Indiana's Medicaid Asset Protection

Indiana's Medicaid Asset Protection

Indiana's Medicaid Asset Protection

A special feature included in the Indiana Long Term Care Insurance Program insurance policies is Medicaid Asset Protection. This feature allows a policyholder to keep more assets than is normally allowed when, and if, he needs help with long term care from the state's Medicaid Program. However, only the assets and NOT the income are protected.

This asset protection comes in two types, namely, "total asset protection" and "dollar-for-dollar asset protection".

Total asset protection means all of the assets will be disregarded during the Indiana Medicaid eligibility process, if the person ought to choose to apply for help from Medicaid. While, dollar-for-dollar asset protection means that the individual will be allowed to retain one dollar of his assets for every one dollar of benefits used in his Partnership policy. However, any remaining assets will be considered during the state's Medicaid eligibility process.

But, both these types depend on supporting factors such as: (a) the amount of Partnership insurance the person initially bought, (b) the amount of benefits he uses under his policy, and, (c) the inflation feature within his chosen policy.

In determining the type of asset protection the person will receive, the inflation feature within his policy plays a very essential role. It must be verified that the (a) total asset policies must have five percent compound inflation factor, and, (b) the dollar-for-dollar policies could have five percent compound, CPI, or five percent simple inflation (only for purchasers age 75 or older at time of purchase).

How does the eligibility for Medicaid works? In terms of Medicaid eligibility, the individual or someone in his behalf must apply for Medicaid. The individual must be living in Indiana at the time of application and, most importantly, must meet the state's Medicaid eligibility criteria set at that time of request. A Service Summary Report is required prior to the submission which will indicate the amount of asset protection he has earned by using his state partnership policy.

Once found eligible, the person must continue residing within the state while receiving assistance. However, the types of services received under the state's Medicaid program may differ from the services received under the Partnership policy. In some cases, the policyholder may receive more services under Medicaid compared to the policy and there may be some services received under the policy which are not available under Medicaid.

Moreover, it is also important to know that premiums paid for the partnership policies may be deducted on a policyholder's state tax return. And, a reciprocity agreement exists between Indiana and Connecticut Medicaid programs. This means that each of these states' Medicaid programs can honour the asset protection earned under the other state's Partnership policies. Asset protection honoured under a reciprocal agreement will be on a dollar-for-dollar basis only.

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