State Partnership Long-Term Care Insurance Programs
A Partnership Program is a collaboration or .partnership. among a state government, the private insurance companies selling long-term care insurance in that state, and state residents who buy a traditional long-term care or HomeLTCi Partnership policies. (also see video above on CashBridging. State Partnership policies) The purpose of the Partnership program is to make the purchase of shorter term more comprehensive long-term care insurance meaningful by linking these special policies (called Partnership qualified or PQ policies) with Medicaid for those who continue to require care.
Partnership qualified policies must meet special requirements that can differ somewhat from state to state. Most states require Partnership policies to offer comprehensive benefits (cover institutional and home services), be Tax Qualified, provide certain specific consumer protections, and include state specific provisions for inflation protection. Often the only difference between a partnership qualified policy and other long-term care insurance policies sold in a state is the amount and type of inflation protection required by the state.
Partnership policies must be certified by the State as meeting the specific requirements for the Partnership Program. State insurance departments are responsible for ensuring that individuals who sell Partnership policies are trained and understand how these policies relate to public and private coverage options.
A Partnership qualified policy provides you, as the purchaser, with the right to apply for Medicaid under modified eligibility rules that include a special feature called an .asset disregard.. This allows you to keep assets that would otherwise not be allowed if you need to apply, and qualify, for Medicaid in order to receive additional long-term care services. The amount of assets Medicaid will disregard is equal to the amount of the benefits you actually receive under your long term care Partnership qualified policy. Since these policies must include inflation protection, the amount of the benefits you receive can be higher than the amount of insurance protection you originally purchased. If you have a Partnership-qualified long term care insurance policy and receive $100,000 in benefits, you can apply for Medicaid and, if eligible, retain $100,000 worth of assets over and above the State.s Medicaid asset threshold. In most states the asset threshold is $2,000 for a single person. Asset thresholds for married couples are typically more generous.
The following is an example of how a Partnership Qualified policy works. Let's say John, a single man, purchases a Partnership policy with a value of $100,000. Some years later he receives benefits under that policy up to the policy.s lifetime maximum coverage (adjusted for inflation) equaling $150,000. John eventually requires more long-term care services, and applies for Medicaid. If John's policy was not a Partnership-qualified policy, in order to qualify for Medicaid, he would be entitled to keep only $2,000 in assets.
He would have to spend down any assets over and above this amount. However, because John bought a Partnership-qualified policy, if he needs to apply for Medicaid and is deemed eligible, he can keep $152,000 in assets and the State will not recover those funds after his death. However, any assets John has over and above the $152,000 would have to be spent in order for him to be eligible for Medicaid. He would also have to satisfy the income, general eligibility and functional eligibility requirements for Medicaid before he can qualify.
Partnership programs help both individuals and the state. For individuals, it allows them to get and pay for services they need without having to spend all of their assets. For the state, it can decrease the amount of Medicaid dollars used for long-term care services.
Some Important Considerations for Consumers
. It is important to know if the long-term care insurance policy you buy is a Partnership qualified policy or not, since they can be the same as non-Partnership policies. A Partnership qualified policy is one that is certified by the State, and it must include the level of inflation protection coverage set by the State. Only if you have a Partnership policy will you be eligible for an asset disregard if and when you apply for Medicaid. . Policies issued prior to a state Partnership Program.s effective date will not be considered Partnership-qualified; however there are circumstances under which you may be able to exchange a policy you previously purchased for one that is Partnership qualified. . It is important to buy your Partnership qualified policy from an agent who is specially trained to sell that type of coverage. States with Partnership Programs have additional educational requirements for agents who wish to sell Partnership policies. . It is important to note that eligibility for Medicaid is not automatic. You must still apply and meet the income, functional and general eligibility requirements of the Medicaid program in your state. The long-term care services provided by Medicaid vary by state and may not be the same as the services you are eligible to receive under your private Partnership long-term care insurance policy (for example, many state Medicaid programs do not pay for room and board costs in an Assisted Living Facility even if you are also receiving personal care). . States that have Partnership programs are automatically considered to have .reciprocity. with each other and to honor the asset disregard you earned under a Partnership policy you purchased in a different state. However, States can .opt out. of this requirement at any time.
Which States Have Partnership Programs?
The map below shows which states have implemented Partnership programs and are offering long-term care Partnership policies as of August 15, 2008. There are numerous other states in the process of implementing these programs. We will update this map with those states when they have fully implemented programs. If you want more information on your State.s program including which insurance agents are selling Partnership policies, or if you want to find out if your State is planning to offer a Partnership program, contact your State.s Department of Insurance.
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