Long Term Care Insurance Minnesota Partnership Cost and Companies
Minnesota Long Term Care Planning
Planning ahead for future long term care needs is a key part of retirement planning. Many people have had first-hand experience with a loved one who needed long term care. These experiences underscore the reality of the financial and emotional stress when someone needs long term care.
Long term care insurance can protect your retirement assets. Plus it gives you the peace of mind, knowing you can cover the cost of long term care if you need it in the future. A long term care plan also protects your family from having to be caregivers. And it enables you to choose where you’ll receive any care needed in later years.
Who Needs Long Term Care Insurance
Someone turning age 65 today has about a 70 percent chance of needing some type of long term care during their lifetime. While one-third may never need long term care, 20 percent will need it for longer than 5 years. The average length of time people need long term care services is 3 years.1
In Minnesota, the average cost for 3 years of long term care is $470,577 ($156,859 per year) at 2021 rates. That cost is projected to be $849,915 ($283,305 per year) in 2041.2
And it’s not only seniors that need long term care. Over 35 percent of people currently receiving long term care services are between 18 and 64.3
Does Medicare Cover Long Term Care?
Medicare is the federal health insurance program for those over 65 and some younger people with disabilities. Medicare does not pay for custodial care which makes up more than 90% of all long term care services.
An example of custodial care is when someone needs help with walking, bathing, eating, dressing or using the toilet. Custodial care is what people need most when they have a physical impairment from a stroke. Or, due to cognitive impairment from dementia or Alzheimer’s disease. Don’t make the mistake of thinking Medicare covers long term care costs. It doesn’t.
When To Buy Long Term Care Insurance
Like most advisers, we recommend buying long term care insurance in your fifties or early sixties. The primary reasons for this recommendation are:
- The younger you are when you buy a policy, the lower the annual premiums.
- By the time you reach your mid sixties, you’re more likely to have a medical condition that makes you ineligible for a preferred-health discount, or makes it tough to get coverage at all.
- Even though you’ll pay premiums a longer period of time, you’ll typically pay less overall than someone buying at an older age.
So it almost never pays to wait. And, while you’re waiting, you’re uninsured. If an accident or illness happens causing you to need long-term care, you’ll have to pay out of pocket.
Long Term Care Insurance Options in Minnesota
There are two types of insurance in Minnesota that pay for long term care costs. And each type of policy has its specific advantages. One of our licensed professionals can provide comparisons to help you decide which is best for you.
Traditional Long Term Care Insurance
You pay an annual premium, and if you need long term care due to a cognitive or physical impairment, the policy pays for your care. Traditional LTC insurance policies make up about half of all long term care policies sold.
Hybrid Long Term Care Insurance
Hybrid long term care policies combine the benefits of life insurance, or an annuity, with long term care benefits. You can buy a hybrid long term care insurance policy by paying a one-time lump sum premium, or over a set period of time.
If long term care is never needed, the policy works much like a traditional life insurance policy. It would then pay a death benefit to your beneficiary when you die. And the death benefit is often similar to the amount paid for the policy. But if you need long-term care, the amount of money available can exceed the death benefit or long term care annuity value, often several times over, offering tremendous leverage of premium dollars.
Cost of Long Term Care in Minnesota
This Minnesota long term care cost data can help you decide how much insurance you need. And it compares nursing facility, assisted living and home care costs. Here is the 2021 cost of long term care in the State of Minnesota.2
Minnesota Long Term Care Costs – 2021 (annual)
|Region||Nursing Home (private room)||Nursing Home (semi-private room)||Assisted Living (private room)||Home Health Aide (44 hours/wk)|
Minnesota Long Term Care Partnership Program
The Minnesota Long Term Care Partnership is a special Minnesota program combining private long term care insurance with the MN Medical Assistance program. The Minnesota Long Term Care Partnership helps Minnesota residents prepare for the possibility of needing nursing home care, assisted living care or home care.
A Minnesota Long Term Care Partnership Program policy allows you to keep all, or part of your assets under the MN Medical Assistance (Medicaid) program, if your long term care needs last longer than the benefits of your Partnership policy. Minnesota Legislature created the Minnesota Long Term Care Partnership under the auspices of several state government agencies.
Minnesota Long Term Care Partnership rates are like other policies. But the mandatory age-related inflation protection can increase the cost of insurance. So we recommend you compare Minnesota Long Term Care Partnership policies with regular LTC insurance. Because, you may find a wider range of choices better suited to your needs. This includes hybrid long term care insurance options not available under the MN LTC Partnership Program.
Minnesota LTC Partnership Reciprocity
Reciprocity allows you to buy a LTC Partnership policy in another state and keep the unique asset protection features if you move to Minnesota. The State of Minnesota will also recognize accumulated asset protection for Medicaid qualification if you’re receiving benefits from your Long Term Care Partnership policy before moving to Minnesota.
Minnesota Long Term Care Insurance Tax Credit
The Minnesota long term care insurance tax credit gives a $100 tax credit for purchasing a long term care insurance policy. This applies to qualified and non-qualified policies. But a policy must have at least $100,000 of coverage and inflation protection. The Minnesota long term care insurance tax credit is one per person, per year.
Long term care insurance provided by an employer is treated as any other health plan. Premiums paid by an employer for an employee (or spouse or dependents) are excluded from employment taxes and are 100% deductible by the employer. Benefit amounts received are not counted as income.4
How Much Does LTC Insurance Cost In Minnesota?
How much does long term care insurance cost in Minnesota? The average cost of long term care insurance in Minnesota depends on your age and health history when you buy the insurance. In general, the younger and healthier you are the lower the premium. The average cost will also depend on the following benefits you select:
- Benefit Period
- Daily Benefit
- Elimination Period (a deductible in days)
- Inflation Protection (if chosen)
Long Term Care Insurance Companies in Minnesota
Minnesota long term care insurance is available from several well respected insurance companies. We compare these companies to find you the best protection at the lowest cost. Here is a list of long term care insurance companies in Minnesota:
Compare Long Term Care Insurance Costs and Options
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One Stop Shopping
Compare Minnesota’s Long Term Care Insurance Companies, Quotes and Policy Costs. We’ll help you compare the companies and plan options side by side. We also give you detailed comparisons to the AARP LTC insurance offering.
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We impartially shop the market of top-rated insurance companies and help you find not only the best rate, but the best company. Then we give you rates, ratings, and reviews of the companies that sell these types of policies.
1. 2022 U.S. Department of Health and Human Services (www.longtermcare.acl.gov), site accessed 04/12/2022
2. Cost of Care Survey 2021 (Genworth.com), site accessed 04/12/2022
3. Family Caregiver Alliance (www.caregiver.org), site accessed 04/12/2022
4. Please consult your tax adviser for more information as we do not provide tax or legal advice.