Long Term Care Insurance Partnership Plans
Added Protection Ideally Suited For Middle-Income Americans
The Deficit Reduction Act (DRA) which was signed into law on February 8, 2006, included section 6021. This provision authorized states to offer special Medicaid asset disregards for persons purchasing and using qualified private long term care insurance policies -- which have come to be known as 'Partnership' policies.
The Long Term Care Partnership Program is a joint federal-state policy initiative to promote the purchase of private long term care insurance. The Partnership Program is intended to expand access to private long term care insurance policy to pay for long term care services.
Purchasing a Partnership-qualified (PQ) long term care insurance policy provides an added benefit. This benefit is described as “dollar-for-dollar” asset disregard or “spend down” protection. Individuals who purchase a PQ policy 'earn' one dollar of Medicaid asset disregard for every dollar of insurance coverage paid on their behalf.
Here's an example. Stephanie buys a PQ policy and needs care one day. Her policy pays out $150,000 of insurance claim benefits. Stephanie earns a Medicaid asset disregard that allows her to keep an additional $150,000 over the asset level she would otherwise have to meet in order to be eligible for Medicaid coverage. The Partnership Program also protects those assets after death from Medicaid estate recovery.
Long-Term Care Insurance Partnership Information Center
- What Is The LTC Partnership Program ?
- Partnership State Status - 50 State Update
- What People Pay For Partnership Insurance Protection
- How Much Long-Term Care Insurance Do Partnership Buyers Purchase?
- Frequently Asked Questions About Long-Term Care Insurance Partnership
If you would like to be connected with a designated long term care insurance specialist call the Association at 818-597-3227 or Click here to complete our simple online questionnaire.
What Is The Long-Term Care Partnership Program?
In the late 1980s, the Long Term Care Partnership Program was initiated as a demonstration project with funding received from the Robert Wood Johnson Foundation. Four states (California, Connecticut, Indiana and New York) were the original four states selected to participate.
Connecticut became the first state in which PQ policies were offered for sale in 1992. A year later (1993), Congress enacted legislation (OBRA 93) that all but prevented additional states from operating a Partnership program unless their Medicaid State Plan Amendment (SPA) had been approved before May 14, 1993.
The Deficit Reduction Act (DRA) (2006) authorized states to offer Partnership policies and since that time a number of states have undertaken the legislative requirements to implement the program for their residents. The Long Term Care Partnership Program is not a uniform program in all states.
Experts point of that there is more uniformity across DRA Partnership states than across the four original Partnership states. They note, however, that the new DRA states still face a series of decisions in designing their Partnership programs.
What States Have Approved Long-Term Care Partnership Insurance For Sale
The table below shows the latest status based on information provided to the Association. We note that status may change. (Last updated March 2014)
Effective Date -- The date that the U.S. Department of Health & Human Services approves the State Plan Amendment. Original Partnership indicates one of the four original Partnership States.
Reciprocity -- Whether or not the State will honor partnership policies from other DRA partnership states when it comes to allowing asset disregard when filing for Medicaid. All DRA states plus New York, Indiana and Connecticut have reciprocity. California does not.
|State||Effective Date||Policy Reciprocity|
|Alabama||03/01/2009||Yes||Alaska||Not Filed||---||Arizona||07/01/2008||Yes||Arkansas||07/01/2008||Yes||California||Original Partnership||No||Colorado||01/01/2008||Yes||Connecticut||Original Partnership||Yes||Delaware||11/01/2011||Yes||District of Columbia||Not Filed||---||Florida||01/01/2007||Yes||Georgia||01/01/2007||Yes||Hawaii||Pending||---||Idaho||11/01/2006||Yes||Illinois||Pending||---||Indiana||Original Partnership||Yes||Iowa||01/01/2010||Yes||Kansas||04/01/2007||Yes||Kentucky||06/16/2008||Yes||Louisiana||10/01/2009||Yes||Maine||07/01/2009||Yes||Maryland||01/01/2009||Yes||Massachusetts||Proposed||---||Michigan||Work stopped||---||Minnesota||07/01/2006||Yes||Mississippi||Not Filed||---||Missouri||08/01/2008||Yes||Montana||07/01/2009||Yes||Nebraska||07/01/2006||Yes||Nevada||01/01/2007||Yes||New Hampshire||02/16/2010||Yes||New Jersey||07/01/2008||Yes||New Mexico||Not Filed||---||New York||Original Partnership||Yes||North Carolina||03/07/2011||Yes||North Dakota||01/01/2007||Yes||Ohio||09/10/2007||Yes||Oklahoma||07/01/2008||Yes||Oregon||01/01/2008||Yes||Pennsylvania||09/15/2007||Yes||Rhode Island||07/01/2008||Yes||South Carolina||01/01/2009||Yes||South Dakota||07/01/2007||Yes||Tennessee||10/01/2008||Yes||Texas||03/01/2008||Yes||Utah||Not Filed||---||Vermont||Not Filed||---||Virginia||09/01/2007||Yes||Washington||01/01/2012||Yes||West Virginia||17/01/2010||Yes||Wisconsin||01/01/2009||Yes||Wyoming||06/29/2009||Yes|
What People Pay For Long-Term Care Partnership Insurance Protection
The following is summarized from a report published by the New York State Long-Term Care Partnership (2012 report).For ages 50 to 54 the range in policy costs ran from $1,384-per-year to $11,667 per-year.
For ages 55 to 59 the range in policy costs ran from $1,756-per-year to $12,864 per-year.
For ages 60 to 64 the range in policy costs ran from $1,863-per-year to $9,490 per-year.
For ages 65 to 69 the range in policy costs ran from $3,321-per-year to $10,002 per-year.
The range reflects the policy benefits selected by individuals as well as their health status when applying for insurance coverage. However, the 2014 Long-Term Care Insurance Price Index conducted by the American Association for Long-Term Care Insurance finds a spread of between 40-and-100 percent between prices charged for virtually identical coverage. This makes comparison shopping especially important today.
Frequently Asked Questions About The Long-Term Care Partnership
QUESTION: If a woman buys a partnership-eligible policy in Massachusetts, would it still qualify for the Medicaid protection if she moves to South Carolina?
ANSWER: Yes (the general rule).
QUESTION: Do states with partnership policies tend to have reciprocity?
ANSWER: Yes - there are some exceptions with the original 4 Partnership states (California in particular). The original 4 states are exceptions to every rule. CT does allow reciprocity if the client’s new state also does. IN allows reciprocity if the clients new state does. Only dollar-for-dollar method. NY allows reciprocity – dollar for dollar method CA – does not allow reciprocity.
QUESTION: Do most states require Partnership policies have 5% compound inflation protection, or do some allow 3% or Guaranteed Purchase Options?
In most states any Compound COLA is OK under the age of 61. From 62-75 it can be any automatic cost of living rider and after age 75, nothing is required. The 61-62 age can vary but 75 is typically the cut off for a required COLA rider. In most states the GPO does not qualify the policy for partnership.
Again, the original 4 are exceptions from the rules
California: 5% Compound required to age 70. After age 70, client can opt for 5% Simple.
Connecticut: 5% Compound required at all ages. Under 65 benefits can inflate but discuss with a specialist the available options.
Indiana: 5% Compound inflation protection is required to earn total asset protection. 5% simple for buyers ages 75 and older earns a dollar for dollar only or CPI at any age up (earns dollar for dollar only).
New York: 3% or 5% Compound at ages 79 and younger.
QUESTION: Does an individual need to specifically ask for a Partnership-eligible policy, or do most policies qualify as long as they have the required inflation protection and any other policy details?
ANSWER: It's Not A Simple Yes or No (of course)
If the policy has been filed as a Partnership policy and the client purchases the appropriate COLA rider, he/she will automatically receive a Partnership policy. The original four Partnership states require a separate policy form.
Other states generally do not have separate policy forms. The policyholder receives a letter (along with the policy delivery) that states their policy qualifies as Partnership. It is important to note that not all carriers have filed their policies as Partnership in all States.
How Much Long-Term Care Partnership Insurance Protection Do Partnership Buyers Purchase ?
Almost all DRA Partnership policies are 'comprehensive' paying for qualifying care in the policyholder's home or a skilled nursing facility. Benefits are typically expressed in dollars. The following is from a report (January 2014).Maximum Policy Benefit
Less than $109,599: 10%
$109,600 - $146,099: 8%
$146,100 - $182,599: 12%
$182,600 and above: 54%
The following is summarized from a report published by the California Long-Term Care Partnership (April - June 2013 report).Daily Benefit Average (Cumulative for all policies)
$170 per-day: 11.28%
$180 per day: 35.50%
$190 per day: 00.89%
$200 per-day: 31.00%
$210 per day: 00.60%
$220 per day: 03.44%
$230 per-day: 02.87%
$240 per day: 01.21%
$250 per day: 08.03%
Balance are over $250 per-day More than $200: 11%
If you are ready to find out whether you can health qualify for long-term care insurance and to see what coverage costs start the process. Click here to complete our simple online questionnaire and be connected with an expert in your area there is never any obligation and the information is free.