16 Del. Admin. Code § 20000-20345

Current through Register Vol. 28, No. 7, January 1, 2025

Section 20000-20345 - Qualified State Long-Term Care Insurance Partnership Program

This policy applies to Long-Term Care Insurance Partnership policies purchased on or after November 1, 2011.

1. Defining a Qualified State Long-Term Care Insurance Partnership.

The Delaware Qualified State Long-Term Care (LTC) Insurance Partnership is a partnership between States that implement a Partnership program, private insurance companies that offer long term care insurance policies and State insurance departments. The term "Qualified State Long-Term Care Insurance Partnership" means an approved State plan amendment (SPA) that provides for the disregard of any assets or resources from Medicaid estate recovery in an amount equal to the insurance benefits paid by certain LTC insurance policies, where those benefits were disregarded in determining an individual's Medicaid eligibility. The term "long-term care insurance policy" includes a certificate issued under a group insurance contract.

Purchasing or owning a Qualified State Long-Term Care Insurance Partnership policy does not guarantee Medicaid eligibility. All other financial, non-financial and medical eligibility requirements must be met.

Policies must meet specific conditions and the State Insurance Commissioner must certify that a policy meets those conditions, in order for the State to apply the disregard from estate recovery.

The long-term care partnership policy is designed to do all of the following:

a. Provide incentives for individuals to insure against the costs of providing for their long-term care needs.

b. Provide a mechanism for individuals to qualify for coverage of the cost of their long-term care needs under Medicaid without first being required to substantially exhaust their resources.

c. Reduce Medicaid expenditures by delaying or eliminating the need for Long-Term Care Medicaid.

2. Long-term care insurance policies purchased prior to November 1, 2011 are not Partnership policies.

3. Long-term care insurance policies purchased on or after November 1, 2011 may or may not be Partnership policies.

A long-term care partnership program policy means a policy that must meet all of the following requirements:

a. The policy must have been issued on or after November 1, 2011.

b. The covered individual must be a resident of a Qualified Partnership State when coverage first becomes effective. If a policy is exchanged for another policy, the residency rule applies to the issuance date of the original policy.

c. The policy must meet the definition of a "qualified long-term care insurance policy" as stated in section 7702B(b) of the Internal Revenue Code of 1986.

d. The policy must meet specific requirement of the National Association of Insurance Commissioners (NAIC) Long Term Care Insurance Model Regulations Act and Model Act.

e. The policy must include inflation protection.

i. For purchasers under 61 years of age, compound annual inflation protection.

ii. For purchasers 61 to 76 years of age, some level of inflation protection; or

iii. For purchasers 76 years of age or older, inflation protection may be offered, but is not required.

4. A Partnership policy allows for assets to be disregarded from eligibility.

The amount of the disregard is equal to the dollar amount of insurance benefits that have been paid to or on behalf of the individual.

This amount is limited to the amount paid as of the month of application, even if additional benefits are available under the terms of the policy.

5. Assets are also protected from the Medicaid Estate Recovery Program.

The amount of the assets disregarded in the eligibility process is not recoverable under the Medicaid estate recovery program.

6. Disregarded assets are counted in the Spousal Resource Assessment.

The disregarded assets are included in determining the amount of the community spouse resource allowance in a Spousal Impoverishment case.

However, the disregarded asset is not counted in determining the individual's eligibility.

7. Disregarded assets may be transferred without penalty.

If an individual becomes eligible for Medicaid through the application of a QLTCP disregard, then transfers all or part of the disregarded resources that would otherwise be considered an improper transfer, no restricted Medicaid coverage period applies. The disregarded value of the transferred resource continues to be considered part of the individual's QLTCP disregard.

If an individual becomes eligible for Medicaid through the application of a QLTCP disregard after making a transfer that would otherwise be considered an improper transfer:

a. If the individual's QLTCP disregard plus resource limit equals or exceeds the individual's countable resources plus the value of the transferred resource, no penalty period applies. The disregarded value of the transferred resource is considered part of the individual's QLTCP disregard.

b. If the individual's QLTCP disregard plus resource limit is less than the individual's countable resources plus the value of the transferred resource:

i. Determine the individual's available QLTCP disregard by adding the individual's QLTCP disregard to the individual's resource limit, then subtracting the individual's current countable resources and any amounts that have previously been transferred without a restricted Medicaid coverage period as a result of a QLTCP disregard.

ii. Subtract the individual' available QLTCP disregard from the amount that would otherwise have been considered improperly transferred. The remainder is the amount improperly transferred; a restricted Medicaid coverage period is calculated for the remainder.

8. Reciprocity with other states.

DMMA will accept partnership policies issued in other States with qualified long-term care insurance partnership programs.

9. Exhaustion of Benefits.

An individual who owns a Qualified State Long-Term Care Insurance Partnership policy can apply for Medicaid before exhausting policy benefits.

The partnership policy is treated as a third party liability and Medicaid will pay for services not covered. Medicaid will be payor of last resort.

10. Verification of the Partnership policy.

A Qualified State Long-Term Care Insurance Partnership policy must meet all relevant requirements of federal and state law. Qualified partnership policies are certified by the Delaware Department of Insurance (DOI).

16 Del. Admin. Code § 20000-20345

15 DE Reg. 1014 (01/01/12)