In general terms, if a person has benefitted from a Qualified Partnership Plan Long Term Care Insurance policy, the person can keep extra amounts from Medicaid spend down that are equal to the benefits received from the Qualified Partnership Plan (QPP) Long Term Care Insurance policy.
For more on Medicaid qualification and on Medicaid spend down please see other articles on this website. These can be very complex issues. For more on QPP policy issues, which can also be somewhat complex, please also see other articles published on this web site.
This benefit of Qualified Partnership Policies which allow one to keep extra money from a Medicaid spend down also applies after death.
In general terms, once a person has passed on, the person no longer has any assets which are exempt from Medicaid, and what is sometimes called the Medicaid Estate Recovery Unit, or the Medicaid Estate Administration Unit will seek to recover Medicaid costs from the estate of any person who has received Medicaid during their lifetime.
However, if a person has received benefits from a Qualified Partnership Plan Long Term Care Insurance policy, the person can keep an amount equal to the amount of these benefits even after death, and the state will not seek to recapture this from the person’s estate.
There is a limit to this, however.
If a person has spent money, or given assets away, during life, and if this spending or gifting was from the enhanced amount that the person is allowed to keep because the person received benefits from a Qualified Partnership Plan Long Term Care Insurance policy, the amount that is protected from the Estate Recovery Unit will be reduced by the amount of the spending or gifting.
To give an example, let us say that a person received $200,000 in benefits from a Qualified Partnership Plan Long Term Care Insurance policy. A person can ordinarily keep only $2,000 in savings when the person spends down to qualify for Medicaid. Because the amount that a person can keep is increased by the amount received in benefits from a Qualified Partnership Plan Long Term Care Insurance policy, the person in this case would be able to keep $200,000 plus $2,000, for a total of $202,000.
The Estate Administration Unit (the Estate Recovery Unit) will still be able to recover the $2,000 in such a situation, but the person’s Will will control where the remaining $200,000 goes when the person dies, if the person still has this money.
If that person gives away $15,000 after qualifying for Medicaid, however, the amount that the person can dispose of in his Will is reduced by $15,000 to $185,000.
Similarly, if the person spends $25,000, the amount that the person can dispose of in his or her Will is reduced by $25,000 to $175,000.
Ordinarily this will not cause a problem, since the person will have no more to dispose of than what is left after such gifting or spending, but sometimes this can make a difference, If, for example, the person receives an inheritance, or if the person is able to leave Medicaid during life, and builds up more assets before the person dies, the reduction in the amount that is protected from estate recovery can be very signficant.
Steven A. Heinrich
Divorce & Custody
Wills, Guardians & Elder Law
- Wills, Trusts, and Probates
- Guardians and Conservators
- Elder Law
- When Should You See An Elder Law Attorney
- Substitute Decision Makers
- Overview of Guardianships, Trusts, and Health Care Documents
- Finances and Business
- Health Care Documents
- Guardianships and Conservatorships