Navigating Long-Term Care in Tennessee

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

Federal Partnership Program

The State of Tennessee is a participant in the federal/state long-term care partnership program. The program, which was authorized by an Act of Congress and signed into law by President Bush in 2005, allows states to provide additional asset protection for those who purchase qualified long-term care insurance policies.

The Tennessee Long-Term Care Partnership Program is an agreement between the state government and private insurance companies to assist individuals in planning for their long-term care needs. Insurance companies voluntarily agree to participate in the Tennessee Partnership Program by offering long-term care insurance coverage that meets certain state and federal requirements.

Long-Term Care insurance policies that qualify as partnership policies may protect the policyholder’s assets through a feature known as “Asset Disregard” under TennCare, Tennessee’s Medicaid program. “Asset Disregard” means that an amount of the policyholder’s assets equal to the amount of long-term care insurance benefits received under a qualified Partnership policy will be disregarded for the purpose of determining the insured’s eligibility for Medicaid. This generally allows a person to keep assets equal to the insurance benefits received without affecting the person’s eligibility for Medicaid.

Policy Example

If your Tennessee Partnership Long-Term Care Insurance policy paid $325,000 in benefits and you still require care the state will disregard that same amount in calculating your eligibility for the Medicaid Long-Term Care benefit. You would be able to keep that amount, in addition to the amount normally allowed and still qualify for Medicaid’s Long-Term Care 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 Tennessee. This means if you move from or to Tennessee your partnership asset protection follows you as well.

Medicaid - TennCare

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 $603,000.

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

Rate Stability Rules

In addition, Tennessee 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 Tennessee

A variety of products are approved in Tennessee for Long-Term Care planning. This includes the traditional plans, including partnership certified policies, short-duration policies, and asset-based “hybrid” policies.

Tax Incentives

Tennessee does not offer any state tax incentive for qualified long-term care insurance; however, federal tax incentives are still available.

Reverse Mortgages in Tennessee

Reverse mortgages are available in Tennessee. 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, Tennessee 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.}