More on North Dakota

North Dakota, like many states, has created a program to help the problem of lack of Long Term Care Insurance coverage for the residents in North Dakota via a “partnership” program between private industry and the State. North Dakota has an aging population and awareness of the need for Long Term Care Insurance remains low. Long Term Care Insurance covers the cost of services such as nursing homes, in-home care and assisted-living care when one is unable to care for themselves and is not covered by regular health insurance and only by Medicaid if one qualifies, which can be difficult without exhausting all of your assets.

Under the program, in the State of North Dakota, “individuals who purchase long-term care insurance policies that meet certain requirements specified by the Deficit Reduction Act of 2005 (“Partnership Policies”) can apply for Medicaid under special rules for determining financial eligibility and Medicaid estate recovery. These special rules generally allow the individual to protect assets equal to the insurance benefits received from a Partnership Policy. These assets will not be taken into account when determining financial eligibility for Medicaid and will not subsequently be subject to Medicaid estate recovery.”

A recent study found that 7 in 10 Americans have made no plans for long-term care and many were not even aware of this type of insurance and what it covers. And, given that the Department of Health and Human Services estimates that 2/3 of all Americans will need long-term care at some point after they pass age 65, this does, indeed, constitute a problem to be reckoned with. Many Americans, regardless of the State in which they live, are now at risk of having to exhaust their nest egg or rely on their children or other relative to care for them in retirement should they become unable to care for themselves.

Residents of North Dakota are able to participate in the North Dakota Long Term Care Partnership Program via a number of policy options that meet certain State-mandated criteria. North Dakota, like many states, aims to reward those who do their part in solving this problem of Long Term Care Insurance coverage by planning ahead and protecting themselves and their assets. “Long-term care insurance is an important tool that helps individuals prepare for future long-term care needs. Partnership Policies provide an added level of protection by allowing individuals to protect additional assets if assistance under Medicaid is ever needed. The asset protection applies to all insurance benefits received from a Partnership Policy, regardless of whether the insurance benefits are for long-term care costs that would not be covered by Medicaid (i.e. benefits paid for assisted living).

The asset protection equals the amount of insurance benefits that have been received to date, or are due but not yet paid from a Partnership Policy, even if additional insurance benefits may be received in the future from the Policy. The asset protection does not include any refund of premium payments made because of the termination of a Partnership Policy (due to cancellation or death) since such payments do not represent insurance benefits.” Highlights and unique aspects of the North Dakota Long Term Care Insurance Partnership Program include:

• The policy must be a qualified long-term care insurance contract and meet specific consumer protection and IRS requirements. The majority of long-term care policies legally sold in North Dakota already meet this requirement.
• The policy must be issued on or after January 1, 2007. A policy issued prior to January 1, 2007 is treated as newly issued and eligible for Partnership Policy status only if it is reissued or exchanged on or after January 1, 2007. The addition of a rider, endorsement, or change in the schedule page to policies issued prior to January 1, 2007 may be treated as an exchange for the purpose of meeting the Long-Term Care Partnership Program requirements.
• The insured individual must have been a North Dakota resident when coverage first became effective under the policy.
• The policy must include the proper inflation protection.
  • If an individual was under age 61 on the date of purchase, the policy must provide compound annual inflation protection. There is no set minimum percentage level. Compound inflation protection must continue on the policy and may only end when the policy doubles, or when the insured individual reaches age 76, whichever occurs first;
  • If an individual was age 61 through 75 on the date of purchase, the policy must provide some inflation protection. There is no set minimum. Inflation protection, which can include simple interest inflation protection, must continue on the policy and may only end when the policy doubles, or when the insured individual reaches age 76, whichever occurs first; and
  • If an individual was age 76 or older as of the date of purchase, no inflation protection is required.

The “inflation” requirements are crucial here. Inflation protection insures that your policy will pay out in tomorrow’s dollars and that your covered for the care you need. You can start planning today for your future long-term care needs and securing all that you’ve worked so hard to achieve for your retirement by purchasing a Long Term Care Insurance policy. LTC Tree can assist you in finding a plan through the North Dakota Long Term Care Partnership Program that is right for you, no matter your age or financial status. If you’d like to learn more about our affordable Long Term Care Insurance policies, simply fill out this form. Thank you for reading today’s blog. We really appreciate it.