Navigating Long-Term Care in North Carolina

North Carolina 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 North Carolina. 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 North Carolina 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 North Carolina have several consumer protections in addition to federal tax benefits.

Federal Partnership Program

The State of North Carolina participates in the federal/state long-term care partnership program that was authorized under the federal Deficit Reduction Act of 2005. In 2010, North Carolina legislators authorized the establishment of the North Carolina Long-Term Care Partnership (LTCP) Program.

A North Carolina Long-Term Care Partnership policy provides the consumer with additional “dollar-for-dollar asset protection” or what is referred to as “asset disregard”. This means that an amount of your resources equal to the dollar amount of long-term care insurance benefits paid to you, or on your behalf, under the policy may be disregarded for purposes of determining eligibility for long-term care Medicaid and from any subsequent estate recovery for payment of Medicaid services.

The amount that may be disregarded at eligibility will be equal to the amount of the long-term care partnership benefits paid out prior to the time you apply for long-term care Medicaid. As a result, you may qualify to have Medicaid-paid services without first being required to substantially exhaust your personal resources. The amount that may be protected from estate recovery will be equal to the amount disregarded for purposes of eligibility for Medicaid’s LTC benefits.

Policy Example

If your North Carolina Partnership Long-Term Care policy paid $485,000 in benefits you would have $485,000 in asset disregard when calculating your eligibility for the Medicaid Long-Term Care benefit. This will allow you to shelter that amount, in addition to the normal allowance. 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 North Carolina. This means if you move from or to North Carolina 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 $2,178. * The home equity limit is $603,000.

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

Rate Stability Rules

In addition, North Carolina 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 North Carolina

There are several products approved in North Carolina for Long-Term Care planning. These include traditional plans, including partnership certified policies, short-duration policies, and asset-based “hybrid” policies.

Tax Incentives

There are no state tax incentives available in North Carolina at this time. Federal tax incentives are available.

LTC Tax

North Carolina is one of several states that is considering following the State of Washington in implementing a tax on income for any person who does not own a qualified Long-Term Care Insurance policy.

What is unknown is if they implement the tax plan if they will offer any reasonable time for state residents to purchase qualified policies if they do not already own one. 

It is highly recommended to speak with a qualified specialist to consider your options - Work With a Specialist | LTC News

Reverse Mortgages in North Carolina

Reverse mortgages are available in North Carolina. 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, there are many rules in North Carolina 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.}