Revision 18-1; Effective March 1, 2018

 

P-1100 Texas Administrative Code Rules

Revision 12-1; Effective March 1, 2012

 

From Subchapter C, Financial Requirements, Division 2, Resources.

§358.35.5 Qualified Long-Term Care Partnership Program Insurance Policies.

(a) This section describes the Long-Term Care Partnership Program under which a person's resources are disregarded in the eligibility determination equal to the amount of benefits paid to or on behalf of a person by a Long-Term Care Partnership policy.

(b) The Texas Health and Human Services Commission (HHSC) administers the Long-Term Care Partnership Program.

(c) In this section, the following words and terms have the following meanings, unless the context clearly indicates otherwise:

(1) "Long-Term Care Partnership Program" means the program established under the Texas Human Resources Code, Chapter 32, Subchapter C.

(2) "Qualified plan holder" means the beneficiary of a qualified long-term care benefit plan that meets the requirements set forth in subsection (d) of this section.

(3) "Resource disregard" means the total equity value of resources not exempt under rules governing Medicaid eligibility that are disregarded in determining eligibility for Medicaid.

(4) "Resource protection" means the extension to a plan holder of an approved plan of a dollar-for-dollar resource disregard in determining Medicaid eligibility.

(5) "Dollar-for-dollar resource disregard" means a resource disregard in which the amount of the disregard is equal to the sum of benefit payments made on behalf of the approved plan holder.

(d) A Long-Term Care Partnership Program policy is one that meets all of the following requirements:

(1) On the date the policy was issued, the state in which the insured resided had in place an approved Medicaid state plan amendment under 42 U.S.C. §1396p(b).

(2) The policy meets the requirements set forth by the Texas Department of Insurance under Title 28, Part 1, Chapter 3 of the Texas Administrative Code (relating to Life, Accident and Health Insurance and Annuities).

(e) At application for long-term care services, the qualified plan holder receives a dollar-for-dollar disregard of his or her resources.

(1) HHSC determines Medicaid eligibility in accordance with this chapter.

(2) A person may apply for Medicaid before exhausting the benefits of a Long-Term Care Partnership Program policy. If a person applies for and is eligible to receive Medicaid before the Long-Term Care Partnership Program policy is exhausted, the Long-Term Care Partnership Program insurer must make payment for medical assistance to the maximum extent of its liability before Medicaid funds may be used to pay providers for covered services as established in this chapter.

(3) If a person has applied for and been found eligible to receive Medicaid and subsequently receives additional resources, the person continues to be eligible for Medicaid if the total resources do not exceed the individual resource limit after applying the dollar-for-dollar resource disregard.

(f) If the Long-Term Care Partnership Program is discontinued, a person who purchased a Long-Term Care Partnership Program policy before the date the program is discontinued remains eligible to receive the dollar-for-dollar resource exclusion.

 

P-1200 Program Overview

Revision 18-1; Effective March 1, 2018

 

The Long-Term Care Partnership (LTCP) is a public-private partnership between state agencies and private insurance providers to encourage individuals to plan for their long-term care needs. Specifically, the LTCP involves collaboration among private long-term care insurers, long-term care insurance producers (agents and brokers), Texas Department of Insurance (TDI), the Health and Human Services Commission (HHSC).

Owning an LTCP policy does not guarantee access to Medicaid, even if the policy holder exhausts his or her benefits. A person must still meet all Medicaid eligibility requirements in order to be eligible for Medicaid. The LTCP benefits a person by disregarding countable resources in an amount equal to the value of benefits paid by a qualified LTCP policy on the person's behalf at the time of Medicaid eligibility determination and at Medicaid estate recovery.

If the LTCP policyholder needs to rely on Medicaid for payment of long-term care services, the person may qualify for various Medicaid long-term care programs and still own countable resources in excess of the statutory resource limit. Additionally, at the time of death, resources designated for an LTCP disregard will not be subject to Medicaid Estate Recovery Program (MERP) for the person's Medicaid costs.

Current policy in D-7600, Long-Term Care Insurance Policies, remains in effect for policies that are not LTCP qualified.

To participate in the LTCP, a person must have utilized some or all of the benefits of a qualified LTCP policy. A qualified LTCP policy must meet all the rules set out by the TDI including a specific amount of inflation protection based on the person's age at the time the person purchases the policy.

 

P-1210 Resource Protection Under the LTCP

Revision 12-1; Effective March 1, 2012

 

A policy holder is considered an LTCP participant when a person:

  • requests and is eligible for Medicaid payment of long-term care services, or
  • is receiving Medicaid payment of long-term care services, and
  • has received some or all of the long-term care benefits paid out under a qualified LTCP policy.

A person participating in the LTCP may designate countable resources for a dollar-for-dollar disregard in an amount equal to the value of benefits paid out by a qualified LTCP policy on the person's behalf. Once the countable resource is designated, the LTCP provides the person with the following benefits:

  • disregards the value of the designated countable resource in the resource limit calculation.
  • allows the person to transfer a designated non-income producing countable resource without penalty.

However, Medicaid will not pay for long-term care services that are paid by the LTCP policy until such time as these same benefits under the person's LTCP policy have been exhausted. This is consistent with federal law that Medicaid is the payer of last resort.

A person must provide a written resource designation and must verify the value of the designated countable resource(s). Form H0056, Notice of Opportunity to Designate Countable Resources, is used to allow the person an opportunity to designate a countable resource for the LTCP disregard. Once designated, a person must:

  • report any sale, transfer or conversion of a designated resource(s) and verify the value of the designated resource(s) as of the date the reported transaction took place.
  • document and verify any designated resource(s) still owned by the person at the time of each Medicaid redetermination. (Special reviews may be performed periodically before each annual redetermination.)

Note: If a designated countable resource is expended, no additional countable resource designation is allowed as a replacement for the expended countable resource.

Medicaid Eligible Persons, who secure additional resources and have not designated resources up to the amount of LTCP benefits paid, may then designate additional countable resources up to the amount of LTCP benefits paid.

 

P-1220 Interaction of LTCP Disregard with other Medicaid Policies

Revision 12-1; Effective March 1, 2012

 

The LTCP affects the following Medicaid policies:

  • TPR: Benefits under an LTCP policy that are available while a person is receiving Medicaid are considered as a TPR. Medicaid is the payer of last resort.
  • Resource division under spousal impoverishment policy: The Spousal Protected Resource Amount (SPRA) for a married couple is established before designation of countable resource(s) for the LTCP disregard. Any available LTCP disregard is applicable to the countable resource(s) owned by the eligible spouse only. The following should be considered:
    • Who owns the LTCP policy?
    • Who does the LTCP policy cover?
    • Who did the LTCP policy pay benefits for?
    • Who is the disregard allowed for?
    • What are the eligible spouse's countable resource(s)?

Note: If the designated countable resource is income-producing, the income is still potentially countable for eligibility and co-payment purposes according to current MEPD policy. For example, if the person designates rental property for the LTCP disregard, any countable rental income (as calculated under existing policy) is still considered in the eligibility and co-payment budget. If the income-producing designated countable resource is transferred, there is no transfer penalty for the resource; however, a potential transfer of income may exist, which could result in a penalty period.

All other eligibility and co-payment criteria for MEPD eligibility are still applicable.

 

P-1230 Policy Concepts for Resource Disregards

Revision 12-1; Effective March 1, 2012

 

Only countable resources may be designated for the LTCP disregard in the eligibility determination.

The allowable LTCP resource disregard amount is equal to the amount the qualified LTCP policy has paid for the person applying for or receiving Medicaid.

If a designated countable resource declines in value for reasons other than tampering, additional countable resources may be designated up to the LTCP pay-out amount.

If a designated countable resource increases in value for any reason, consider the current fair market value (FMV) against the current amount of LTCP benefits paid.

A person may expend a designated countable resource, however no additional LTCP designation is allowed in this circumstance.

Transferred countable resources may be designated for the LTCP disregard to eliminate or reduce a transfer penalty.

The LTCP disregard may not be applied to excess home equity value.

The LTCP disregard is applicable only to the person who has received the LTCP benefits.

When an LTCP participant has fewer countable resources than the amount the LTCP policy has paid, the full LTCP disregard amount will be disregarded after death when MERP becomes applicable.

Texas intends to participate in reciprocal recognition with other participating LTCP states.

 

P-1240 LTCP Scenarios

Revision 12-1; Effective March 1, 2012

 

Example 1: At application a person has purchased and exhausted a $100,000 qualifying LTCP policy.

The person's only resource is a homestead with equity value of $600,000. The person is not eligible for vendor payment as the equity value of the homestead exceeds the limit ($525,000).

Can the person designate the amount of $75,000, which exceeds the $525,000 home equity limit, as an LTCP disregard?

Response: The person cannot designate the available $75,000 as an LTCP disregard.

Example 2: At application a person has purchased and exhausted an LTCP policy in the amount of $100,000. The person has a $100,000 transfer.

Can the $100,000 transfer be nullified by the allowable $100,000 LTCP disregard or are only available countable resources eligible for the LTCP disregarded?

Response: The LTCP disregard may be applied dollar-for-dollar to the transfer amount.

Example 3: At application a person has purchased and exhausted a $100,000 qualifying LTCP policy.

The person owns a home valued at $200,000. The home is an excluded resource based on the person's declared intent to return to the home. The home cannot be designated for the LTCP disregard because it is not a countable resource. The person designates a $100,000 savings account, which is a countable resource, as the LTCP disregarded resource.

When the person dies, what is disregarded for estate recovery?

Response: Whatever countable resource is designated at application for the LTCP disregard is the countable resource disregarded at estate recovery. The person's LTCP designated $100,000 savings account is the resource disregarded at estate recovery.

Example 4: At application a person has a $100,000 qualifying LTCP policy that has paid out $50,000. At application the person has $50,000 in countable resources, which is designated for the LTCP disregard. At review, the LTCP policy has paid out the remaining $50,000.

How is the additional LTCP disregard applied? Will the additional $50,000 the LTCP policy paid out after the client was determined eligible be applied to the homestead FMV and be disregarded at estate recovery?

Response: The LTCP disregard continues to be applied to the designated $50,000 in countable resources at review. The full amount the LTCP policy paid out is disregarded at estate recovery.

Example 5: At application a person has purchased and exhausted an LTCP policy in the amount of $100,000. The person designates countable real property, FMV $90,000 for the LTCP disregard. At review the designated countable real property FMV increased to $110,000.

Is the remaining LTCP disregard balance of $10,000 ($100,000 – $90,000 = $10,000) applied to the FMV increase? Is the person now over the resource limit as the allowable LTCP designation ($100,000) is not enough to cover the increase in the FMV ($110,000) of the countable LTCP designated resource?

Response: At review the FMV of the countable resource is verified. If the FMV is over the allowed LTCP disregard amount, the amount over the LTCP disregard amount is considered a countable resource. ($110,000 [FMV] – $100,000 [LTCP disregard] = $10,000 countable)

Example 6: At application a person has purchased and exhausted an LTCP policy in the amount of $100,000. The person designates countable real property, FMV $100,000 for the LTCP disregard. At review, the designated countable real property FMV decreased to $90,000 and the person has acquired other countable resources.

Are the newly acquired countable resources allowed for LTCP designation and disregard at review?

Response: At review, if the person has an unused LTCP disregard amount, the person may designate other newly acquired countable resources dollar-for-dollar up to the amount of the unused LTCP disregard amount.

Example 7: At application a person has purchased and exhausted an LTCP policy in the amount of $100,000. The person designates countable rental property, FMV $100,000.

Is the income from the rental property countable?

Response: Although the FMV of the countable rental property is disregarded in the eligibility determination, the rental income is considered countable income.

Example 8: At application a person has purchased and exhausted a $100,000 qualifying LTCP policy in Kansas. The person then moves to Texas and applies for Medicaid.

Is an LTCP disregard allowable for the usage of a $100,000 LTCP policy in Kansas?

Response: Due to reciprocity, Texas honors the Kansas LTCP policy and allows an LTCP disregard of $100,000 of countable resources.

Example 9: A person resides in Kansas and has purchased and exhausted a $100,000 qualifying LTCP policy. The person is eligible in Kansas for their Medically Needy program.

Since the person was on a Medically Needy program in Kansas, would the person automatically be eligible for Medicaid in Texas?

Response: Kansas and Texas have different eligibility criteria for their Medicaid programs. If the person moves to Texas it does not guarantee Texas Medicaid eligibility. Due to reciprocity, Texas honors the Kansas LTCP policy and allows an LTCP disregard of $100,000 of countable resources.

Example 10: Mr. and Mrs. each purchase and exhaust a qualifying LTCP policy for $100,000. Mr. and Mrs. have $150,000 in countable resources. Mr. and Mrs. have a homestead FMV of $200,000. The $150,000 in countable resources is designated.

Is the remaining LTCP disregard balance of $50,000 disregarded at estate recovery?

Response: The full $200,000 LTCP disregard amount will be disregarded at estate recovery.

Example 11: Mr. and Mrs. each purchase and exhaust a qualifying LTCP policy for $100,000. Mrs. dies. At application for Medicaid Mr. has $150,000 in countable resources.

Can Mr. count the $100,000 Mrs.'s LTCP policy paid toward the cost of her care in his countable resource LTCP designation?

Response: No, Mr. can only designate countable resources up to the amount his LTCP policy has paid out, which is $100,000. Mr.'s remaining $50,000 in countable resources is countable towards the resource limit.

Example 12: Mr. and Mrs. each purchase and exhaust a qualifying LTCP policy for $100,000. Mr. enters a nursing facility and applies for Medicaid. Total countable resources are $250,000. The SPRA protects $113,640 (maximum SPRA) for the wife. They do not qualify for an expanded SPRA.

$250,000
– $113,640 (SPRA Mrs.)
$136,360
– $100,000 (LTCP disregard designation Mr.)
= $ 36,360 Countable amount

Can they designate the countable amount using her LTCP disregard?

Response: No, the institutionalized spouse is the applicant and the only one eligible for the LTCP disregard.