Navigating Long-Term Care in Pennsylvania

Pennsylvania 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 Pennsylvania. 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 Pennsylvania 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 Pennsylvania have several consumer protections in addition to federal tax benefits.

Federal Partnership Program

On July 17, 2007, Governor Edward G. Rendell signed Act 40 into law in an effort to address the growing need for long-term care services. Act 40 grants strong consumer protections for purchasers of long-term care insurance and establishes a “Long-Term Care Partnership.” This program offers Pennsylvanians the opportunity to provide for their own needs while helping to conserve taxpayer resources.

Normally individuals must spend down, or exhaust, their resources, leaving many families reliant on public assistance. People who purchase a Pennsylvania Long-Term Care Partnership Policy may still qualify for Medical Assistance after depleting their insurance benefits, without losing the asset protection the partnership policy provides.

The Commonwealth of Pennsylvania says Long-Term Care is a personal responsibility — its risk and cost should not be ignored. Medical Assistance is a safety net, but only for those truly in need. Everyone who is financially and medically qualified should begin now to save, invest, and insure for long-term care. 

Policy Example

Authorized under federal law (Deficit Reduction Act of 2005), Long-Term Care Partnership encourages Pennsylvanians to purchase Long-Term Care Insurance by providing asset coverage equal to the benefits paid by the policy. This is called dollar-for-dollar asset protection. For example, a person whose qualifying policy paid $300,000 in benefits for care would be entitled to keep $300,000 in assets if that individual needed to apply for Medical Assistance (Medicaid) after exhausting benefits in the LTC Insurance policy. This is referred to as “dollar-for-dollar asset protection.”

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 Pennsylvania. This means if you move from or to Pennsylvania your partnership asset protection follows you as well.

Medicaid

Long-Term Care Medicaid spend down is $2,400. 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, Pennsylvania 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 Pennsylvania

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

Tax Incentives

Pennsylvania does not offer any state tax incentive for qualified Long-Term Care insurance. However, federal tax incentives are still available.

Reverse Mortgages in Pennsylvania

Reverse mortgages are available in Pennsylvania. 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, Pennsylvania 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.}