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Aged, Blind and Disabled Manual Policy Manual Number: 125.025 Section: Institutional Medicaid Chapter: Long-Term Care Partnership

March 18, 2019 Division of TennCare 4 b. Example 2: LTCP Benefits have been Exhausted While Institutionalized Individual is Receiving TennCare Medicaid Some individuals may request Medicaid payment of LTC services before LTCP benefits are exhausted when: The LTCP policy does not cover all LTC needs, and the person’s income and resources are not sufficient to pay the LTC expenses that are not covered by the LTCP policy. Joan and Beth are sisters. Both receive home care services that are partially covered by their separate qualified $20,000 LTCP policy. They have both used $10,000 of their policy benefits and each has $3,000 in separate savings accounts. Neither has enough income or resources to pay for their daily services that are not covered by their LTCP policies. Joan and Beth both apply for and are eligible for TennCare Medicaid through HCBS. Their LTCP policies are treated as third party liability and Medicaid pays for services not covered by the LTCP policies. When applying for and while receiving TennCare Medicaid, they each own the following assets: a $3,000 savings account; a home with an equity value of $50,000; and a prepaid burial trust valued at $6,000 The savings account is the only countable resource and is a disregarded asset. The home and burial trust are excluded resources. Joan dies after using another $5,000 of LTCP benefits, for a total expenditure of $15,000. Although she did not benefit from the full value of the policy ($20,000), the policy is considered exhausted and $15,000 of her assets may be protected from estate recovery. The $3,000 savings account and $12,000 from the value of the house will be protected from estate recovery. Beth exhausts the remaining $10,000 of her LTCP policy benefits during her first six months of receiving TennCare Medicaid. Because the full $20,000 of her LTCP benefits has been exhausted, TennCare Medicaid now pays for services that were previously covered by her LTCP policy. Beth may protect $20,000 from estate recovery. At Beth’s death, the $3,000 in the savings account and $17,000 from the value of her house will be protected from estate recovery. 7. LTCP and Third Party Liability When an individual has an LTCP insurance policy and applies for TennCare Medicaid prior to exhausting all LTCP benefits, the individual or his representative shall be informed that: a. The insurance policy must be assigned to the nursing home or HCBS lead agency; b. Any payments received from the LTCP policy must be assigned to the nursing home in which the individual is a resident or to the HCBS lead agency; c. The nursing home or HCBS lead agency will collect any payments made on the benefit of the patient prior to billing TennCare; and d. TennCare Medicaid is the payor of last resort.