The Partnership for Long Term Care

"The Partnership for Long Term Care" program was designed to encourage individuals to purchase qualified long term care (LTC) insurance policies which would allow them to protect some or most of their assets from the spend-down requirements of Medicaid.

Long Term Care Insurance Partnership Programs are a joint effort between private insurance companies and the government. The Long Term Care Partnership Program was established in an effort to relieve the burden on the Medicaid system caused by the continually increasing need for long term care (LTC). The purpose of the program is to make the purchase of shorter-term, more comprehensive LTC insurance meaningful, by linking Medicaid with these special policies ("Partnership policies").

The 2005 Deficit Reduction Act

The signing of the 2005 Deficit Reduction Act (DRA) opened up the ability to create a Long-Term Care Partnership Programs to any state. Previous to the passing of the DRA only California, New York, Indiana, and Connecticut had Partnership Programs. Following the signing of the Deficit Reduction Act the states creating their own Long Term Care Partnership Programs continues to grow and now includes; Idaho, Kansas, Nebraska, South Dakota, Virginia, Colorado, Florida, Iowa, Minnesota, and North Dakota. The Program's goal is to expand the Partnership concept nationally, while having reciprocity and uniformity of plans across states.

How Partnership Policies Work

Partnership policies must meet special requirements not required of traditional policies (these different slightly state to state) and insurance companies cannot charge higher premiums for asset protection in Partnership Policies. The majority of states require that Partnership policies have the following characteristics:

• The Partnership policy must offer comprehensive benefits (cover nursing home, assisted living, and home healthcare services)
• The Long Term Care Partnership Policy must be Tax Qualified
• The Partnership Policy must include an annual 5 percent compound Inflation Protection feature

The Benefits of a Partnership Policy and an Example

Partnership policy holders are allowed to retain a greater share of their assets should they exhaust their long-term care insurance benefits and need to apply for Medicaid. This enables Partnership policy holders to avoid "spending down" their assets in order to qualify for Medicaid therefore preserving their hard-earned assets.

States use different methods for determining the amount of assets participants can keep but it's not unusual for a state to require a single individual to spend their countable assets (excluding their primary residence) down to a low level, for instance $2,000 before Medicaid will begin to cover their long-term care services. If that individual has a Partnership policy that provides a maximum of $100,000 in benefits and over time receives long-term care services under the terms of the policy, equaling $100,000 in benefits for long-term care services, their policy's benefit pool would be depleted. Because of the dollar-for-dollar asset protection provided by the Partnership program, for every dollar of benefits paid from the policy, a dollar of assets is protected from Medicaid spend down requirements. In this example, the individual could then apply for Medicaid and be allowed to keep $102,000 of his or her countable assets ($100,000 above the regular limit) because of the Partnership policy.

The LTC Connects Advantage

An LTC Connects Long Term Care Specialist can help you obtain partnership coverage. Only certain long term care insurance carriers can offer Partnership-approved policies and agents must be state certified in order to offer their clients Partnership policies.

LTC Connects Partners are state certified in states offering Partnership policies and can guide you in exploring your long-term care planning needs and assist you in obtaining a Partnership policy if appropriate. The question of whether long term care insurance is right for your situation, and if it is how to best select a plan, can be answered by an LTC Connects specialist, often in one phone call that lasts no more than 30 minutes. By taking just a few moments to request a long term health insurance rate comparison you will be on your way to making an important financial decision for you and your family.