Navigating Long-Term Care in Virginia

The Commonwealth of Virginia 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 Virginia. 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 Virginia 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 Virginia have several consumer protections in addition to state and federal tax benefits.

Federal Partnership Program

The Commonwealth of Virginia participates in the federal/state long-term care insurance partnership program. The program, which was authorized under federal law (Deficit Reduction Act of 2005) provides consumers with additional asset protection if they own a qualified partnership long-term care insurance policy.

Virginians are now able to purchase LTC Partnership policies. The Virginia Long-Term Care Partnership is an alliance between the private insurance industry and the Virginia state government to help Virginians afford future long-term care services without depleting all of their assets to pay for care. LTC partnership policyholders who use their LTC Partnership insurance policy benefits, and who eventually apply for Medicaid coverage, are able to maintain some level of assets (equal to the long-term care insurance benefit paid) above the $2,000 Medicaid asset limit currently in place. This way, those policyholders have an additional safeguard for their estates based on the benefits paid out by the policy.

The Partnership Program also protects those assets after death from Medicaid estate recovery.

Policy Example

For every dollar that a Virginia Partnership Long-Term Care insurance policy pays in benefits, a dollar of personal assets can be protected (disregarded) during the Medicaid eligibility spend down. For example, if your Virginia Partnership Long-Term Care Insurance policy paid $425,000 in benefits that same amount would be disregarded in the calculation for Medicaid’s Long-Term Care benefit. You would be able to keep, in this example, $425,000, plus the normal allowance and still qualify for Medicaid. 

Reciprocity

Most states have reciprocity with other states' long-term-care partnership programs including Virginia. This means if you move from or to Virginia 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 $2,155 * The home equity limit is $603,000.

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

Rate Stability Rules

In addition, Virginia 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 Virginia

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

Tax Incentives

Virginia offers a state tax deduction for long-term care insurance. The amount paid annually in LTC insurance premiums may be deducted from federal adjusted gross income in computing Virginia taxable income. The deduction is only allowed if the individual did not claim a deduction for these premiums for federal income tax purposes.

Reverse Mortgages in Virginia

Reverse mortgages are available in Virginia. 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 Virginia 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.}