Colorado Facility Comparison Tool - 303-692-$2,000

The Colorado Department of Public Health and Environment offers a facility comparison tool for those seeking information on long-term care facilities. You can search by facility name, type, city, or county, and you can quickly review recent state inspections and any citations that the facility has received. 

• Colorado State Health Insurance Assistance Program (SHIP) - 888-696-7213

SHIP assists Medicare enrollees in navigating the Medicare system. The agency provides free, unbiased, and individualized information. The Colorado SHIP has 17 local locations at partner agencies around the state. 

The Senior Medicare Patrol (or SMP) helps Medicare beneficiaries, their families, and caregivers to prevent, detect, and report health care fraud, errors, and abuse.

Trained staff assist seniors and their loved ones make decisions regarding long-term care services and other aspects of aging. 

• Colorado Medicaid In-Home Support Services- 800-221-3943

The Department of Health Care Policy and Financing provides options that empower Health First Colorado (Colorado's Medicaid Program) members and their families to direct and manage the long-term care services and supports they need to live at home. The idea is to delay placement in a nursing home and remain at home where most people are more comfortable. 

A case manager works with each person and their family to determine which services are required. The case manager can help hire in-home care attendants, provide backup services and ensure that a nurse supervises the attendants. Homemaker assistance, or help with housekeeping, laundry, and other household tasks, is also available.

Rate Stability Rules

In addition, Colorado consumers enjoy additional peace-of-mind as the state has adopted Long-Term Care Insurance Rate Stability Rules.  These rules, developed the National Association of Insurance Commissioners, makes it much harder for an insurance company to get an approved rate increase.

Products Approved in Colorado

A variety of affordable products are approved in Colorado for Long-Term Care planning. In addition to the traditional policies, including partnership certified policies, Colorado residents can consider limited duration policies and asset-based “hybrid” plans.

Tax Incentives

Colorado has a state income tax credit equal to the lesser of 25% of premiums paid for an LTC insurance policy, or $150 per policy. Individuals who qualify for the credit are those with federal taxable income less than $50,000 ($100,000 for joint filers claiming credit for 2 policies). The federal tax incentives also apply.

Reverse Mortgages in Colorado

In Colorado, reverse mortgages can be used in several ways that benefit families. Unlike a standard loan, you do not have to make any loan payment with a reverse mortgage. Usually, the loan does not become due until you die, sell the home, or move out.

A reverse mortgage allows a homeowner to convert a portion of their home's equity – the value of your home minus any outstanding debt on the property – into cash. This type of mortgage is one way to fund either Long-Term Care Insurance or the care itself if your need is immediate.

There are rules. You must be at least 62 years or older and live in the home as your primary residence. Plus, you must have sufficient equity in your home to qualify.

Learn more about reverse mortgages by clicking here.

LTC Tax

Colorado is one of several states that is considering following the State of Washington in implementing a tax on income for any person who does not own a qualified Long-Term Care Insurance policy.

What is unknown is if they implement the tax plan if they will offer any reasonable time for state residents to purchase qualified policies if they do not already own one. 

It is highly recommended to speak with a qualified specialist to consider your options - Work With a Specialist | LTC News

_{*The federal government sets a new minimum and maximum amounts each year, but states can set their own minimum requirements at any level between the federal limits. This information is based on the best available sources.}