More on New Jersey
The population of New Jersey is aging and they have instituted a program to tackle the problem of people needing Long Term Care and not having insurance coverage. They have set up the New Jersey Long Term Care Insurance partnership program between private industry and the State to encourage residents of New Jersey to prepare for their future long-term care needs. Awareness of the need for Long Term Care Insurance remains low in New Jersey, as in the rest of the country. Long Term Care Insurance covers the cost of services such as nursing homes, in-home care, and assisted-living care when one is unable to care for themselves and is not covered by regular health insurance and only by Medicaid if one qualifies, which can be difficult without exhausting all of your assets.
The New Jersey Long Term Care Partnership allows “individuals who purchase long-term care insurance policies that meet certain requirements specified by the DRA (“Partnership Policies”) to apply for Medicaid under special rules for determining financial eligibility and estate recoveries. These special rules generally allow the individual to protect assets equal to the insurance benefits received from a Partnership Policy so that such assets will not be taken into account in determining financial eligibility for Medicaid and will not subsequently be subject to Medicaid liens and recoveries.”
A recent study found that 7 in 10 Americans have made no plans for long-term care and many were not even aware of this type of insurance and what it covers. And, given that the Department of Health
and Human Services estimates that 2/3 of all Americans will need long-term care at some point after they pass age 65, this does, indeed, constitute a problem to be reckoned with. Many Americans, regardless of the State in which they live, are now at risk of having to exhaust their nest egg or rely on their children or another relative to care for them in retirement should they become unable to care for themselves.
Via the New Jersey Long Term Care Insurance Partnership, residents of New Jersey are able to purchase Long Term Care Insurance with a number of policy options that meet certain State-mandated criteria. New Jersey, like many states, aims to reward those who do their part in solving this problem of Long Term Care Insurance coverage by planning ahead and protecting themselves and their assets. Basically, it works like this: the Partnership program “enables people who purchase certain long-term care insurance policies to have more of their assets protected if they later need to have the state pay for their long-term care. For example, if you receive $100,000 in benefits under your long-term care insurance, you may be allowed to protect an additional $100,000 in assets at the time you apply for Medicaid/Medical Assistance through a feature known as “Asset Disregard” under New Jersey’s Medicaid program.”
Highlights and requirements of the Partnership Program include:
- Meet the requirements for being “tax-qualified” as defined in
Section 7702B(b) of the Internal Revenue Code
- Meet certain consumer protection requirements in
Section 6021(a)(1)(B)(5)(A) of the Deficit Reduction Act, which are taken from the NAIC model act of 2000
- Provide inflation protection if the person is under age 76:
- For issue ages under 61: If a policy is sold to a person under the age of 61, it must provide compound annual inflation protection. Inflation protection must be continued until at least age 66 to be considered meaningful protection allowing the policy to maintain Partnership status.
- For issue ages 61 through 75: If a policy is sold to a person aged 61 through 75, the policy must provide some level of inflation protection. Inflation protection must continue for the first five consecutive years following the date of purchase, or until age 76, whichever occurs first, to be considered meaningful protection allowing the policy to maintain Partnership status. After the first five years, a policy sold to a person aged 61 through 75 may, but is not required to, provide inflation protection to maintain Partnership status.
Cost of Long Term Care in New Jersey
With a monthly cost of $11,863, New Jersey is the 6th most expensive state for a private nursing home room in the country. These rates are increasing at an average rate of 3% every other year. It’s important to know the cost of long term care in New Jersey so you understand how much insurance you need to buy.
|Annual cost of care table NJ (based on 2018 estimates by Genworth Financial)
||PRIVATE NURSING HOME ROOM
||SEMI-PRIVATE NURSING HOME ROOM
||ADULT DAY HEALTH CARE
||ASSISTED FACILITY (PRIVATE ROOM)
||HOME HEALTH AIDE (44 HOURS WEEKLY)
|Atlantic City area
NJ Long Term Care Insurance Premium Costs
→ How much does long term care insurance cost in New Jersey?
The cost of long term care insurance premiums in NJ depends on your health history and age at the time you purchase the insurance. Premium rates tend to be lower when you are younger and healthy. Other factors that may influence the cost of LTC premiums in New Jersey include:
- Benefit period – this refers to the total amount of time (in years) throughout which the insurance policy will pay out benefits.
- Daily maximum benefit – refers to the maximum amount of money that a LTC policy will reimburse you for each day you receive care.
- Elimination period – this is the duration between when you start receiving care and when the policy starts paying for that care.
- Inflation protection – this feature ensures that the benefit dollars you receive, should you need long term care in the future, are adjusted to match the dollar value at the time of reimbursement.
→ Sample Calculations Of Long Term Care Premium Costs in New Jersey
These sample premium calculations assume that the policy applicant selects an elimination period of 90 days, a daily maximum benefit of $200, and a benefit period of 3 years.
At Age 50
- Single Male, Age 50, pays $1894 annually
- Single Female, Age 50, will pay $2,277
- Couple, each age 50, pays a combined $3,291 annually
At Age 55
- Single Male, Age 55, pays $1,967 annually
- Single Female, Age 55, will pay $2,381
- Couple, each age 55, pays a combined $3,308 annually
At Age 60
- Single Male, Age 60, pays $2,070 annually
- Single Female, Age 60, will pay $2,963
- Couple, each age 60, pays a combined $3,390 annually
At Age 65
- Single Male, Age 65, pays $2,627 annually
- Single Female, Age 65, will pay $4,496
- Couple, each age 65, pays a combined $4,453 annually
Premium costs for long term care insurance go up with age. It’s also evident that women tend to pay more regardless of the age bracket. Couples who pay for long term care jointly get discounts – up to 30% less than they would pay with individual policies.