Navigating Long-Term Care in Vermont

Vermont does not participate in the federal long-term care partnership program; however, several insurance options with consumer protections are available. Plus, quality care providers are available throughout the state.

There are a variety of quality care options available throughout Vermont. 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 Vermont 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 Vermont have several consumer protections in addition to federal tax benefits.

Federal Partnership Program

In 2010, the state of Vermont enacted legislation enabling the establishment of the Vermont Long-Term Care Partnership Program. This allows Vermont residents who purchase a qualified partnership policy the ability to safeguard assets in a long-term care situation. State law will require a Long-Term Care Partnership policy to meet certain requirements. These requirements are set forth in Section 1917(b)(5)(A) of the Social Security Act and in Section 7702(B) of the Internal Revenue Code, and include certain provisions of the National Association of Insurance Commissioners (NAIC) Long-Term Care Model Regulation and Model Act.

Although Vermont has approved legislation which calls for the establishment of a state partnership program and has adopted rules that reflect the Deficit Reduction Act’s requirements and the NAIC’s standards for Qualified Long-Term Care Insurance partnership policies, the state has not yet filed a state Medicaid plan amendment with the Centers for Medicare and Medicaid Services (CMS) which is required by federal law.

Policy Example

When partnership policies become available that provide the policyholder with dollar-for-dollar asset protection otherwise known as “asset-disregard”. In the event the policy benefits are exhausted you would have an equal amount of asset protection when the calculation is made to qualify for the Medicaid long-term care benefit. For example, if the policy paid $420,000 in benefits you would be able to retain that same amount and still qualify for the Vermont Medicaid (Choices for Care) program. In calculating your eligibility, the state will disregard an amount of your assets equal to the amount the partnership policy paid in long-term care benefits.

Reciprocity

Most states have reciprocity with other states' long-term-care partnership programs, however, Vermont has yet to make a determination. 

Medicaid

Long-Term Care Medicaid spend down is $2,000. A spouse’s minimum asset allowance is $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

Vermont 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 Vermont

A variety of products are approved in Vermont for Long-Term Care planning including traditional plans and asset-based “hybrid” policies.

Tax Incentives

Vermont does not offer any state tax incentive for qualified long-term care insurance. Federal tax incentives are still available.

Reverse Mortgages in Vermont

Reverse mortgages are available in Vermont. A reverse mortgage is a home equity loan where the borrower does not have to make payments.

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.

This type of mortgage can increase monthly income, eliminate mortgage payments, and even fund Long-Term Care Insurance. However, Vermont has many rules on these products, and you should seek the help of a qualified and licensed mortgage broker. 

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.}