Navigating Long-Term Care in Minnesota

Minnesota participates in the federal/state long-term care partnership program, offering those with a qualified LTC 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 Minnesota. 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 Minnesota 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 Minnesota have several consumer protections in addition to state and federal tax benefits.

Federal Partnership Program

Minnesota participates in the federal/state long-term care partnership program. The Minnesota Long-Term Care Partnership is a public/private arrangement between long-term care insurers and Minnesota’s Medical Assistance program. It enables Minnesota residents who purchase certain long-term care insurance policies to have more of their assets protected if they later need the state to help pay for their long-term care expenses. Minnesota is using this approach to give persons greater control over how they finance their long-term care and to help shore up the public safety net against coming demographic pressures.

This program, authorized by federal law, provides a policy owner dollar-for-dollar asset protection in the event they exhaust benefits and need to access Medicaid Long-Term Care Benefits.

A Minnesota Long-Term Care Partnership policy allows a person to protect assets beyond the $3,000 amount an individual usually must spend-down in assets. Under the Minnesota Long-Term Care (LTC) Partnership, a person who buys and uses a policy to pay for LTC is able to protect their assets if they later need to apply for Medicaid which is known as Medical Assistance in Minnesota. Assets protected under a Long-Term Care Partnership policy are protected from estate recovery.

Policy Example

If your Minnesota Partnership Long-Term Care policy pays $350,000, for example, that same amount will be disregarded when calculating the spend-down requirements for Medical Assistance. So, this individual could protect $350,000, plus the $$3,000 normally allowed and still access Medical Assistance.

Medicaid

Long-Term Care Medicaid spend down is $3,000. A spouse’s minimum asset allowance is $33,851. Your spouse’s minimum monthly income allowance is $2,057.50 * The home equity limit is $603,000.

Reciprocity

Most states have reciprocity with other states' long-term-care partnership programs including Minnesota. This means if you move from or to Minnesota your additional partnership asset protection will be honored.

Rate Stability Rules

In addition, Minnesota 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 Minnesota

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

Tax Incentives

Minnesota has a state income tax credit equal for qualified long-term care insurance policies. You may claim this tax credit if you purchase long-term care insurance for yourself or your spouse. To be eligible for the Minnesota Long-Term Care Insurance Credit, both of the following must be true: The policy you purchased qualifies as a federal deduction (disregarding the 7.5 or 10 percent income test).  For more information, view IRS Publication 502, Medical and Dental Expenses. The policy has a lifetime benefit limit of $100,000 or more. The credit amount is equal to 25 percent of the policy premium(s), up to $100 per beneficiary. For married couples, one policy covering both spouses will be eligible for the $200 maximum credit; separate policies or premiums are not required.

Federal tax incentives also apply.

Reverse Mortgages in Minnesota

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

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.

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

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.}