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Home > Consumers > Long-term care
Long-term care
The decision to purchase long-term care insurance is a very important financial decision that should not be rushed. Resources available to assist you in making this decision include: the "Shopper's Guide to Long-Term Care Insurance"* and the State Health Insurance Counseling (SHIC) program*.

For more detailed information, a copy of the Shopper's Guide or information on how to reach a State Health Insurance counselor, please contact the Insurance Department at 1-800-247-0560 or email us at insurance@nd.gov.

*State regulations require that you receive the Shopper's Guide and written notice of the SHIC program when you are offered a long-term care policy.

Long-term care can range from simple help with daily activities at home to highly skilled nursing care in a nursing home.

Long-term care can be expensive depending on the amount and type of care needed and the setting in which it is provided. The average cost for a year in a nursing home in North Dakota is more than $71,000.

Medicare, the federal health insurance program for people over 65 and some disabled people, covers nursing home care only under extremely limited circumstances. DO NOT DEPEND ON MEDICARE TO PAY FOR ANY NURSING HOME CARE.

Four things to consider before you buy:
  • Do I have enough income to pay my own way without insurance?
  • Is it reasonable to spend my own money, delete my assets and then apply for Medicaid?
  • Is there any reason to preserve my assets for heirs?
  • Do I have enough income to pay a portion of the nursing home costs and then rely on a small long- term care policy for the remainder?
NOTE: If purchasing long-term care insurance strains your budget you should consider other alternatives for covering the cost of care you may require.

If you decide to purchase long-term care insurance:
  • Take your time and compare several policies before buying. You may want to check with several companies and agents. (Some agents may sell for more than one company).
  • Ask questions and be sure you understand what the policy covers and when.
  • When you receive the policy READ IT CAREFULLY to be sure you understand all the terms and conditions. What is written in the policy is what will determine the benefits you receive. From the time you receive the policy you have 30 days to review it and return it for any reason and for a full refund of premium paid. If you return a policy, return it to the company, not the agent.
  • Always pay by check (not cash) payable to the company.
  • Do not submit to high pressure tactics.
  • Don't buy more than one policy. If you have a policy and feel you need more coverage, check to see if the company will allow you to increase your coverage.
  • Be sure you get the agent's name, address and telephone number.
  • Be sure the insurance company's product is approved for sale in ND. Call 1.800.247.0560 for company licensing and rating information or email us at insurance@nd.gov.
Tax credit

House Bill 1209 was passed during the 2009 legislative session. The bill provides a tax credit up to $250 for individuals paying premiums on a partnership-qualified long-term care insurance plan purchased on or after Jan. 1, 2007. The credit is effective for taxable years beginning after Dec. 31, 2008.

The tax credit appears on line 16 of Schedule ND-1TC. You are allowed a tax credit for premiums you pay for a partnership plan long-term care insurance policy that covers you or your spouse, or both. To qualify, you must be a North Dakota resident at the time you pay the premiums.

A partnership plan policy is a special type of long-term care insurance policy that:
  • Meets specific consumer protection and federal income tax law requirements,
  • Is recognized by North Dakota for Medicaid benefit purposes, and
  • Provides the proper inflation protection based on the insured individual's age at time of purchase.
An insurance company is required to provide you with a notice certifying the policy as a partnership policy at time of issuance. Upon audit, you must be able to provide a copy of that notice (or a more current notice, if requested) to support the credit claimed.

Important: There are long-term care insurance policies that ARE NOT partnership plan policies for which the premiums are not eligible for this credit. Therefore, you must check your policy or contact your insurance company to confirm that it is a partnership plan policy.

The credit is equal to the premiums you paid during the tax year, up to a maximum credit of $250 (or $500, if both you and your spouse are insured by the policy).

For more information, contact the Office of the State Tax Commissioner at 701-328-7088.
There are three primary ways of paying for long-term care services:
  1. Use your income and savings to pay for the care and services you need. People with substantial income, assets or savings may be able to cover all costs from their own resources.
  2. Use your income and savings until you qualify for Medicaid. Medicaid, or Medical Assistance, is a combination, federal, state and local program that covers nearly half of all nursing home care nationally. To receive Medicaid assistance for a nursing home stay, you must meet certain financial eligibility requirements. Note:ND provides some protections for married couples when one spouse must enter a nursing home. For eligibility questions or applications, contact your local county social service office.
  3. Buy a long-term care insurance policy to cover some or all of the costs for long-term care.
Private long-term care insurance is an option for people to consider, particularly if they have assets they wish to protect (e,g, to pass on to their children). You should not buy this type of insurance unless you can afford to pay the premiums every year. Remember, long-term care insurance premiums can and often do go up. Long-term care insurance policies are designed to provide coverage for the most catastrophic expense of long- term care which is room and board in a nursing home.

Many long-term care policies provide benefits in addition to coverage for a nursing home stay. Policies may provide coverage for in-home care, assisted living, adult day care and other alternatives. Long-term care insurance is not standardized and there is no guarantee of coverage. Based on your answers to questions about your medical history, a company can choose whether or not to sell you a policy. Benefits available under a long-term care insurance policy vary widely. The premium depends on a number of factors including the benefits you select and your age at the time of purchase.
 
Long-term care partnership brochure
ltcpartnershippalmcard.pdf


North Dakota Insurance Department
600 E. Boulevard Ave.
Bismarck, ND 58505-0320
Phone 701.328.2440
Toll free 800.247.0560
Fax 701.328.4880

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