Texas Long Term Care Insurance Costs & Partnership Information
Texas ranks second largest state with the most number of uninsured people so given this fact, a big percentage of the country's population receiving care is on Medicaid. According to a 2010 study on Medicaid spending, the total expenditure of Texas's Medicaid program in the said year has exceeded 27 billion dollars which is 7% of the country's overall Medicaid spending. More than 6 billion dollars of this total cost went to Long Term Care expenses specifically those that were incurred in the home care setting.
Financial experts have predicted that the state's Medicaid spending will continue to rise by billions of dollars in the next 10 years owing to the increasing population of senior Texans who will inevitably require care.
Based on the 2012 long term care study of Genworth Financial, one of the leading long term care insurance providers in the country, home health care costs in Laredo, Texas are climbing rapidly while nursing home costs in the Houston area have pushed residents beyond their budget limits.
|Region||Homemaker Services Hourly Rate
|Home Health Aide Hourly Rate
|Assisted Living Facility Monthly Rate
|Nursing Home Daily Rate
|Nursing Home Daily Rate
|Austin - Round Rock||$19||$19||$3,400||$156||$188|
|Beaumont - Port Arthur||$17||$17||$3,200||$135||$169|
|Brownsville - Harlingen||$13||$13||$2,750||$145||$194|
|College Station - Bryan||$18||$18||$3,125||$128||$160|
|Dallas - Fort Worth - Arlington||$18||$19||$3,375||$139||$175|
|Houston - Sugar Land - Baytown||$18||$18||$3,175||$151||$203|
|Killeen - Temple - Fort Hood||$17||$17||$3,550||$125||$142|
|McAllen - Edinburg - Mission||$15||$15||$3,250||$152||$216|
|Sherman - Denison||$17||$17||$3,425||$122||$143|
|Rest of State||$16||$17||$2,981||$110||$140|
Long Term Care costs vary significantly depending on the level of care needed and where you are located. Above is a table of median care costs in different settings in certain metro areas in Texas, according to Genworth Financial’s 2012 study.
Most people prefer to receive care at home. In Texas, families can expect to pay an average of $41,184 for a year of assistance from a home health aide. A home health aide provides assistance to seniors, disabled or chronically-ill individuals so that they may be able to live in their own homes.
Paying for all these services has long been a burden to many families in Texas. Many pay out-of-pocket and then apply for government assistance through Medicaid for their continued care needs once they have depleted their assets. However, the Texas Medicaid program requires an asset limit of not more than $2,000 for individuals and $3,000 for couples in order to qualify.
The Texas Long Term Care Partnership Program
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The Texas Long Term Care Partnership is a joint program of the State of Texas and private insurance companies that aims to encourage Texas residents to plan for their future Long Term Care needs. The program is participated by various government agencies. The Texas Department of Insurance establishes requirements that must be met by all insurance companies who offer policies with Partnership coverage. Medicaid eligibility (including asset disregard), on the other hand, is under a case-by-case assessment by the Texas Health and Human Services Commission (HHSC) while asset disregard for estate recovery is determined by the Texas Department of Aging and Disability Services.
Under this Partnership program, insurers may be able to market and sell policies, called Partnership policies. These policies provide an asset disregard benefit wherein policyholders can keep assets beyond the resource limit should they apply for Medicaid assistance after depleting their insurance benefits. Partnership coverage allows that every dollar paid by a Partnership policy equals a dollar of assets that will be disregarded towards eligibility to Medicaid so that policyholders do not have to spend down their assets.
Long Term Care Partnership Policy Features
A Long Term Care policy has to satisfy certain requirements in order to be regarded as a Partnership policy.
- Asset Disregard Benefit
- Inflation protection - Texas law requires Partnership policies to include inflation protection, allowing policies to keep up with increase of costs. An insurance company offering a Partnership policy is required to let Texas residents under 61 years of age choose to purchase and keep 5% compound annual inflation protection. However, they have the option to purchase inflation protection at a lower rate. Inflation protection provisions may be amended once attaining age 61 so that requirements of the next age bracket may be satisfied. Those aged 61-76 must purchase inflation protection until 76 years of age. After age 76, inflation protection is optional.
- Tax qualification - All Long Term Care insurance policies purchased before January 1, 1997 are tax-qualified. However, those purchased on or after January 1, 1997 may or may not be tax-qualified. A tax-qualified policy means you may be to deduct part of the policy premium from your taxes as a medical expense. Likewise, insurance benefits, in general, are not taxable as income. In order to qualify for tax deductions, the State of Texas requires that Long Term Care insurance premiums and medical expenses must exceed 7.5% of one’s adjusted gross income. The maximum amount of long term care premiums that can be deducted for tax year 2012 will depend on the age a policyholder has attained at the end of the tax year. See chart below.
- 40 and younger - $350
- Ages 41 to 50 - $660
- 51 to 60 - $1,310
- 61 to 70 - $3,500
- 71 and older - $4,370
- All Partnership policies are accompanied by a disclosure statement. The Notice informs the policyholder that the purchased policy is a Partnership policy. Insurance companies must also inform policyholders of the actions or changes that could result to a loss of Partnership policy status.
These figures are indexed and adjusted annually to keep pace with inflation.
You may exchange your existing Long Term Care policy for a Partnership policy provided that the private policy was purchased on or after February 8, 2006, and if your policy satisfies the requirements of a Partnership policy.
Obtaining a Partnership Policy in Texas
The State of Texas requires all insurance companies offering Partnership policies to certify that agents have completed the training requirements. Curriculum related to licensee training must be approved by the Texas Department of Insurance. You must be a resident of the State of Texas at the time of application, with the intention to remain in Texas.
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