Understanding long-term care can be daunting, especially when considering how to protect your assets while ensuring access to necessary care. Long Term Care Partnership Programs offer a unique solution, blending private long-term care insurance with Medicaid asset protection. This guide, brought to you by carcodereader.store, your resource for informed decisions, will delve into which states offer these programs and what benefits they provide.
The concept of Long Term Care Partnership Programs emerged to encourage individuals to plan for their future care needs without depleting all their savings. Authorized by the Deficit Reduction Act (DRA) of 2006, these programs allow states to partner with private insurance companies to offer “Partnership-qualified” long term care insurance policies. These policies come with a special advantage: asset protection should you ever need to apply for Medicaid to cover long-term care costs.
Decoding the Long-Term Care Partnership Program
The Long Term Care Partnership Program is essentially a collaborative effort between state and federal governments and private insurance providers. Its primary goal is to broaden the reach of private long-term care insurance, making it a viable option for more Americans to fund their potential long-term care needs.
The core incentive of a Partnership-qualified (PQ) policy is the “dollar-for-dollar” asset disregard. Imagine it as “spend down” protection. For every dollar your PQ policy pays out in claim benefits, you get to protect a dollar of your assets if you later need to qualify for Medicaid.
Let’s illustrate with an example: Suppose Mark purchases a PQ policy and years later requires long-term care. His policy pays out $200,000 in benefits. Thanks to the Partnership program, Mark can shield an additional $200,000 of his assets beyond the standard Medicaid asset limits. This protected amount is disregarded when Medicaid determines his eligibility, and importantly, these assets are also protected from Medicaid estate recovery after his passing.
This feature is particularly attractive to middle-income Americans who want to safeguard their hard-earned savings while preparing for potential long-term care expenses.
The Evolution of Partnership Programs: From Demonstration to National Expansion
The seeds of the Long Term Care Partnership Program were sown in the late 1980s as a demonstration project funded by the Robert Wood Johnson Foundation. Initially, four states – California, Connecticut, Indiana, and New York – piloted these programs.
Connecticut led the way, offering the first PQ policies in 1992. In 1993, the Omnibus Budget Reconciliation Act (OBRA 93) was enacted, which inadvertently created a hurdle for new states wanting to join the Partnership program, unless their Medicaid State Plan Amendment (SPA) was approved before May 14, 1993.
A significant turning point arrived with the Deficit Reduction Act (DRA) of 2006. This act provided a clear pathway for states to implement Partnership programs. Since then, many states have adopted the necessary legislation to offer these programs to their residents. It’s worth noting that while the DRA brought about more uniformity, Partnership programs are not identical across all states.
Experts observe that DRA Partnership states exhibit greater consistency compared to the original four pilot states. However, states still have flexibility in designing certain aspects of their Partnership programs to best meet the needs of their populations.
Which States Currently Offer Long Term Care Partnership Programs?
The landscape of states offering Long Term Care Partnership Programs is constantly evolving. The table below, while based on information updated in March 2014, provides a historical overview of program status across different states. For the most current information, it is crucial to consult official state resources or a qualified long-term care insurance specialist.
Key Definitions in the Table:
- Effective Date: The date when the U.S. Department of Health & Human Services approved the State Plan Amendment, officially allowing the state to operate a Partnership program. “Original Partnership” denotes one of the initial four states.
- Reciprocity: Indicates whether a state will recognize Partnership policies issued in other DRA partnership states for asset disregard purposes when applying for Medicaid. Most DRA states, along with New York, Indiana, and Connecticut, have reciprocity. California is a notable exception.
| 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 |
Disclaimer: This table is for informational purposes and may not reflect the most up-to-date status. Always verify with your state’s Department of Health and Human Services or a qualified insurance professional for the latest information on Long Term Care Partnership Programs in your state.
Understanding the Costs of Partnership Insurance
The price of Long Term Care Partnership insurance is influenced by various factors, including your age, health, and the specific policy benefits you select. A 2012 report from the New York State Long-Term Care Partnership provides insights into the annual cost ranges:
- Ages 50-54: $1,384 to $11,667 per year
- Ages 55-59: $1,756 to $12,864 per year
- Ages 60-64: $1,863 to $9,490 per year
- Ages 65-69: $3,321 to $10,002 per year
These ranges highlight the impact of benefit choices and individual health status on premiums. Furthermore, the American Association for Long-Term Care Insurance’s 2014 Long-Term Care Insurance Price Index revealed a significant price variation (40-100%) for comparable coverage. This underscores the importance of comparison shopping to secure the best value.
Common Questions About Long-Term Care Partnership Programs
Q: If I buy a partnership policy in one state and move to another, will it still qualify for Medicaid protection?
A: Generally, yes, especially within DRA Partnership states. Reciprocity is a key feature. However, the original four Partnership states (California, Connecticut, Indiana, New York) have some exceptions. California notably does not offer reciprocity. Connecticut and Indiana allow reciprocity if the new state also participates, using the dollar-for-dollar method. New York allows dollar-for-dollar reciprocity.
Q: Do most states mandate 5% compound inflation protection for Partnership policies, or are options like 3% or Guaranteed Purchase Options allowed?
A: No, a strict 5% compound inflation is not universally required. Most states are flexible, especially for younger buyers. For those under 61, any Compound Cost of Living Adjustment (COLA) is typically acceptable. Between 62 and 75, any automatic COLA rider may qualify. After age 75, no COLA is usually mandated. Guaranteed Purchase Options (GPO) generally do not qualify a policy for Partnership status in most states. Again, the original four states have unique rules, often requiring 5% compound inflation, sometimes with age-based variations or alternatives like simple inflation.
Q: Do I need to specifically request a Partnership-eligible policy, or are most policies automatically qualified if they meet inflation protection and other criteria?
A: It depends on the state. In many states, if a policy is filed as a Partnership policy and includes the necessary COLA rider, it automatically qualifies. The original four Partnership states often use separate policy forms for Partnership-qualified plans. In other states, policyholders usually receive a letter confirming their policy’s Partnership qualification upon delivery. It’s crucial to verify that the insurance carrier has filed their policies as Partnership-eligible in your specific state.
Typical Coverage Amounts in Partnership Policies
Most DRA Partnership policies are comprehensive, covering care in various settings, including your home or a skilled nursing facility. Benefits are typically defined in dollar amounts. A January 2014 report provides insights into maximum policy benefit levels purchased:
- Less than $109,599: 10%
- $109,600 – $146,099: 8%
- $146,100 – $182,599: 12%
- $182,600 and above: 54%
- Unlimited: 14%
Data from the California Long-Term Care Partnership (April-June 2013) reveals common daily benefit amounts:
- $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%
- Over $250 per day: (Balance)
- More than $200 (Cumulative): 11%
These figures offer a glimpse into the coverage levels chosen by Partnership policy buyers, reflecting the diverse needs and preferences of individuals planning for long-term care.
Are you ready to explore if you qualify for long-term care insurance and understand the costs of coverage? Click here to complete our simple online questionnaire and connect with a knowledgeable expert in your area. There’s no obligation, and the information is provided free of charge. Making informed decisions about your future care is a crucial step towards peace of mind.
