New Law- New Long-term Insurance Program

Posted on 17. Apr, 2013 by Stephan Helgesen in Healthcare, NM, Politics

New Law- New Long-term Insurance Program Would Allow New Mexicans to Keep More of their Assets While Qualifying for Medicaid- takes effect June 14, 2013

The law:

  • Gives New Mexicans more choice to do with their own money
  • Incentive allows estate to retain value of policy that could be passed to heirs
  • Saves Medicaid program when people are on private insurance.

(Santa Fe)  It is now law. A person does not necessarily have to be destitute in order for  Medicaid to pay  their nursing home expenses.

Freshman Senator Lee S. Cotter (R-Las Cruces) sponsored SB 196- Long Term Care Insurance Partnership and it has been signed into law.

It allows New Mexicans with private nursing home insurance to be able to exempt the amount of their insurance benefit from the amount of assets they can retain in order to qualify for Medicaid. They could still qualify for Medicaid if their assets total only $2,000. The amount of the insurance benefit would be separated out and would not be taken into consideration for qualifying purposes.

“New Mexicans who have invested in long-term care insurance will have more choices in how to spend their own money.  They will not have to spend their assets, including their insurance benefit, down to that last $2,000 in order to qualify for Medicaid if they need to go into a nursing home,” Senator Cotter said. “

They can keep amount of their insurance benefit and use it how they like.  They can use it to improve their lives while in a nursing home or they can leave their assets to their heirs.  The value of the insurance benefit is theirs to spend it as they see fit.”

Senator Cotter said the new law, which will go into effect June 14, 2013, will also help save the federal Medicaid program dollars. He said New Mexicans will appreciate the incentive of purchasing their own private insurance and might not ever go on the federal program. Others would have to be on the federal program, until their private insurance is exhausted.

Senator Cotter said the long-term insurance incentive program has been passed by 42 other states. Senator Cotter reiterated, “The program allows New Mexicans to have a choice. It gives them an incentive to save assets and provide for their long term health care instead of forcing New Mexicans to reduce their assets to $2,000 before they can apply for Medicaid.”

He said it modifies Medicaid eligibility rules by requiring that, individuals’ assets counted when considering Medicaid eligibility, exclude the amount of qualified long-term care insurance. The lower the “counted assets” the higher the chance the person will qualify for Medicaid.

SB 196 requires that the Human Services Dept. (HSD) modify the state Medicaid Plan and create a long-term health insurance partnership program in consultation with the Superintendent of Insurance to give incentives for individuals to obtain long term care insurance.

This was submitted by the New Mexico Senate Republican Office. For more information, contact: Diane Kinderwater at


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