New Jersey Long Term Care Insurance Costs & Partnership Information
According to Genworth Financial's 2012 Cost of Care study, New Jersey ranks as the most expensive state for assisted living facilities with residents paying more or less $5,713 a month or $68,556 a year. It also ranks fourth on the list of states with most expensive nursing facilities in the country. On the lighter side, New Jersey is one of the few states with the lowest expenditures for home health services provided by a Medicare-certified home aide. In fact, hourly rates in southern New Jersey have decreased by 6% annually in the last five years. Below are the current expenditures for various long term care settings across the state.
|Region||Homemaker Services Hourly Rate
|Home Health Aide Hourly Rate
|Assisted Living Facility Monthly Rate
|Nursing Home Daily Rate
|Nursing Home Daily Rate
|Atlantic City - Hammonton||$18||$20||$4,223||$250||$270|
|Trenton - Ewing||$21||$23||$6,000||$275||$308|
|Vineland - Millville - Bridgeton||$18||$21||$3,265||$278||$300|
|Rest of State||n/a||n/a||n/a||n/a||n/a|
It is important for residents to understand these various long term care settings in order to select the best care setting based on their needs. Another critical factor to consider is the costs, and how they will be paid. Public-funded programs may provide assistance but to a limited extent. One way is through private pay or self-pay. However, with the rising costs of long term care, assets and savings are easily depleted and may leave a permanent financial burden to many care giving families.
One may turn to Medicaid to help pay for care needs but must not go beyond the asset limit set by Medicaid in order to qualify for assistance. Seniors and individuals who are blind or permanently disabled are allowed up to $2,000 (or $4,000 if applicant is married) in assets to qualify for assistance in their long term care expenses, provided all other eligibility requirements are met.
To address the long term care needs of the people of New Jersey and enable them to keep assets and live dignified, independent lives, the State has partnered with private insurers and a Partnership program was created.
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New Jersey Long Term Care Partnership
The federal Deficit Reduction Act of 2005 made changes to the federal Medicaid program and enabled other states (pilot states were NY, CA, IN, CT) to establish long term care partnership programs upon approval of a state plan amendment submitted to the Centers for Medicare and Medicaid Services or CMS. In New Jersey, the partnership is known as the New Jersey Long-Term Care Insurance Partnership Program or simply "Partnership Program".
It was approved by CMS on February 12, 2008 with effective date of July 1, 2008. The program is administered by the New Jersey Department of Human Services in collaboration with the New Jersey Department of Banking and Insurance. It is a partnership between the state government and the private insurance industry to address long term care needs of th people of New Jersey.
By purchasing qualified policies from insurance companies participating in the Program, policyholders are allowed to keep assets beyond what is generally allowed during determination of Medicaid eligibility. This asset disregard benefit enables the policyholder to protect assets equal to the insurance benefit amount paid by the Partnership policy. The assets are also protected from Medicaid estate recoveries when the policyholder dies.
Long Term Care Partnership Insurance Policies
A "Partnership policy" allows disregard of a policyholder's assets during Medicaid eligibility process should the policyholder require continued coverage after exhausting benefits of their qualified insurance policy. The amount of assets disregarded is equal to the amount of insurance benefits paid by their qualified policy. Therefore, policyholders are not forced to spend down their assets to satisfy Medicaid's income and asset limits, allowing New Jerseyns to retain their resources and life's savings.
To be considered as a Partnership policy, Long Term Care insurance policies must include the following features, as outlined in Bulletin No. 06-010 of the New Jersey Division of Insurance dated December 6, 2006:
- Product name displayed prominently and must include the word "Partnership"
- First page of the policy contains issue date, prominently displayed
- A statement certifying that the policy meets the definitions of a "qualified Long Term Care insurance" policy as outlined in section 7702B(b) of the Internal Revenue Code. The statement must be made by an officer of the insurance company.
- A statement certifying that reports will be made regularly to the Secretary of Health and Human Services. The statement must again be made by an officer of the insurance company and must include a notification when benefits are paid, and the payment amount; a notification as to when the policy terminates; and other information that may be required by the Secretary of Health and Human Services.
- A statement that the policy includes inflation protection. This feature provides protection against inflation. Policies are required to include compound inflation protection for individuals below age 61 whereas some type of inflation protection must be included in policies issued to individuals aged 61-75. Inflation protection is not required for individuals aged 76 and above.
- A statement certifying that the partnership policy will be marketed only by approved agents who underwent Partnership training.
- A list of agents approved to offer and market Partnership policies for the company.
Proposed amendments to New Jersey's Long Term Care Insurance Rules outlined in N.J.A.C. 11:4-34 are being drafted to facilitate implementation of the Partnership Program in New Jersey. One of the proposals is Partnership Disclosure, such that Partnership policies must be accompanied by a Notice of Long Term Care Partnership Status (Appendix 2). This indicates that the policy is a Partnership Policy, and outlines the benefits under the policy.
Obtaining a Partnership Policy in New Jersey
Insurance companies offering Partnership policies must file and obtain approval from the New Jersey Division of Insurance before marketing the policies. The New Jersey Administrative Code (NAC) 687B.075 requires insurance companies to state if a Long Term Care policy is a qualified Partnership policy or not.
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