To the editor:
Here in Massachusetts, the benefits from a long-term care insurance policy may now be fully depleted paying for in-home or assisted-living care, but the insured’s home will be protected if they later need nursing home placement.
This is the result of a state law recently passed that is good news for those trying to plan for the future. It corrects a flaw in a 1993 state law which created an incentive program to promote the purchase of long-term care insurance. That law provides that if you purchase a minimum level of long-term care insurance (currently $125 per day coverage for 2 years) and then end up in a nursing home, your house will be protected from recovery for nursing home costs paid for by the state under the Medicaid program.
As good as this law sounds, the flaw was that the state agency administering Medicaid interpreted it to mean that in order to have this protection, the minimum long-term care insurance benefits had to be in place at the time you are admitted to the nursing home. In other words, if you used any of the benefits for in-home care before you went to the nursing home, you would lose the protection.
The new law, signed by Gov. Deval Patrick in October to go into effect 90 days later, provides certainty that as long as you purchase long-term care insurance with the minimum benefits, you keep the estate recovery protection whether or not you use that insurance before you go into the nursing home. Consumers now have a less expensive and more trusted way to help pay for their own care and can use the insurance benefits if needed and still protect their homes from unexpected long-term care costs. With more people able to pay for their own care, this law should help keep down Medicaid costs.
The new law also establishes higher standards for long-term care insurance sales in Massachusetts for policies issued after Jan. 1, 2013. Developed in part by the National Association of Insurance Commissioners, with accompanying regulations to be put into place by the Massachusetts Division of Insurance, the standards provide for better oversight of long-term care insurance sales and companies and help protect the buyers. They include producer education requirements to support insurance salespersons assisting consumers with understanding the products they are purchasing. It is expected the law will help strengthen the long-term care insurance market in Massachusetts, thereby making more and better products available.
We consider this a win-win for the commonwealth, for insurers and, most of all, for elders.
Holly K. Harris
Massachusetts Chapter of
the National Academy of
Elder Law Attorneys