Navigating Long-Term Care in Maryland

Maryland 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.

There are a variety of quality care options available throughout Maryland. 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 Maryland 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 Maryland have several consumer protections in addition to state and federal tax benefits.

Federal Partnership Program

The State of Maryland participates in the federal long-term care partnership program as authorized by the Deficit Reduction Act of 2005 which was signed into law by President George W. Bush. The Maryland Long-Term Care Insurance Partnership Program is an innovative partnership between Maryland and private insurance companies who issue long-term care insurance policies.  

A policy sold under the Long-Term Care Insurance Partnership Program, by law, must meet the same standards as a long-term care policy not sold under the program. In addition, a partnership policy must meet certain specific federal and state requirements, and be certified as a “long-term care partnership policy” by the Commissioner of the MIA.

Partnership policies provide an additional level of protection when compared to regular long-term care insurance policies. Partnership policies permit individuals to protect additional assets from spend-down requirements under Maryland’s Medicaid program if those individuals ever need and qualify for assistance under the program.

If you received $200,000 of insurance benefits from your Partnership Policy at the time of application for Medicaid, you generally would be able to retain $200,000 in assets above and beyond the amount normally permitted for Medicaid eligibility. The Partnership Program also protects those assets after death from Medicaid estate recovery.

Policy Example

The asset eligibility and recovery provisions of Maryland’s Medicaid program are mitigated in these policies, so when qualifying for Medicaid, additional assets equaling the amount of insurance benefit received from the Partnership Policy can be disregard. For example, if you received $200,000 of insurance benefits from your Partnership Policy at the time of application for Medicaid, you generally would be able to retain $200,000 in assets above and beyond the amount normally permitted for Medicaid eligibility. 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 Maryland. This means if you move from or to Maryland your partnership asset protection follows you as well.

Medicaid

Long-Term Care Medicaid spend down is $2,500. 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, Maryland 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 Maryland

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

Tax Incentives

In Maryland, there is a tax credit available if you have a qualified long-term care insurance policy. A credit is allowed against the state income tax for employers providing LTC insurance up to an amount equal to 5% of the costs incurred by the employer during the taxable year for providing LTC insurance as part of an employee benefits package. The credit may not exceed $5,000 or $100 for each employee covered.

Individuals also have a state tax credit. A one-time credit is allowed per individual against the state income tax in an amount equal to 100% of the eligible federally qualified LTC insurance premiums covering the individual, spouse, parent, step-parent, child, or step-child, not to exceed $500.  Federal tax incentives are also available.

Reverse Mortgages in Maryland

Reverse mortgages are available in Maryland. 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, Maryland 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.}