Navigating Long-Term Care in New Jersey

New Jersey 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 New Jersey. 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 New Jersey 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 New Jersey have several consumer protections in addition to state and federal tax benefits.

Federal Partnership Program

The State of New Jersey is a participant in the federal/state long-term care insurance program. Established according to guidelines under federal law, the program provides additional asset protection to those who purchase a qualified partnership long-term care insurance.

The idea is to stimulate the development of an expanded private long-term care insurance market in the state, which would relieve financial pressure on the Medicaid programs associated with funding long-term care. For consumers, it protects many who would otherwise deplete their life savings paying for long-term care before being eligible to qualify for Medicaid coverage for their long-term care costs.

The State of New Jersey feels it is in the public interest to provide statutory authorization for a long-term care partnership program in accordance with the provisions of the federal “Deficit Reduction Act of 2005,” Pub.L.109-171. Qualified New Jersey Partnership Long-Term Care Insurance provides disregard of certain assets with respect to Medicaid eligibility for persons who purchase and receive benefits from a policy that meets the requirements of federal law.

This is known as “dollar-for-dollar” asset protection. It allows an individual to keep assets in the amount equal to the long-term care benefits paid and not be subjected to spend-down requirements.

Policy Example

If your New Jersey Partnership Long-Term Care insurance policy paid $650,000 in benefits you would be able to shelter that same amount when they calculate your eligibility for the Medicaid Long-Term Care benefit. You would, in this example, be able to preserve the $650,000 in addition to the normal allowance and still qualify for the Medicaid benefit. 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 New Jersey. This means if you move from or to New Jersey 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 $906,000.

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

Rate Stability Rules

In addition, New Jersey 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 New Jersey

Several products are approved in New Jersey for Long-Term Care Planning. These include traditional plans, in addition to partnership qualified policies, and asset-based “hybrid” policies.

Tax Incentives

New Jersey also offers a state tax incentive for those who own a qualified long-term care insurance policy. The law allows a deduction for medical expenses (including LTC insurance premiums for taxpayers, their spouses or dependents) to the extent such expenses exceed 2% of taxpayer’s gross income. Federal tax incentives are also available.

Reverse Mortgages in New Jersey

Reverse mortgages are available in New Jersey. A reverse mortgage is a type of 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, there are many rules in New Jersey on these products, and you should seek the help of a qualified and licensed mortgage broker. 

Several qualifications must be met before anyone can be approved for a Reverse Mortgage in New Jersey. You must be at least 62 years of age. You must also have a home paid in full or have substantial equity in your home. 

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.}