Navigating Long-Term Care in New Mexico

New Mexico 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 Mexico. However, long-term health care costs are rising, especially in less populated areas of the state. 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 Mexico 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 Mexico have several consumer protections in addition to state and federal tax benefits.

Federal Partnership Program

In August of 2019 The State of New Mexico implemented the federal/state partnership long-term care insurance program that was established by the federal Deficit Reduction Act of 2005 (DRA). This gave the states the ability to set up long-term care partnership insurance policies in order for consumers to protect additional assets if they have a qualified policy in place.

The New Mexico Long-Term Care Partnership Program provides residents of the state with dollar-for-dollar asset protection when they purchase a qualified partnership qualified Long-Term Care Insurance policy.

Reciprocity

Most states have reciprocity with other states' long-term-care partnership programs including New Mexico. This means if you move from or to New Mexico 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 a minimum of $31,290 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, New Mexico 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 Mexico

A number of planning options are available. These products are approved in New Mexico for Long-Term Care planning: traditional long-term care policies, including partnership certified policies, limited-duration policies, and asset-based “hybrid” policies.

Tax Incentives

The State of New Mexico also offers state tax incentives but is limited to those taxpayers age 65 and older. Federal tax incentives are also available for all taxpayers of any age.

State Tax Credit

This allows taxpayers 65+, who are not dependents of another taxpayer, to claim a credit of $2,800 for medical care expenses. This includes LTC insurance premiums, paid for the taxpayer, spouse, or dependents if expenses equal $28,000 or more within a taxable year and if expenses are not reimbursed or otherwise compensated for.

Exemption

Taxpayers 65 and older are entitled to an exemption of $3,000 for medical care expenses, which include LTC insurance premiums if such expenses equal $28,000 or more within a taxable year and are unreimbursed or uncompensated.

Reverse Mortgages in New Mexico

Reverse mortgages are available in New Mexico. 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, New Mexico 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 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.}