A CONSUMER GUIDE TO THE
MARYLAND
LONG-TERM CARE
INSURANCE
PARTNERSHIP PROGRAM
A CONSUMER GUIDE TO THE
MARYLAND
LONGTERM CARE
INSURANCE
PARTNERSHIP
PROGRAM
INSURANCE ADMINISTRATION
THE MARYLAND LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM
Maryland Insurance Administration • 800-492-6116 • www.insurance.maryland.gov
TABLE OF CONTENTS
Who We Are ...................................................1
How We Help Consumers..........................................1
What Is Long-Term Care? ..........................................2
How Much Does Long-Term Care Cost? ..............................3
What Can I Do to Pay for My Long-Term Care Costs?....................3
Does Medicare Cover Long-Term Care? ...............................4
What if I Have a Medicare Supplemental Policy? ........................4
What Are Long-Term Care Insurance Benets?..........................5
Should I Purchase Long-Term Care Insurance or a Long-Term Care
Insurance Rider to My Life Insurance or Annuity Contract? .............5
Questions You Need to Ask Before You Purchase Long-Term Care
Insurance or a Long-Term Care Insurance Rider to Your Life
Insurance or Annuity Contract:...................................6
What Is the Maryland Long-Term Care Insurance Partnership Program? ......7
How Does Asset Protection Work for the Long-Term Care
Partnership Program? ..........................................7
Do the Other Medicaid Eligibility Requirements Still Apply
to Me if I Purchase a Partnership Policy? .............................8
Are ere Any Other Benets of Purchasing a Partnership Policy?............8
What Could Disqualify Your Policy as a Partnership Policy? ................8
What If I Have An Existing Long-Term Care Insurance Policy?
Can I Turn It Into A Partnership Policy? .............................9
Where Can I Purchase a Partnership Plan? .............................9
How Will I Know I Have Purchased a Partnership Policy?..................9
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Maryland Insurance Administration • 800-492-6116 • www.insurance.maryland.gov
THE MARYLAND LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM
WHO WE ARE
e Maryland Insurance Administration (MIA) is the state agency that regulates the
business of insurance in Maryland. If you are having a problem related to insurance,
the MIA will try to help you to solve it.
HOW WE HELP
CONSUMERS
We provide assistance to consumers, businesses, health care providers (doctors,
hospitals), and producers (agents and/or brokers) in all areas of insurance; including
life, health, disability, automobile, homeowners, and property.
• We can provide you with answers to your general insurance questions and
suggest actions or processes that you may wish to follow in order to address
and resolve your insurance questions or problems.
• We can provide you with educational materials (such as homeowners
and automobile consumer guides) to help you understand the types of
coverages you may be purchasing and your rights and obligations with
respect to various types of insurance policies, as well as what you may
wish to consider and the types of questions to ask when you are
shopping for insurance.
• We can provide you with guides that may help you to compare rates
among insurance companies writing automobile, homeowners,
health coverage for small employers, and for Medicare supplement
insurance policies.
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THE MARYLAND LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM
• We may be able to investigate any circumstance that you bring to our
attention, in writing, to ensure that the companies and individuals
engaged in the business of insurance in our state obey Maryland laws
and regulations.
• We may be able to investigate written allegations that your insurance
carrier, insurance producer (agent), or other entity engaged in the
business of insurance:
- did not pay or authorize the payment for medically necessary services;
- has improperly denied or delayed payment of all or some portion of
your claim;
- has improperly terminated your insurance policy;
- has improperly raised your insurance premiums;
- has made false statements to you in connection with the sale of
insurance or the processing of insurance claims;
- overcharged you for services, including premium nance charges.
WHAT IS LONG-TERM CARE?
Individuals with a prolonged illness, disability or cognitive condition (for
example, Alzheimer’s disease) often need someone to help with daily activities
(such as dressing, bathing, etc.), as well as to provide skilled medical attention.
Long-term care services may include care management, rehabilitation services,
adult day care or hospice. ese services may be delivered in an assisted living
facility, at home or in a nursing home.
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THE MARYLAND LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM
HOW MUCH DOES LONG-TERM CARE COST?
e cost of long-term care depends on a number of factors, including the type of
care you receive, where you receive this care, who provides this care and the length
of time you need to receive this care. According to the United States Department of
Health & Human Services, the national average costs for long-term care services in
2016 are as follows:
• $225 a day or $6,844 per month for a semi-private room in a nursing home
• $253 a day or $7,698 per month for a private room in a nursing home
• $119 a day or $3,628 for care in an assisted living facility
(for a one-bedroom unit)
• $20.50 an hour for a home health aide
• $20 an hour for a homemaker services
• $68 per day for services in an adult day health care center.
WHAT CAN I DO TO PAY FOR MY
LONG-TERM CARE COSTS?
Paying for long-term care does not need to be overwhelming. Several options
are available to make paying for long-term care more manageable. Some of the
options include:
1. You may choose to fund the costs of your long-term care through
investments you have made, such as an annuity. For more information
about annuities, see the Maryland Insurance Administration’s
publication, A Consumer Guide to Annuities, available online:
www.insurance.maryland.gov/Consumer/Documents/publications/
consumerguidetoannuities.pdf.
2. You may decide to sell certain assets, such as your home or other real estate.
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THE MARYLAND LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM
3. You may decide to obtain a reverse mortgage. See:
http://longtermcare.acl.gov/costs-how-to-pay/paying-privately/reverse-mortages/.
4. You may be able to use your life insurance policy to pay for your long-term
care by using one of the following methods:
a. Combination life/long-term care insurance policies.
b. Accelerated death benets from a life insurance policy.
c. Life settlement.
d. Viatical settlement.
5. You could purchase a long-term care insurance policy. Find out more at:
www.naic.org/documents/prod_serv_consumer_ltc_lp.pdf.
DOES MEDICARE COVER LONG-TERM CARE?
If you are eligible for Medicare, Medicare may provide limited coverage for skilled
nursing and rehabilitation services that are provided in an approved facility. But,
Medicare does not cover custodial care services, intermediate care or services for
a prolonged period of time. For additional information about Medicare, visit the
Center for Medicare and Medicaid web site, www.cms.gov/home/medicare.asp.
WHAT IF I HAVE A MEDICARE
SUPPLEMENTAL POLICY?
If you have a Medicare supplemental policy, keep in mind that while some
supplemental policies provide a limited benet to help pay for at-home recovery
on a short-term basis, not all do. Also, while some of the Medicare supplemental
policies provide a limited benet while you are conned in a skilled nursing
facility, the benet only will be payable for the 20th through the 100th day of
skilled nursing care in a nursing home. Under such a policy, you would not receive
any benets if you are receiving custodial or intermediate care or if you need care
after the 100th day of connement. It is important that you carefully review and
understand the terms of your policy, what it covers and how much it pays.
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THE MARYLAND LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM
WHAT DOES LONG-TERM
CARE INSURANCE PAY FOR?
Long-term insurance policies, long-term care insurance riders to life insurance
policies and annuity contracts provide coverage for certain long-term care expenses
that usually are not covered by traditional health insurance and HMO contracts,
Medicare, or Medicare supplemental policies. Coverage is provided when you
are unable to do a certain number of activities of daily living (such as bathing,
eating, or dressing yourself) or are cognitively impaired. While the exact terms
and conditions of coverage depend upon your individual policy, long-term care
insurance generally covers services such as nursing home stays for custodial,
intermediate and skilled nursing care. ese policies also may cover home health
care and adult day care. Long-term care insurance can be purchased as a separate
stand-alone policy or as a rider to a life insurance policy or annuity contract.
For more information on long-term care insurance, see A Shopper’s Guide to
Long-Term Care Insurance, produced by the National Association of Insurance
Commissioners at: www.naic.org/documents/prod_serv_consumer_ltc_lp.pdf.
SHOULD I PURCHASE LONG-TERM CARE
INSURANCE OR A LONG-TERM CARE
INSURANCE RIDER TO MY LIFE INSURANCE
OR ANNUITY CONTRACT?
Long-term care insurance is not for everyone. Before buying a long-term care
insurance policy or a rider to your life insurance policy or annuity contract, it
is important to understand what the policy or contract covers, know the limits
of the policy or contract and understand any conditions the policy or contract
may exclude. It is also important to make sure you can aord the premium
payments.
It is also a good idea to consult with a tax advisor, as well as an insurance
advisor, when deciding whether a long-term care insurance policy is right
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Maryland Insurance Administration • 800-492-6116 • www.insurance.maryland.gov
THE MARYLAND LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM
for you. You may be eligible for federal and state tax benets. Maryland law
provides for a one-time tax credit of up to $500 after you purchase a long-term
care insurance policy. In addition, federal law provides tax advantages if you
purchase a qualied long-term care insurance plan.
QUESTIONS YOU NEED TO ASK BEFORE
YOU PURCHASE LONG-TERM CARE
INSURANCE OR A LONG-TERM CARE
INSURANCE RIDER TO YOUR LIFE INSURANCE
OR ANNUITY CONTRACT:
• What type of care is covered?
• Is there a waiting period before I can start using the benets?
• What happens if I am late paying the premium?
• Is there a maximum number of days the policy or contract covers?
• Does the policy or contract have a per day limit? If so, does it take
ination into account?
• What are the rules about pre-existing conditions?
• What must happen in order for me to receive benets under the policy or
contract, i.e. doctor’s certication, unable to perform daily activity?
• Has the insurer received approval to sell long-term care insurance in
Maryland?
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Maryland Insurance Administration • 800-492-6116 • www.insurance.maryland.gov
THE MARYLAND LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM
WHAT IS THE MARYLAND LONG-TERM CARE
INSURANCE PARTNERSHIP PROGRAM?
e Maryland Long-Term Care Insurance Partnership Program is an innovative
partnership between Maryland and private insurance companies that issue
long-term care insurance policies. A policy sold under the Long-Term Care
Insurance Partnership Program, by law, must meet the same standards as a long-
term care policy not sold under the program. In addition, a partnership policy
must meet certain specic federal and state requirements, and be certied as
a “long-term care partnership policy” by the Commissioner of the Maryland
Insurance Administration (MIA). Partnership policies provide an additional
level of protection, when compared to regular long-term care insurance policies.
In particular, Partnership policies permit you to protect additional assets from
spend-down requirements under Maryland’s Medicaid program if you should need
assistance under this program, and you qualify.
HOW DOES ASSET PROTECTION
WORK FOR THE LONG-TERM CARE
PARTNERSHIP PROGRAM?
e asset eligibility and recovery provisions of the Medicaid program of Maryland
are applied by disregarding an additional amount of assets equaling the amount of
insurance benets you have received from your Partnership Policy. For example,
if you had received $200,000 of insurance benets from your Partnership Policy
at the time of application for Medicaid, you generally would be able to retain
$200,000 of assets above and beyond the amount of assets normally permitted for
Medicaid eligibility.
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THE MARYLAND LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM
DO THE OTHER MEDICAID ELIGIBILITY
REQUIREMENTS STILL APPLY TO ME IF I
PURCHASE A PARTNERSHIP POLICY?
Yes, including special rules that may apply if the equity in your home exceeds a
certain threshold. (As of 2018, the equity value limit was $572,000, but this limit
may change over time based on federal standards.)
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In addition, you must meet the
Medicaid program’s income requirements and may be required to contribute some
of your income to the costs of your care once you become eligible for Medicaid.
ARE THERE ANY OTHER BENEFITS OF
PURCHASING A PARTNERSHIP POLICY?
Yes. ere may be tax benets. By law, to qualify as a Partnership Policy, the policy
must be a qualied long-term care insurance contract under federal tax law, and as
such, the insurance benets you receive from the policy generally will be subject to
benecial income tax treatment. (Please note that a policy can be a qualied long-
term care insurance contract under federal tax law, with the same benecial income
tax treatment, even if it is not a Partnership Policy.) In addition, if you were under
age 76 when you purchased your Partnership Policy, it must provide ination
protection to help protect against potential future increases in the cost of long-term
care. (For older purchasers, an oer of ination protection is required.)
WHAT COULD DISQUALIFY YOUR POLICY
AS A PARTNERSHIP POLICY?
If you make any changes to your policy or certicate, such changes could aect
whether your policy or certicate continues to qualify as a Partnership Policy.
Before you make any changes, you should consult with the issuer of your policy to
determine the eect of a proposed change. In addition, if you move to a state that
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https://www.medicaid.gov/medicaid/eligibility/downloads/spousal-impoverishment/ssi-and-spousal-
impoverishment-standards.pdf
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Maryland Insurance Administration • 800-492-6116 • www.insurance.maryland.gov
THE MARYLAND LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM
does not maintain a Qualied Partnership or does not recognize your policy as a
Partnership Policy, you would not receive Medicaid asset protection in that state.
Also, changes in federal or state law could aect the Medicaid asset protection
available with respect to your Partnership Policy.
WHAT IF I HAVE AN EXISTING LONG-TERM
CARE INSURANCE POLICY? CAN I TURN IT
INTO A PARTNERSHIP POLICY?
No. Federal rules require that any Partnership Policy be issued after the date of
the State Plan Amendment. If you purchased a policy before January 1, 2009, or
before the date your particular insurer was certied to sell a partnership policy in
Maryland, it would not qualify as a Partnership Policy.
WHERE CAN I PURCHASE A
PARTNERSHIP PLAN?
Companies wishing to sell Partnership long-term care policies are required to
go through a stringent review process. e Maryland Insurance Administration
will maintain a list of approved companies. You may obtain a copy of that
list by contacting us at 800-492-6116 or by visiting the Maryland Insurance
Administration’s website at www.insurance.maryland.gov.
HOW WILL I KNOW I HAVE PURCHASED
A PARTNERSHIP POLICY?
e schedule page of the policy is required to contain a notice if the policy is a
Partnership Policy. e notice on the schedule page will indicate whether the policy
is intended to meet the standards to be a Partnership Policy in Maryland.
Under state law, the carrier also is required to provide a separate notice, on its
letterhead, that explains the benets and the special rights of a Partnership Policy.
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THE MARYLAND LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM
OTHER QUESTION
Q: CAN MY LONG-TERM CARE INSURER CANCEL MY POLICY BECAUSE
OF MY AGE OR HEALTH CONDITIONS?
A: No. Under Maryland regulations, COMAR 31.14.01.04F (1), a long-term care
insurance policy can only be terminated by the insurer in three instances: (1)
nonpayment of premiums by the insured; (2) material misrepresentation in the
application (within the contestable period); or (3) fraud in the application.
QUESTIONS ABOUT LONG-TERM CARE
INSURANCE RATES
Q: WHY ARE LONG-TERM CARE INSURANCE PREMIUMS INCREASING?
A: When long-term care insurance policies were initially introduced across the
country in the late 1970’s and early 1980’s, they were the rst of their kind.
Insurance companies had no prior data from which to draw assumptions and
make predictions about how the insurance market would behave 30 to 40 years
into the future. Unfortunately, many of these assumptions and predictions were
inaccurate and resulted in companies being unable to price the long-term care
insurance products appropriately. As a result, long-term care insurers are raising
premiums, to ensure that they will be sucient to pay future claims. Some
original incorrect pricing assumptions and predictions included:
Higher than anticipated persistency: Fewer policyholders have allowed their
policies to lapse than originally anticipated.
Policyholders are living longer than originally assumed, resulting in a higher
rate of utilization of long-term care benets. Additionally, the length of time
a policyholder utilizes long-term care benets is much longer than originally
assumed.
Long-term care insurers’ investment return rates are signicantly lower than
originally assumed.
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THE MARYLAND LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM
Q: WHAT FACTORS DO INSURANCE COMPANIES CONSIDER TO
DETERMINE THE PREMIUM RATES?
A: When insurance companies initially develop rates for long-term care insurance
premiums, the main actuarial assumptions taken into account include lapse
assumptions, mortality assumptions, morbidity assumptions and interest rate
assumptions. Additionally, an insurance company may oer you discounts
when you are initially purchasing a long-term care insurance policy, for being a
very healthy applicant (i.e. passing more rigorous underwriting criteria), being
married, or living with someone. Finally, long-term care insurance is generally
oered on an issue-age basis, meaning the younger you are when you buy the
policy, , the lower the insurance premium.
Q: IS THERE A MAXIMUM ALLOWED ANNUAL PREMIUM INCREASE FOR
MY LONG-TERM CARE INSURANCE?
A: Yes. Maryland regulations, COMAR 31.14.01.04(A)(5), provides that except
under certain exceptional circumstances, a long-term care insurer cannot
raise your premium by more than 15% in a 12-month period. Furthermore,
COMAR 31.14.02.06(B)(2)(d) states that, except under limited circumstances,
your renewal premium rate cannot be greater than new business premium rates,
except for dierences attributable to benets.
Q: DO I HAVE ANY OPTIONS OTHER THAN ACCEPTING THE PREMIUM
RATE INCREASE?
A: Yes. If you would not like to accept the full premium rate increase, COMAR
31.14.01.36 requires every long-term care insurance policy and certicate to
include a provision allowing the policyholder to reduce coverage and lower the
policy premium in at least one of the following ways:
Reducing the maximum benet; or
Reducing the daily, weekly, or monthly benet amount.
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THE MARYLAND LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM
Additionally, a long-term care insurer may voluntarily oer you other ways to
reduce the impact of a premium rate increase by including options in the policy
to lower the ination protection rate, or by providing an option to reduce the
ination protection from compound to simple ination. Before you make any
decision involving reduction of benets, you should understand the long term
impact of doing so.
Q: WHAT DOES THE MIA DO WHEN IT RECEIVES A REQUEST FROM
AN INSURANCE COMPANY TO CHANGE ITS LONG-TERM CARE
INSURANCE PREMIUM RATES?
e process to le a premium rate change request is as follows:
1. All insurance carriers doing business in Maryland’s individual and group
long-term care insurance market must submit premium rate change
requests to the MIA through the System for Electronic Rate and Form
Filing (SERFF).
2. After an MIA analyst conrms that all required documents have
been submitted, the ling is assigned to an initial reviewer. For a
detailed description of the initial review process, see the MIA’s
power point entitled, “Long-Term Care Insurance Rate Review
Process-Maryland” (October 27, 2016), available online:
http://insurance.maryland.gov/Consumer/Documents/agencyhearings/Long-
Term-Care-Insurance-Rate-Review-Process-SarahLi.pdf.
3. After completing an initial review, the initial reviewer provides a rate
review summary form to all other MIA actuarial sta for peer review.
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THE MARYLAND LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM
4. After peer review is completed, a public hearing may be conducted,
during which MIA sta, the long-term care insurer that has requested the
premium rate change, and consumers discuss the rate ling, and the long-
term care insurer responds to questions from the MIA sta regarding the
rate increase request.
5. After considering the information provided in the hearing, and any
additional public comments, the Insurance Commissioner makes a nal
decision to approve or disapprove the premium rate increase request.
MIA-LT-1 (11/19)
is consumer guide should be used for educational purposes only. It is
not intended to provide legal advice or opinions regarding coverage under a
specic policy or contract; nor should it be construed as an endorsement of any
product, service, person, or organization mentioned in this guide.
is publication has been produced by the Maryland Insurance Administration
(MIA) to provide consumers with general information about insurance-related
issues and/or state programs and services. is publication may contain
copyrighted material which was used with permission of the copyright
owner. Publication herein does not authorize any use or appropriation of such
copyrighted material without consent of the owner.
All publications issued by the MIA are available free of charge on the MIA’s
website or by request. e publication may be reproduced in its entirety
without further permission of the MIA provided the text and format are not
altered or amended in any way, and no fee is assessed for the publication or
duplication thereof. e MIA’s name and contact information must remain
clearly visible, and no other name, including that of the company or agent
reproducing the publication, may appear anywhere in the reproduction. Partial
reproductions are not permitted without the prior written consent of the MIA.
People with disabilities may request this document in an
alternative format. Requests should be submitted in writing
to the Chief, Communications and Public Engagement at the
address listed below.
200 St. Paul Place, Suite 2700
Baltimore, MD 21202
410-468-2000
800-492-6116
800-735-2258 TTY
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