The Garden State is soon to have its own health insurance Marketplace known as Exchange this coming Oct.1 2013 and it lets locals shop and buy insurance by phone, in person, or online. This will help promote health care in New Jersey and soon the number of uninsured locals will drop despite having high rates for care.
Based on Genworth Financial’s 2012 Cost of Care study, New Jersey has ranked as the state with the most expensive rates for assisted living facilities with its locals paying roughly $6,000 a month or $70,000 yearly. New Jersey also ranks fourth as the state with the most expensive nursing facilities in the country.
On the other hand, New Jersey has been considered as one of the few states with the lowest expenses for home health services given by a Medicare-certified home aide. As a matter of fact, hourly rates in southern New Jersey have had a decrease of 6% yearly for the last five years.
Average Costs of Long Term Care Services in New Jersey
To understand why an insurance policy is the best answer to long term care expenses, it’s important to realize the actual costs of care. The table below lists the average annual costs of care in the major areas in New Jersey. This information was taken from Genworth Financial’s 2010 Cost of Care survey.
Long Term Care Partnership Program in New Jersey
The federal Deficit Reduction Act of 2005 has applied changes to the federal Medicaid program and prohibited other states to establish long term care partnership programs after the approval of a state plan amendment forwarded to the Centers for Medicare and Medicaid Services or CMS.
The partnership is called New Jersey Long-Term Care Insurance Partnership Program or simply “Partnership Program”. It was authorized by CMS on February 12, 2008 with effective date of July 1, 2008. The program is administered by the New Jersey Department of Human Services with the New Jersey Department of Banking and Insurance. A partnership between the state government and private insurance companies to able to address long term care needs of the local residents of New Jersey.
By buying qualified policies from insurance companies participating in the Program, policyholders had been allowed to keep their assets aside from what is normally allowed during determination of Medicaid eligibility.
This asset disregard benefit allows the policyholder to protect assets equivalent to the insurance benefit amount paid by the Partnership policy. These assets are also protected from Medicaid estate recoveries if the policyholder passes.
Partnership Policy Requirements in New Jersey
Long Term Care insurance policies has to include the following features, as outlined in Bulletin No. 06-010 of the New Jersey Division of Insurance dated December 6, 2006 before getting considered as a Partnership policy:
- Product name displayed prominently and must include the word “Partnership”
- First page of the policy contains issue date, prominently displayed
- A statement certifying that the policy meets the definitions of a “qualified Long Term Care insurance” policy as outlined in section 7702B(b) of the Internal Revenue Code. The statement must be made by an officer of the insurance company.
- A statement certifying that reports will be made regularly to the Secretary of Health and Human Services. The statement must again be made by an officer of the insurance company and must include a notification when benefits are paid, and the payment amount; a notification as to when the policy terminates; and other information that may be required by the Secretary of Health and Human Services.
- A statement that the policy includes inflation protection. This feature provides protection against inflation. Policies are required to include compound inflation protection for individuals below age 61 whereas some type of inflation protection must be included in policies issued to individuals aged 61-75. Inflation protection is not required for individuals aged 76 and above.
- A statement certifying that the partnership policy will be marketed only by approved agents who underwent Partnership training.
- A list of agents approved to offer and market Partnership policies for the company.
Proposed amendments to New Jersey’s Long Term Care Insurance Rules outlined in N.J.A.C. 11:4-34 are getting drafted to facilitate implementation of the Partnership Program in New Jersey.
Among the proposals is Partnership Disclosure, such that Partnership policies must be accompanied by a Notice of Long Term Care Partnership Status (Appendix 2). This declares that the policy is a Partnership Policy, and outlines the benefits under the policy.
Request Free LTC Insurance Quotes in New Jersey
Find out how much a long term care insurance policy costs in New Jersey by filling up our free online assessment form. Compare costs from the top insurance carriers in the country and get information to help you prepare for your future long term care.