Some states have long term care insurance partnership programs designed to help people with the financial impact of spending down to meet Medicaid eligibility standards. Under these partnership programs, when you buy a specially approved insurance policy, you will receive protection against the normal Medicaid requirement to spend down your assets to become eligible.
The long-term care partnership program is a creation of federal law allowing states to alter their Medicaid program to allow assets to be disregarded based upon claims paid by qualified long term care insurance policies. Most states allow a dollar-for dollar asset disregard for claims paid on qualified partnership policies and will not require you to exhaust the benefits offered under the partnership policy in order to qualify for Medicaid. Under the partnership program, if you need additional coverage beyond what is provided by your qualified partnership policy, you can access Medicaid without depleting all your assets.
Benefits of the Partnership Program
- Partnership policies are tax-qualified plans under federal law, must contain certain consumer protections and must provide inflation protection benefits for purchasers so that benefits keep up with the cost of inflation over time.
- The long-term care partnership program provides an alternative to spending down or transferring assets by forming a partnership between Medicaid and private long-term care insurers.
- Once private insurance benefits are used, special Medicaid eligibility rules are applied if additional coverage is necessary.
Key Features of Long-Term Care Partnership Policies
- The policies must be tax-qualified plans. Policies must provide inflation protection:
- Those under age 61 at date of purchase must have compound annual inflation protection.
- Those at least 61 years of age but under the age of 76 must have some level of inflation protection.
- Those over the age of 76 may have but are not required to have inflation protection.
How Will I Know I Have Purchased a Partnership Policy?
If the policy you purchased is a partnership plan, you will receive written notice from the insurance company. Depending upon the state, it will be in one of the following ways:
- Your policy or certificate will be identified as a partnership policy in the policy itself either on the front page or on the schedule page of the policy.
- You will receive a letter from your insurance company advising you that you have purchased a partnership policy. If this is the only notification you receive, it is extremely important to keep this letter.
Please keep in mind that these programs have specific requirements in each state in which they are offered. Check with your state insurance department or counseling program to see if these policies are available in your state. Many states with long-term care partnership programs have information about them on their Web sites.