For Immediate Release: July 14, 2010
Contacts: Kristin Milam (NCDOI): 919-733-5238
Renee McCoy (NCDHHS): 919-733-9190
Long-term Care Partnership Legislation Signed by Governor Perdue
New legislation could save the state millions and will protect seniors' assets
RALEIGH -- Insurance Commissioner Wayne Goodwin and DHHS Secretary Lanier Cansler today announced that Senate Bill 1193 has been signed by Governor Bev Perdue on Sunday. This legislation implements a long-term care partnership designed to encourage aging North Carolinians to purchase long-term care insurance while providing important consumer protections. The Partnership goes into effect Jan. 1, 2011.
Since North Carolina's aging baby boomer generation represent the largest segment of the population, Gov. Perdue joined Commissioner Goodwin and Secretary Cansler in support of provisions that will protect citizens who invest in long-term care insurance. The bill gives consumers the option to exempt a portion of their assets from Medicaid spend down requirements while protecting the same amount at estate recovery. The program also requires that policy benefits increase over time as protection against inflation.
"Especially in today's economy, our aging citizens are looking for protections and economic stability for their futures," said Gov. Perdue. "This new partnership helps ensure the policies they purchase will pay off in the long run."
"The Partnership arrangement encourages folks to plan for their future long-term care expenses with the security of knowing if they exhaust their private insurance there will still be some help available," said Commissioner Goodwin.
"Now is clearly the time for the Long-Term Care Partnership program and other efforts to help lessen future Medicaid expenses associated with the high and growing costs of long term care," Secretary Cansler said.
This is how the Partnership works: a private Partnership's policy pays for services such as in-home care, community-based services or nursing home care. When the Partnership policy's insurance benefits are used, Medicaid disregards the exact dollar amount paid by the insurance company when determining qualification of long-term care Medicaid benefits. Medicaid does not recover this money even after the insured's death.
For example, if your Partnership policy is $200,000, and you use that amount of benefits but still need care, you can apply for Medicaid coverage. In your application, $200,000 of your personal assets - such as savings, family-owned businesses or farms - would be exempted. Further, Medicaid would not recover that $200,000 from your estate's resources after you die.
"The bottom line is that this Partnership program will allow our citizens to keep more of what they've earned and saved over the course of their lives, and still be able to meet Medicaid eligibility requirements," added Insurance Commissioner Goodwin.
"With the aging of more than 2.3 million baby boomers, North Carolina is joining the ranks of states offering this public-private approach to encouraging individuals and families to plan for and manage the costs of long-term care through the purchase of private long-term care insurance that also offers some protection of their assets," said Secretary Lanier Cansler.
North Carolina joins 33 other states who have implemented long-term care partnership programs, and many states with similar laws have documented savings of millions of dollars in Medicaid spending and seen delays in Medicaid enrollment. In 2007 Connecticut estimated that its Partnership program had saved $5.5 million in Medicaid benefits; likewise, California estimated over $16 million as of Sept. 30, 2008.