Navigating Long-Term Care in Iowa

Planning is easier in Iowa with the availability of the Iowa Long-Term Care Partnership Program offering dollar-for-dollar asset protection when you own a qualified LTC policy. Numerous care options and insurance solutions are available.

Iowa has many quality care options are available statewide, and several insurance solutions are available to address the financial impact of future long-term care.

However, rapidly increasing costs for care services are becoming burdensome on Iowa residents and their families for those who do not have Long-Term Care Insurance.

There are a wide variety of care options available in Iowa for those who require long-term health care services, including 

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

Top insurance companies have several insurance policy options to help residents safeguard income and assets, protect lifestyles, and preserve a legacy. Plus, policyholders will have access to quality care options giving loved ones the time to be family instead of caregivers.

Federal Partnership Program

The State of Iowa participates in the federal/state partnership program which was authorized under federal law in 2005. The Iowa Long-Term Care Partnership program provides an alternative to depleting assets by forming a partnership between Medicaid and private long-term care insurers.

Consumers who purchase Long-Term Care Partnership policies may be able to qualify for Medicaid before spending down all of their assets. In what is called “dollar-for-dollar” asset protection, the state will disregard an amount equal to the amount your long-term care insurance policy paid out in benefits. This means even a smaller policy will provide outstanding asset protection. Partnership policies must meet state and federal requirements. They are only marketed by licensed insurance professionals who have completed eight hours of training required by the State of Iowa Insurance Division.

Policy Example

Look at this example. Your Iowa Long-Term Care Partnership policy pays out $285,000 in benefits when it exhausts. The state would then disregard that same amount when it calculates your eligibility for the Medicaid Long-Term Care benefit. You can design your policy to protect the appropriate amount of assets based on your individual situation. The protected assets will also be exempted from Estate Recovery in the amount equal to the benefits paid by the partnership policy.

Reciprocity

Most states have reciprocity with other states' long-term-care partnership programs including Iowa. This means if you move from or to Iowa your partnership asset protection follows you as well.

Medicaid - Iowa Total Care

Iowa Total Care is Iowa's Medicaid program that may provide long-term health care services if you have little or no income and assets. The Long-Term Care Medicaid spend down is $2,000. A spouse’s minimum asset allowance is a minimum of $27,480 up to a maximum of one-half of countable assets up to $137,400. Your spouse’s minimum monthly income allowance is $3,435. * The home equity limit is $636,000.

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

Iowa Medicaid Estate Recovery Program

Following the death of the care recipient, the deceased's assets are used to reimburse the taxpayers for the long-term health care provided through Medicaid. When a person applies for Iowa Total Care, the Medicaid program for long-term care services and supports in Iowa, they understand the state may recover assets when they pass away to reimburse the state for the cost of their long-term health care. The estate is subject to the Medicaid Estate Recovery Program, otherwise known as MERP.

The state will recover the cost of long-term care services if assets remain in the estate at the time of death. An estate includes all real and personal property (homes, land, vehicles, cash, bank accounts) held individually or jointly. All deceased assets are subject to recovery, including holdings in most trusts. The recovery includes assets that are not subject to probate. However, the state will never require a living spouse to move out of their home. 

Iowa will recover the cost of long-term care services if assets remain in the estate at the time of death. Remember, Iowa is an expanded estate recovery state meaning the state can seek assets that do not go through probate. Expanded recovery means the state can seek reimbursement through assets held by the surviving spouse, life estates, and assets in a living trust. There are some limitations in certain situations.

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

The state can place a lien on real estate. Also, it is essential to note that a penalty might be applied if there was a transfer of real or personal property without adequate consideration, meaning for less than fair market value.

Remember, Iowa Total Care, Iowa's Medicaid program, will provide long-term care services only if you have little or no income and assets. 

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. 

State Resources for Aging and Long-Term Care in Iowa

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

• Iowa Area Agencies on Aging - 800-532-3213

Area Agencies on Aging (AAA) strive to improve the quality of life of older Iowans by connecting them to services provided by the six AAA offices in the state. 

Each AAA office has case managers that assist older adults and their families find support services, accessing Iowa Total Care Medicaid coverage (if they qualify), paying for nursing home care, and researching other available programs. The AAA office may also offer transportation services for older Iowans who need help getting around the community.

• Iowa Long-Term Care Ombudsman - 515-725-3308

The Iowa Long-Term Care Ombudsman Program's mission is to protect the health, safety, welfare, and rights of individuals residing in long-term care facilities by investigating complaints, seeking resolutions to problems, and providing advocacy. The Ombudsman's goal is to enhance the quality of life and care of older Iowans.

• Iowa Senior Health Insurance Information Program (SHIIP) - 800-633-4227

SHIIP offers trained Medicare counselors that provide counseling services to help those 65 and older, and their families choose the right Medicare program. 

SHIIP is available in most Iowa counties. There is no charge for their help.

Rate Stability Rules

In addition, Iowa 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 Iowa

There are several products approved in Iowa for Long-Term Care planning. These include traditional plans, including partnership certified policies, short-duration policies, and asset-based “hybrid” plans.

Tax Incentives

Iowa permits tax deduction from net income for premiums paid for long-term care insurance coverage to the same extent allowable under federal law and to the extent not otherwise deducted in computing Adjusted Gross Income. Federal tax incentives exist as well.

Reverse Mortgages in Iowa

Reverse mortgages are available in Iowa. A reverse mortgage is a home equity loan where the borrower does not have to make payments.

This type of mortgage can increase monthly income, eliminate mortgage payments, and even fund Long-Term Care Insurance. However, Iowa has many rules on these products, and you should seek the help of a qualified and licensed mortgage broker. 

If you have significant equity in your home and you and your spouse are at least 62 years old, you can get a reverse mortgage to turn your equity into funding long-term health care, pay for an LTC Insurance policy, pay bills and add to your retirement lifestyle.

The home must be the principal residence without any tax liens. 

Learn more about reverse mortgages by clicking here.

_{*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.}