Long-Term Care Insurance for the Community Spouse

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Disclaimer: With Medicaid, VA, and insurance regulations frequently changing, past blog posts may not be presently accurate or relevant. Please contact our office for information on current planning strategies, tips, and how-to's.

During the process of qualifying an institutionalized spouse for Medicaid benefits, a community spouse learns very quickly that everything can be protected for his or her benefit, including the family home, automobile, furniture and personal property, a prepaid and irrevocable funeral home plan, and up to $119,220 of cash or other assets for his or her Community Spouse Resource Allowance (“CSRA”).

If assets were required to be spent-down to get below the CSRA, they could be invested into a Medicaid Compliant Annuity, also for his or her benefit. This strategy quickly achieves Medicaid benefits for the institutionalized spouse, while allowing the community spouse to maintain his or her lifestyle in the community.

So, what happens if the community spouse needs long-term care in the future? If it involves home health care or an assisted living facility, he or she will have no choice but to pay the private rate costs. And, even over the shortest periods of time, both levels of care can be very expensive. If the community spouse is afraid that the costs are too high and foregoes this care, it is likely that the next transition will be to a skilled nursing facility, where the care is even more expensive. If he or she then decides that the best thing to do is qualify for Medicaid, this individual will quickly learn that in order to become eligible, one can only retain up to $2,000 of cash or other assets. Thus, the spouse that once was able to save the majority of his or her assets will be forced to spend down to a nominal level.

If the community spouse was less than 79 years of age when the institutionalized spouse qualified for Medicaid benefits, the CS could have purchased a traditional long-term care insurance policy from National Guardian Life Insurance Company (“NGL”). The NGL policy offers: (1) all levels of care – home health, assisted living, and nursing care, (2) sufficient coverage – 2 years, 3 years, with extensions, or lifetime (3) premium options – single pay, 10-pay, or lifetime, (4) inflationary increases, and a (5) return of premium rider – with or without claims. The policy would serve a community spouse well should he or she need long-term care in the future. This option provides protection from future crisis Medicaid planning at a reasonable cost, while also providing peace of mind for the entire family.