Navigating Long-Term Care in Maine

Maine participates in the long-term care partnership program providing dollar-for-dollar asset protection. Owners of a qualified LTC Insurance policy can safeguard assets in addition to accessing quality care options. 

There are a variety of quality care options available throughout the state of Maine. However, long-term health care costs are rising. 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 Maine 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 Maine have several consumer protections in addition to state and federal tax benefits.

Federal Partnership Program

The State of Maine participates in the federal/state long-term care partnership program. The program, which was authorized by federal law in 2005, provides additional asset protection for individuals with a qualified partnership long-term care insurance policy.

The program intended to encourage the people of Maine to purchase Long-Term Care insurance rather than rely exclusively on their assets and then on Medicaid once their assets are exhausted. People who buy a Maine Long-Term Care Partnership policy have their assets protected from Medicaid eligibility requirements and Medicaid’s estate recovery equal to the amount of insurance benefits paid out. This is a dollar-for-dollar offset.

Policy Example

For example, if you receive $200,000 in insurance benefits from your Maine Long-Term Care Partnership policy, you will be able to retain $200,000 in assets above the specified amount of assets normally permitted for Medicaid eligibility. The $200,000 is also exempt from estate recovery.

Reciprocity

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

Medicaid

Long-Term Care Medicaid spend down is $10,000. A spouse’s minimum asset allowance is $130,380. Your spouse’s minimum monthly income allowance is $2,382. * The home equity limit is $906,000.

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

Rate Stability Rules

In addition, Maine 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 Maine

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

Tax Incentives

Maine allows for the deduction of full premium less any amount deducted for federal income tax purposes and by any long-term care insurance premiums claimed as an itemized deduction pursuant to Maine Rev. Stat. tit. 36 section 5125. Employers providing long-term care benefits to employees may qualify for a tax credit equal to the lowest of the following: 1) $5,000, 2) 20% of the taxpayer’s costs to provide the benefit, or 3) $100 for each employee covered by an employer-paid policy.

Tax Credit

An employer providing long-term care benefits to its employees may qualify for the tax credit.

A credit is allowed against the tax imposed for each taxable year equal to the lowest of the following: (A) $5,000; (B) 20% of the costs incurred by the taxpayer in providing LTC insurance policy coverage as part of the benefit package; or (C) $100 for each employee covered by an employer-provided LTC insurance policy.

Deduction

A taxpayer is entitled to a state tax deduction for qualified LTC insurance premiums as long as the amount deducted is reduced by any amount deducted for federal income tax purposes and by any LTC insurance premiums claimed as an itemized deduction pursuant to Maine Rev. Stat. tit. 36 section 5125.

Reverse Mortgages in Maine

Reverse mortgages are available in Maine. 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, Maine 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.}