Long-Term Care Insurance and Partnership Programs

The world of Long-Term Care Insurance (LTCI) is an ever-changing realm where the Federal Government, State regulators and Insurance agencies are working to present viable and beneficial options to millions of Americans. The LTCI partnership program’s historical roots began in the 1980s with legislation designed to encourage people who might otherwise turn to Medicaid to finance their long-term care. Until recently, these partnership programs only operated in four states: California, Connecticut, Indiana and New York.

With the passage of the Deficit Reduction Act of 2005 (DRA 05), many other states have adopted the requirements for a qualifying Long-Term Care Partnership Program policy. Currently, twenty two additional states have already enacted authorizing legislation: Arkansas, Colorado, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Maryland, Massachusetts, Michigan, Missouri, Montana, Nebraska, New Hampshire (pending), North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, Virginia & Washington.

If/when people who purchase these qualifying policies deplete their insurance benefits, they may then retain a specified amount of assets (usually equal to the face value of the insured’s contract) and still qualify for Medicaid, provided they meet all other Medicaid eligibility criteria. This is a dramatic difference from the current spend-down provision that reduces the client’s assets to 2,000 dollars before Medicaid eligibility begins.

Although opponents argue that this partnership program approach actually opens the door to more individuals qualifying for Medicaid while retaining more assets, proponents believe that the initial provision period they receive from LTCI and the time ‘cushion’ adequately compensate for this difference. Part of this argument in support of the program hypothesizes that many who utilize their LTCI will in fact recover before that time in which they would turn to Medicaid and be sheltered from the spend-down aspect and Medicaid parameters they would otherwise have faced. So far, the data from the original four states are inconclusive because the programs are still relatively new and few purchasers have begun to use the benefits. (Of the 172,477 initial contracts in the original four states, the number receiving partnership benefits is 1,209)*.

With the likely expansion of LTCI partnership programs across the county, consumer education is critical. Some vital issues include income eligibility requirements, functional eligibility and the ability to remain at home. This is where it is important to speak with a Long-Term care Specialist. It is important to address these relevant issues. Due to Medicaid’s income eligibility, some who have purchased or will purchase partnership policies may never qualify for Medicaid because their incomes are too high, even in retirement. Medicaid’s functional eligibility, or eligibility based on the insured’s functional capacities, may also be more restrictive than that of the partnership policy.

Finally the ability to remain at home is a major issue for most consumers, as Medicaid beneficiaries have no entitlement to continue to receive LTC services in their homes or in community-based settings, as provided for by their policy.
Therefore it behooves you as a client to educate yourself through a Long-Term care Specialist who understands what these products mean in providing for long-term care. A Long-Term care Specialist satisfies the Partnership Program training requirement and its continuing education. and understands the implications of these new programs, procedures and products.

Simplify your Long-Term care planning with Long Term Care Insurance Pros
To answer you immediate questions, just call 1-877-GO-4-LTCi (464-5824)