Planning for long-term care is a critical part of financial security, especially as healthcare costs continue to rise. For many Americans, the Long Term Care Partnership Program offers a unique solution, blending private long-term care insurance with Medicaid asset protection. But Which States Have Long Term Care Partnership Programs? This guide will provide you with a detailed overview.
The Long Term Care Partnership Program is a collaborative effort between state governments and private insurance companies. It was designed to encourage individuals to purchase private long-term care insurance by offering a significant benefit: asset protection should they ever need to apply for Medicaid to cover long-term care costs.
Understanding Long-Term Care Partnership Programs
The foundation for these programs was laid by the Deficit Reduction Act (DRA) of 2006. This federal legislation enabled states to create Long Term Care Partnership programs, offering what’s known as “dollar-for-dollar” asset disregard.
Dollar-for-Dollar Asset Disregard Explained
Imagine you purchase a Partnership-qualified long-term care insurance policy. If you eventually need long-term care and your policy pays out benefits, you effectively “earn” asset protection from Medicaid. For every dollar your Partnership policy pays out in benefits, you can protect a dollar of your assets when determining Medicaid eligibility.
For example, if your Partnership policy pays out $200,000 in long-term care benefits, you would be allowed to retain an additional $200,000 in assets beyond the standard Medicaid asset limits and still qualify for Medicaid assistance. This is a powerful incentive, allowing individuals to protect their savings and estates while planning for potential long-term care needs.
This asset protection also extends to estate recovery. Medicaid estate recovery is a process where the state seeks to recoup the costs of long-term care services from a recipient’s estate after their death. Partnership programs offer protection against this, ensuring that assets protected through the program are not subject to Medicaid estate recovery.
States with Approved Long-Term Care Partnership Programs
Since the DRA of 2006, many states have established Long Term Care Partnership Programs. While the programs share core principles, specific details can vary by state. Below is a table outlining the states with approved programs and their reciprocity status. Reciprocity refers to whether a state will recognize Partnership policies purchased in other DRA Partnership states for asset disregard purposes when applying for Medicaid.
| 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 |
Note: “Original Partnership” indicates states that were part of the initial pilot program. “Effective Date” refers to the date the program was approved by the U.S. Department of Health & Human Services. It’s important to note that program status can change, so always verify the most current information with your state’s Department of Health or a qualified insurance professional.
Cost of Long-Term Care Partnership Insurance
The cost of Partnership-qualified long-term care insurance policies varies based on several factors, including age, health, and the specific policy benefits chosen. Data from a New York State Long-Term Care Partnership report (2012) provides some insight into 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 are broad because policy costs are tailored to individual needs and the level of coverage selected. Furthermore, the American Association for Long-Term Care Insurance’s 2014 Price Index highlights significant price variations (40-100%) for similar coverage, emphasizing the importance of comparison shopping.
Frequently Asked Questions about Partnership Policies
Q: If I buy a Partnership policy in one state, and then move to another, will it still qualify for Medicaid protection?
A: Generally, yes, especially if moving between DRA Partnership states with reciprocity. However, there can be exceptions, particularly with the original four Partnership states. It’s crucial to confirm reciprocity rules for both your current and new state.
Q: Do most Partnership policies require inflation protection?
A: Inflation protection requirements vary by state and age. Many states require some form of inflation protection, especially for younger buyers, to ensure benefits keep pace with rising long-term care costs. Compound inflation protection is common, but specific requirements differ.
Q: Do I need to specifically ask for a Partnership-eligible policy?
A: Yes, you should explicitly ask for a Partnership-qualified policy to ensure it meets the specific state and federal requirements for asset protection. While some policies may automatically qualify, it’s best to confirm with your insurance agent or company. In some of the original Partnership states, separate policy forms may be used for Partnership-qualified plans.
Coverage Amounts in Partnership Policies
Most Partnership policies are comprehensive, covering care in various settings, including home care, assisted living, and nursing homes. Benefits are typically dollar-based. Data from a 2014 report indicates the following trends in maximum policy benefits purchased:
- Less than $109,599: 10%
- $109,600 – $146,099: 8%
- $146,100 – $182,599: 12%
- $182,600 and above: 54%
- Unlimited: 14%
California Long-Term Care Partnership data (2013) also shows daily benefit amount trends:
- $170 per day: 11.28%
- $180 per day: 35.50%
- $200 per day: 31.00%
- Over $200 per day: 11%
These figures illustrate the range of coverage amounts individuals choose when purchasing Partnership policies, reflecting diverse needs and financial situations.
Is a Long-Term Care Partnership Policy Right for You?
Long-Term Care Partnership programs offer a valuable tool for those seeking to protect their assets while planning for potential long-term care expenses. By purchasing a Partnership-qualified policy, you gain peace of mind knowing you have private insurance coverage and a safeguard against depleting your assets should you require extended care.
To determine if a Long-Term Care Partnership policy is suitable for your needs, it’s recommended to consult with a qualified long-term care insurance specialist. They can provide personalized guidance based on your state’s specific program rules and your individual financial situation.
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