WAC 182-513-1400 Long-term care (LTC) partnership program (index)

Under the long term care (LTC) partnership program, individuals who purchase qualified long-term care partnership insurance policies can apply for long-term care medicaid under special rules for determining financial eligibility.  These special rules generally allow the individual to protect assets up to the insurance benefits received from a partnership policy so that such assets will not be taken into account in determining financial eligibility for long-term care medicaid and will not subsequently be subject to estate recovery for medicaid and long-term care services paid.  The Washington long term care partnership program is effective on December 1, 2011. 

The following rules govern long-term care eligibility under the long-term care partnership program:

1. WAC 388-513-1405   Definitions
2. WAC 388-513-1410  What qualifies as a LTC Partnership?
3. WAC 388-513-1415  What assets can't be protected under the LTC partnership provisions?
4. WAC 388-513-1420  Who is eligible for asset protection under the LTC partnership policy?
5. WAC 388-513-1425  When would I not qualify for LTC medicaid if I have a LTC partnership policy that does not have exhausted benefits?
6. WAC 388-513-1430  What change of circumstances must I report when I have a LTC partnership policy paying a portion of my care?
7. WAC 388-513-1435  Will Washington recognize a LTC partnership policy purchased in another state?
8. WAC 388-513-1440  How many of my assets can be protected?
9. WAC 388-513-1445  How do I designate a protected asset and what proof is required?
10. WAC 388-513-1450  How does transfer of assets affect LTC partnership and medicaid eligibility?
11. WAC 388-513-1455  If I have protected assets under a LTC partnership policy, what happens after my death? 

WAC 182-513-1405 Definitions-Long Term Partnership Program

For the purposes of this section, the following terms have the meanings given them.  Additional definitions can be found at Chapter 388-500 WAC and WAC 388-513-1301.

"Issuer" means any entity that delivers, issues for delivery or provides coverage to, a resident of Washington, any policy that claims to provide asset protection under the Washington long-term care partnership act, chapter 48.85 RCW.  Issuer as used in this chapter specifically includes insurance companies, fraternal benefit societies, health care service contractors, and health maintenance organizations. 

"Long-term care services" means services received in a medical institution, or under a home and community based waiver authorized by home and community services or division of developmental disabilities.  Hospice services are considered long-term care services for the purposes of the long-term care partnership when medicaid eligibility is determined under chapter 388-513 or 388-515 WAC. 

"Protected assets" means assets that are designated as excluded or not taken into account upon determination of long-term care medicaid eligibility described in WAC 388-513-1315.  The protected or excluded amount is up to the dollar amount of benefits that have been paid for long-term care services by the qualifying long-term care partnership policy on the medicaid applicant's or client's behalf.  The assets are also protected or excluded for the purposes of estate recovery described in chapter 388-527 WAC, in up to the amount of benefits paid by the qualifying policy for medical and long-term care services. 

"Qualified long-term care insurance partnership" means an agreement between the Centers for Medicare and Medicaid Services (CMS), and the health care authority (HCA) which allows for the disregard of any assets or resources in an amount equal to the insurance benefit payments that are made to or on behalf of an individual who is a beneficiary under a long-term care policy that has been determined by the Washington state insurance commission to meet the requirements of section 1917 (b) (1) (c) (iii) of the act.  These policies are described in chapter 284-83 WAC.

"Reciprocity Agreement" means an agreement between states approved under section 6021 (b) of the Deficit Reduction Act of 2005, Public Law 109-171 (DRA) under which the states agree to provide the same asset protections for qualified partnership policies purchased by an individual while residing in another state and that state has a reciprocity agreement with the state of Washington.

WAC 182-513-1410 What qualifies as a LTC partnership policy?

A LTC partnership policy is a LTC policy that has been approved by the office of insurance commissioner as a LTC partnership policy described in chapter 284-83 WAC.

WAC 182-513-1415 What assets can't be protected under the LTC partnership provisions?

The following assets cannot be protected under a LTC partnership policy.

1. Resources in a trust described in WAC 388-561-0100  (6) and (7).
2. Annuity interests in which Washington must be named as a preferred remainder beneficiary as described in WAC 388-561-0201.
3. Home equity in excess of the standard described in WAC 388-513-1350.  Individuals who have excess home equity interest are not eligible for long-term care medicaid services.
4. Any portion of the value of an asset that exceeds the dollar amount paid out by the LTC partnership policy.
5. The unprotected value of any partially protected asset (an example would be the home) is subject to estate recovery described in chapter 388-527 WAC.

WAC 182-513-1420 Who is eligible for asset protection under a partnership policy?

1. The LTC partnership policy must meet all the requirements in chapter 284-83 WAC.  For existing LTC policies which are converted to a LTC partnership policy via an exchange or through the addition of a policy rider or endorsement, the conversion must take place on or after December 1, 2011 unless the policy is paying out benefits at the time the policy is exchanged.
2. You meet all applicable eligible requirements for LTC medicaid and:
   1. Your LTC partnership policy benefits have been exhausted and you are in need of LTC services.
   2. Your LTC partnership policy is not exhausted and is:
      1. Covering all costs in a medical institution and you are still in need for medicaid; or
      2. Covering a portion of the LTC costs under you LTC partnership policy but does not meet all of your LTC needs.
   3. At the time of your death, LTC partnership policy has paid out more benefits than you have designated as protected.  In this situation you estate can designate additional assets to be excluded from the estate recovery process up to the dollar amount the LTC partnership policy has paid out. 

WAC 182-513-1425 When would I not qualify for LTC medicaid if I have a LTC partnership policy in pay status?

You are not eligible for LTC medicaid when the following applies:

1. The income you have available to pay toward your cost of care described in WAC 388-513-1380, combined with the amount paid under the qualifying LTC partnership policy, exceeds the monthly private rate at the institution.
2. The income you have available to pay toward your cost of care on a home and community based (HCB) waiver described in chapter 388-515 WAC, combined with the amount paid under the qualifying LTC partnership policy, exceeds the monthly private rate in a home or residential setting.
3. You fail to meet another applicable eligibility requirement for LTC medicaid.

WAC 182-513-1430 What change of circumstances must I report when I have a LTC partnership policy paying a portion of my care?

You must report changes described in WAC 388-418-0005 plus the following: 

1. You must report and verify the value of the benefits that your issuer has paid on your behalf under the LTC partnership policy upon request by the department, and at each annual eligibility review.
2. You must provide proof when you have exhausted the benefits under your LTC partnership policy.
3. You must provide proof if you have given away or transferred assets that you have previously designated as protected.  Although, there is no penalty for the transfer of protected assets once you have been approved for LTC medicaid, the value of transferred assets reduces the total dollar amount that is designated as protected and must be verified.
4. You must provide proof if you have sold an asset or converted a protected asset into cash or another type of asset.  You will need to make changes in the asset designation and verify the type of transaction and new value of the asset. 

WAC 182-513-1435 Will Washington recognize a LTC partnership policy purchased in another state?

The Washington long term care partnership program provides reciprocity with respect to qualifying long-term care insurance policies covered under other state long-term care insurance partnerships.  This allows you to purchase a partnership policy in one state and move to Washington without losing your asset protection.  If your LTC policy is in pay status at the time you move to Washington and you are otherwise eligible for LTC medicaid, Washington will recognize the amount of protection you accumulated in the other state. 

WAC 182-513-1440 How many of my assets can be protected?

You can protect assets based on the amount paid by your LTC partnership policy.  Assets are protected in both LTC eligibility and estate recovery.  If the partnership for long-term care program is discontinued, an individual who purchased an approved plan before the date the program is discontinued remains eligible to receive dollar-for-dollar asset disregard and asset protection under the long-term care (LTC) medicaid program.

WAC 182-513-1445 How do I designate a protected asset and what proof is required?

1. Complete a DSHS LTCP asset designation form  listing assets and the full fair market value that are earmarked as protected at the time of initial application for LTC medicaid.
   1. The full fair market value (FMV) of real property or interests in real property will be based on the current assessed value for property tax purposes for real property.  A professional appraisal by a licensed appraiser can establish the current value if the assessed value is disputed.
   2. The value of life estate in real property is determined using the life estate tables found in:  http://www.dshs.wa.gov/manuals/eaz/sections/LongTermCare/LTCOappendix2.shtml
   3. If you own an asset with others, you can designate the value of your pro-rata equity share.
   4. If the dollar amount of the benefits paid under a LTCP policy is greater than the fair market value of all assets protected at the time of the application for long-term care medicaid you may designate additional assets for protection under this section.  The DSHS LTCP asset designation form  must be submitted with the updated assets indicated along with proof of the current value of designated assets.
   5. The value of your assets protected for your under your LTC partnership policy do not carry over to your spouse should they need medicaid long-term care services during your lifetime or after your death.  If your surviving spouse has their own LTC partnership policy he or she may designate assets based on the dollar amount paid under his or her own policy. 
   6. Assets designated as protected under this subsection will not be subject to transfer penalties described in WAC 388-513-1363
   7. Proof of the current fair market value of all protected assets is required at the initial application and each annual review.
2. Submit current verification from the issuer of the LTCP policy of the current dollar value paid toward long-term care benefits.  This verification is required at application and each annual eligibility review.
3. Any individual or the personal representative of the individual's estate who asserts that an asset is protected has the initial burden of:
   1. Documenting and providing by clear and convincing evidence that the asset or source of funds for the asset in question was designated as protected;
   2. Demonstrating the value of the asset and the proceeds of the asset beginning from the time period the LTC partnership has paid out benefits to the present; and\
   3. Documenting that the asset or proceeds of the asset remained protected at all times.

WAC 182-513-1450 How does transfer of assets affect LTC partnership and medicaid eligibility?

1. You transfer an asset within the sixty months prior to the medicaid application or after medicaid eligibility has been established, we will evaluate the transfer based on WAC 388-513-1363 and determine if a penalty period applies unless:
2. You have already been receiving institutional services;
3. Your LTC partnership policy has paid toward institutional services for you; and
4. The value of the transferred assets has been protected under the LTC partnership policy.
5. The value of the transferred assets that exceed your LTC partnership protection will be evaluated for a transfer penalty.
6. If you transfer assets whose values are protected, you lose that value as future protection unless all the transferred assets are returned.

WAC 182-513-1455 If I have protected assets under a LTC partnership policy, what happens after my death?

Assets designated as protected prior to death are not subject to estate recovery for medical or LTC services paid on your behalf as described in chapter 388-527 WAC as long as the following requirements as met:

1. A personal representative who asserts an assets is protected under this section has the initial burden of providing proof as described in chapter 388-527 WAC.
2. A personal representative must provide verification from the LTC insurance company of the dollar amount paid out by the LTC partnership policy.
3. If the LTC partnership policy paid out more than was previously designated, the personal representative has the right to assert that additional assets should be protected based on the increased protections.  The personal representative must use the DSHS LTCP asset designation form and send it to the office of financial recovery.
4. The amount of protection available to you at death through the estate recovery process is decreased by the FMV of any protected assets that were transferred prior to death