What is Partnership Long Term Care Insurance?
A partnership long term care insurance program allows individuals who have purchased an LTCi policy and have exhausted the policy benefits, to protect some of their assets from Medicaid/Medical spend down requirements (i.e., the requirement that Medicaid recipients be legally destitute before receiving benefits).
The states are using the program to encourage the sale of private Long Term Care insurance in order to decrease the pressure on state Medicaid budgets. The program hoped to attract lower- to middle-income earners since they are most likely to turn to Medicaid but surprisingly it attracted higher-income Americans as well.
Originally the program was pilot in 4 states - California, Connecticut, Indiana and New York. However, given the high success of the program in the initial four states, as part of the Deficit Reduction Act of 2005 (DRA) the program was expanded. Now, ALL states are allowed to provide Partnership policies through The Deficit Reduction Act of 2005. DRA 05 also directed the U.S. Department of Health and Human Services (HHS) to draft a reciprocity agreement, which is optional for states. This reciprocity agreement allows claimants to use their policies in other Partnership states.
How do LTCI Partnership Policies differ from other Long Term Care Insurance Policies?
There are two significant differences between Parternship and non-parternship policies.
- Partnership policies carry an endorsement from the state that they meet minimum standards in terms of policy benefits.
- Partnership policies include a feature known as Medicaid Asset Protection. Protected assets will be disregarded for the purposes of determining financial eligibility for Medicaid, if an individual needs to apply for Medicaid to help pay their long-term care bills. Only Partnership policies provide Medicaid Asset Protection.
Are the features of a LTCI Partnership Policy different from other Long Term Care Insurance Policies?
Features of a Partnership Long Term Care Insurance policy vary by state; however, each state requires a minimum daily benefit amount, a minimum benefit period (usually 3 years) and mandate that the policies include inflation protection at younger ages.