Navigating Long-Term Care in Kentucky

Kentucky participates in the national long-term care partnership program that gives those with a qualified Long-Term Care Insurance policy dollar-for-dollar asset protection. Quality care options are available statewide, and several insurance solutions are available.

While many qualified care providers are available throughout Kentucky, costs are rising due to the increasing demand. These rapidly increasing costs for care services throughout the state 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 throughout Kentucky 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

Top insurance companies have several insurance 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.

Plus, all tax-qualified Long-Term Care Insurance policies in Kentucky have several consumer protections in addition to federal tax benefits.

Federal Partnership Program

The Commonwealth of Kentucky participates in the national long-term care partnership program authorized under the federal Deficit Reduction Act of 2005. The Kentucky Long-Term Care Insurance Partnership Program is an agreement between the state government and private insurance companies to assist consumers in planning for their long-term care (LTC) needs. The program was designed to increase awareness of issues related to long-term care, to create ways to reduce Medicaid costs for nursing, home care, and to provide an incentive to consumers to purchase qualified long-term care policies to protect assets from Medicaid spend-down requirements.

These policies provide benefits for care at home or in a facility, in addition to the asset protection of the partnership program. Generally, an unmarried person would not qualify for Medicaid until he/she has assets of $2,000 or less. For example, if you have $100,000 in assets (stocks, bank accounts, etc.),

Medicaid would require you to spend $98,000 in assets before you could be eligible for benefits. However, if you have a long-term care partnership policy that paid $50,000 in benefits, Medicaid would disregard $50,000 meaning you would be required to spend $48,000 before being eligible.

Policy Example

Keep in mind that asset protection (also known as asset disregard) is based on the amount the insurance company pays in benefits, not the value of the policy or the amount of premiums you have paid. So, if your policy paid $350,000 in benefits your asset disregard is worth $350,000. The Partnership Program also protects those assets after death from Medicaid estate recovery.

Reciprocity

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

Medicaid

Long-Term Care Medicaid spend down is $2,000. A spouse’s minimum asset allowance is minimum of $26,076 up to a maximum of one-half of countable assets up to $130,380. Your spouse’s minimum monthly income allowance is $2,155. * The home equity limit is $603,000.

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

Rate Stability Rules

In addition, Kentucky 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 Kentucky

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

Tax Incentives

The Commonwealth of Kentucky also offers state tax incentives to encourage consumers to buy policies. A taxpayer may deduct from Kentucky Adjusted Gross Income any amounts paid for LTC insurance as defined in the Kentucky Code.

Reverse Mortgages in Kentucky

Reverse mortgages are available in Kentucky. 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, Kentucky 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.}