State Approved Long Term Care Partnership Policies

** Read Rich & Margaret’s article on Partnership policies in this website**

Partnership Long-Term Care Insurance policies look and act the same as any other LTC policy! However, they provide additional asset protection as a reward for people who have planned in advance for the cost and burdens long-term care places on our family and finances.

The first four states to adopt partnership policies were California, Indiana, New York, and Connecticut, collectively known as the original partnership states. Today, 45+ states have active partnership plans in place. The Federal Budget Deficit Reduction Act of 2005, signed into law by President George W. Bush, gave the states the authority to set up partnership programs to encourage and reward consumers who purchased qualified Long-Term Care Insurance by giving them an added layer of asset protection.

As part of the 2005 Deficit Reduction Act, the Long-Term Care Partnership Program (LTCP) has emerged as a way to help both the States and consumers address the high costs of long-term healthcare. Indiana, Connecticut, California and New York were the first States to help lay the groundwork for this unique partnership between a State’s Insurance Division, the State’s healthcare authority and the insurance carrier that allows a consumer who has a qualified Partnership Long-Term Care Policy to protect their assets that would otherwise be spent-down and still qualify for their State’s Medicaid Long-Term Care benefits without the full exhaustion of assets.

These partnership program allows for the policyholder that has a qualified Partnership policy to have “asset-disregard” that gives the benefit of  "dollar-for-dollar asset protection" in order to help one protect their assets while still qualifying for Medicaid if it came to that. 

Clear benefits of a Long-Term Care Partnership Policy

The state will disregard the total amount of benefits paid by your partnership policy in the calculation for Medicaid Long-Term Care benefits. This way, no matter what happens or how long your extended care event lasts, you will never fully exhaust your assets. It also protects your estate from any subsequent recovery by the state for receipt of Medicaid-paid services. These partnership policies require certain benefit levels and inflation options depending on the state of residence at the time of purchase.

Under most circumstances, if you need Medicaid to pay for long-term care services, you must satisfy the income and asset eligibility levels for Medicaid. For many, this means a spend-down of their assets before Medicaid will allow them to apply. With a partnership policy, the amount of assets that may be disregarded is equal to the amount of long-term care benefit paid out of the policy prior to the time you apply for Medicaid. 

As a result, you may be able to receive coverage under Medicaid without first being required to exhaust your resources. Furthermore, the amount that may be shielded from estate recovery would be equal to the amount of assets disregarded for purposes of eligibility for long-term care Medicaid benefits. For many people, the extra asset protection is a crucial ingredient to safeguard assets from the high costs of extended long-term care.

The partnership program does allow you to custom design a Long-Term Care policy based on the amount of savings and investments you own and while Medicaid is never someone first option, it gives one choices and peace-of-mind to protect assets.

Contact Us To Learn More