Add South Dakota to the list of states waking up and realizing the value of Long-Term Care Insurance.

The South Dakota Department of Social Services is initiating a program to provide incentive to residents of South Dakota and is going so far as to encourage state residents to plan for their futures and has set up a South Dakota Long Term Care Partnership site.

Don Grimes, of the S.D. DSS, visited Yankton, SD to talk about the new program, called the South Dakota Long-Term Care Partnership Program, which is administered by the SD DSS. 

The basic premise of the program is to provide citizens needing long term care in the future (that means you today) an alternative to spending down or transferring assets by forming a partnership between Medicaid and private long-term care insurers, Grimes said.  Similar programs are being implemented across the country and are popular in states like Florida, New York, Indiana, Ohio, and Virginia.  It is important that you have a long term care specialist who is familiar with partnership plans, such as LTCtree (the site you're on now!).

"It's highly probable that you and I are going to need long-term care some time in our lives," he said.

Grimes said the program basically sets aside a "big pool of money" to pay for long-term care.

"It's going to pay for your care as long as there is money in the pool," he said.

He added that the rates don't increase as the plan's owner gets older. "They're supposed to stay the same your whole life," he said.  We'd like to add here that rates could increase, though they are designed to stay level throughout your life.

Grimes said the program is "very consumer-friendly" in that it can be used in all 50 states, and the plan-holder can specify the level of care desired by the consumer.

Partnership policies are currently available from a group of providers listed at the South Dakota Division of Insurance's Web site.

Grimes went on to say that long-term care insurance differs from regular health insurance because it "is not trying to 'cure' you - it's trying to keep you alive day by day."  For more information on long term care insurance, check our home page that covers long-term care information and more.

The Myth of Medicaid

While many people in South Dakota and around the country assume that Medicare and Medicaid cover the costs of long-term care, Mr. Grimes said this isn't the case.  Medicaid is a welfare program that has strict requirements for assets.  Similarly, Medicare does not cover custodial care, which is often required in long-term care cases, or long-term care itself, he said. In addition, while Medicaid does pay for long-term care, it does not pay for custodial care, he said.

Grimes said that many people are required to sell off their assets after being in either program for a long time.

However, the state partnership program works differently, he said.

"If you use up all the money in the pool and you still need care, the state will set aside the amount of assets that are equal to what your plan paid out," he said.

Grimes said people should investigate long-term care insurance as soon as possible, because insurance companies won't cover someone after they've become sick.

"You've got to get it before you need it," he said.