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Old 02-13-2018, 04:11 PM
 
Location: Ypsilanti, MI
2,487 posts, read 3,701,308 times
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Potentially a beneficial wrinkle for consumers.


I received a letter today from John Hancock, the underwriter for our LTC policies. Michigan has a new arrangement with LTC Insurance Companies that will exclude part of the assets that must be surrendered by the policy owners IF they ever need to apply for Medicaid for Long Term Care costs.


The special provisions applies to any Insurance Company which registers as a Partner with the State of Michigan for LTC costs. Other states have similar arrangements. The policy owner must have lived in Michigan when the policy was initiated. The policy must contain an Inflation Adjustment Provision. The policy owner must live in Michigan or other Partner state when exclusion is requested.


The total value of the excluded assets will be equal to the value of the LTC benefits paid by the Insurance Company. Homes with a market value exceeding $500K may face slightly different rules.


And as John Hancock honestly admitted in the letter I received, simply having a Long Term Care Policy will likely eliminate the future need to ever file for Medicaid thus making this special provision a nicety that may never actually provide any benefits to the Policy Owner.


But no added cost to us, and it may protect some of our estate/assets in the future. Although it may impact any future retirement relocation decisions too.

Last edited by MI-Roger; 02-13-2018 at 04:40 PM..
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Old 02-13-2018, 04:17 PM
 
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we have a ny partnership that protects assets 100% as well as income for the stay at home spouse . this is our 4th year with the partnership plan . only 2 states do 100% asset protection .
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Old 02-13-2018, 04:22 PM
 
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What does that mean 'a NY partnership plan'?
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Old 02-13-2018, 04:28 PM
 
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If you do a search here youíll find many posts on the subject itís called a partnership plan .
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Old 02-13-2018, 04:32 PM
 
10,604 posts, read 14,294,329 times
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Quote:
Originally Posted by matisse12 View Post
What does that mean 'a NY partnership plan'?
In brief - it means whatever your insurance company has spent on your care, you can keep dollar for dollar in your estate and still go on Medicaid. Dollar for dollar except in two states that protect all of it.

So when you sign up for long-term care Ins., you could sign up for whatever “pool of money” equal to the value Of your estate if you want to protect it .

The government wants to incentivize people to buy insurance and the benefit besides the obvious is that you can get in much better places quickly with insurance then if you go directly on Medicaid .

And of course you can buy a plan for any amount of money you want it doesn’t have to eat all your assets.

It takes a minute to wrap your head around why they would do that but it makes sense.
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Old 02-13-2018, 04:36 PM
 
Location: Ypsilanti, MI
2,487 posts, read 3,701,308 times
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Quote:
Originally Posted by mathjak107 View Post
we have a ny partnership that protects assets 100% as well as income for the stay at home spouse . this is our 4th year with the partnership plan . only 2 states do 100% asset protection .

Yes, NY State offers a number of unique benefits for their residents. But the Income Tax Rate in NY is much higher than here in Michigan for nearly everyone. Since you have to pay the higher taxes it is nice that you receive special benefits in return. (from a quick Google Search)


New York's state income tax rates range from 4% to 8.82% over 8 income brackets. More on the Empire State's taxes can be found in the tabbed pages below.Mar 8, 2016

Michigan's state income tax rate: Withholding Rate: 4.25% Personal Exemption Amount: $4,000.
2016 Michigan Income Tax Withholding Guide.
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Old 02-13-2018, 11:02 PM
 
797 posts, read 806,407 times
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We have John Hancock LTC which my husband bought in his 50's. When he retired at 78 we moved to Florida. The policy was bought in NYC where we lived. When we moved to Florida we wanted to make sure there wouldn't be a problem. Called the Company and they said everything should remain the same. My husband at that time was 78rs old.
When he turned 80, we received a notice from John Hancock that our premium was doubling. We were stunned as we could not afford the cost of the policy at that price.
After calling them and expressing our anger over this huge raise, they said we could keep the policy at the old price if we gave up 'inflation protection.'
We decided to do that rather than cancel the policy. My husband is now 85 and I wonder if it is even worth paying this policy with no inflation protection. It is expensive and I still wonder how legal it is for them to double the premium. We have been paying this policy for over 30 years and I fear we are throwing our money away.
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Old 02-14-2018, 03:03 AM
 
72,579 posts, read 72,452,347 times
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Quote:
Originally Posted by runswithscissors View Post
In brief - it means whatever your insurance company has spent on your care, you can keep dollar for dollar in your estate and still go on Medicaid. Dollar for dollar except in two states that protect all of it.

So when you sign up for long-term care Ins., you could sign up for whatever “pool of money” equal to the value Of your estate if you want to protect it .

The government wants to incentivize people to buy insurance and the benefit besides the obvious is that you can get in much better places quickly with insurance then if you go directly on Medicaid .

And of course you can buy a plan for any amount of money you want it doesn’t have to eat all your assets.

It takes a minute to wrap your head around why they would do that but it makes sense.
the big problem with most states partnership plans is they do not protect income for the stay at home spouse . it is all well and good that you preserved assets but the stay at home spouse is forced to live what could be an impoverished lifestyle on what medicaid allows .

our partnership plan here in ny protects 100% of assets for life when you take just 3 years coverage and just as important has no income limitations once medicaid picks up the tab . we have a special version of medicaid called extended medicaid which has all different rules than regular medicaid with all the spend downs and restrictions on assets and incomes . it is not the same as what is called expanded medicaid which applies to health insurance .
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Old 02-14-2018, 03:05 AM
 
72,579 posts, read 72,452,347 times
Reputation: 50108
Quote:
Originally Posted by MI-Roger View Post
Yes, NY State offers a number of unique benefits for their residents. But the Income Tax Rate in NY is much higher than here in Michigan for nearly everyone. Since you have to pay the higher taxes it is nice that you receive special benefits in return. (from a quick Google Search)


New York's state income tax rates range from 4% to 8.82% over 8 income brackets. More on the Empire State's taxes can be found in the tabbed pages below.Mar 8, 2016

Michigan's state income tax rate: Withholding Rate: 4.25% Personal Exemption Amount: $4,000.
2016 Michigan Income Tax Withholding Guide.
i will gladly take my new york wages and pay the taxes any day .

these higher wages you can earn here give you a bigger ss check later no matter where you decide to relocate .

but regardless , talking about long term care and state taxes is apples and biscuits .
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Old 02-14-2018, 08:15 AM
 
9,716 posts, read 15,965,031 times
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Quote:
Originally Posted by mathjak107 View Post
we have a ny partnership that protects assets 100% as well as income for the stay at home spouse . this is our 4th year with the partnership plan . only 2 states do 100% asset protection .
Which are those two states, please?
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