Navigating Long-Term Care in Louisiana

Louisiana participates in the Long-Term Care Insurance Partnership program helping residents protect their hard-earned assets from the future costs of long-term health care. Owners of qualified LTC Insurance can enjoy dollar-for-dollar asset protection. 

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

There are a wide variety of care options available in Louisiana 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

Federal Partnership Program

The State of Louisiana has joined most states in the federal/state long-term care partnership program to help its residents protect their hard-earned assets from the high costs of long-term health care.

The program, approved by state law and authorized by the federal Deficit Reduction Act (DRA) of 2005, offers individuals a way to protect their assets in the event they exhaust the benefits in their qualified long-term care insurance policy. This allows the person to access long-term care Medicaid services without the normal spend-down requirements. The initiative encourages citizens to partner with the state-based program as they purchase qualified private long-term care insurance policies.

Policy Example

The Louisiana Long-Term Care Partnership Program provides asset disregard equal to the total amount of benefits paid by your LTC insurance policy. For example, if your policy paid $275,000 in benefits, the state will disregard that amount from the required spend-down. A single person must spend-down to $$2,000 in total assets to normally qualify for Medicaid’s long-term care benefits. If the person had $300,000 in assets, they would have to spend $298,000. However, if that person’s policy paid $275,000 before it was exhausted and the individual still needed long-term care, the state would ignore that $275,000. The spend-down would only be $23,000 (300,000- 277,000 [275,000 paid in benefits, + the $2,000 Medicaid allows]). This protects your estate from total spend-down. 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 Louisiana. This means if you move from or to Louisiana your partnership asset protection follows you as well.

Medicaid

The Louisiana Medicaid program will pay for long-term health care if an individual has little or no income and assets. The 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 $3,435. * The home equity limit is $636,000.

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

Louisiana Medicaid Estate Recovery Program

When individuals apply for Medicaid in Louisiana and require long-term services and supports, their estate will be subject to the Medicaid Estate Recovery Program, otherwise known as MERP. When a Medicaid recipient dies, the state can recover the money spent on their long-term health care.

Under the Louisiana Estate Recovery Program, the assets subject to recovery will include your home and other real estate, bank accounts, other financial assets, vehicles, cash, and even household goods. All deceased assets are subject to recovery, including holdings in most trusts.

Remember, Medicaid 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. 

The state has a broad estate recovery program that relies heavily on recording a lien upon any real property the care recipient has an ownership interest. The purpose of the lien is to recover the cost of Medicaid benefits provided after the individual's death upon the property or transfer of the property.

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.

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 Louisiana

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

• Area Agency on Aging (AAA) - phone numbers vary

Area Agencies on Aging provide older Louisianians access to various services to help them remain in their home as they age. These services include access to transportation, meal delivery, in-home health care assistance, home modifications, and many other services.

Find the closest AAA office here - Area Agencies on Aging Directory - Governor's Office of Elderly Affairs | State of Louisiana.

• Louisiana Department of Health – Office of Aging and Adult Services - 225-342-9500

The Office of Aging and Adult Services helps older Louisianians remain in their homes and in the community. This agency will help Medicaid qualified individuals with nursing and skilled therapy assessments and services, in-home monitoring systems, home modifications and assistive technologies, personal care, home-delivered meals, monitored in-home caregiving, caregiver respite, and adult day care services.

• Louisiana Options in Long-Term Care - 877-456-1146

Older people seeking help with applying for Medicaid and nursing home placement can contact the Louisiana Options in Long-Term Care helpline for assistance. 

This program can provide information and application assistance for those who immediately qualify for Medicaid and those who may be eligible under the Medically Needy expansion. 

• Senior Health Insurance Information Program (SHIIP) - 800-259-5300

The Senior Health Insurance Information Program (SHIIP) helps Medicare beneficiaries and families better understand Medicare coverage options and benefits. Counselors will help older Louisianians make informed decisions by providing free and unbiased guidance via telephone or face-to-face interactive sessions. 

 Rate Stability Rules

In addition, Louisiana 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 Louisiana

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

Tax Incentives

Louisiana used to have a state tax incentive for Long-Term Care Insurance. However, this tax is no longer in effect. Federal tax incentives remain, plus pre-tax money from a Health Savings Account can still be used to pay for quaified Long-Term Care Insurance premiums.

Reverse Mortgages in Louisiana

Reverse mortgages are available in Louisiana. 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, Louisiana 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.}