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What Is The Long-Term Care Partnership Program ?
As the number of elderly Americans increases, long-term-care needs and costs are likely to grow. Many believe that private long-term-care insurance can and should play a more significant role in the financing of home care and nursing home services. Wider use of such insurance could shift the burden from individuals, who are often ill-prepared to pay for such care out-of-pocket, as well as from state Medicaid programs, which often serve as a default financier of long-term-care services.
One vehicle for encouraging consumers to invest in LTC insurance is the expansion of the Partnership for Long-Term Care, a unique insurance model developed in the 1980s with support from the Robert Wood Johnson Foundation (RWJF).
Through the Partnership program states promote the purchase of private LTC insurance by offering consumers access to Medicaid under special eligibility rules should additional LTC coverage (beyond what the policies provide) be needed.
Medicaid, in turn, benefits by having individuals take responsibility for the initial phase of their long-term care through the use of private insurance.
The original demonstration model has been underway since 1992 in California, Connecticut, Indiana and New York. The Deficit Reduction Act (DRA) of 2005 lifted the technical barriers Congress had imposed on such programs, allowing for the expansion of the Partnership to other states across the country. ¹
Long-term care insurance policies that qualify as Parnership Policies may protect the policyholders's assets through a feature known as "Asset Disregard" under that state's Medicaid program. "Asset Disregard" means that an amount of the policyholder's assets equal to the amount of long-term care insurance benefits received under a qualified Partnership Ploicy with be desregarded for the purpose of determining the insured's eligibility for Medicaid. All other Medicaid eligibility criteria will apply and special rules may apply to persons whose home quitey exceeds $500,000.
With the exception of a few, most states have implemented a Partnership or are in some stage of implementation. Each state has their own mandatory LTC training requirements. All producers/agents must complete their state's training course before selling long-term care insurance, regardless of whether or not it is a Partnership policy.
¹ Source: The American Association for Long-Term Care Insurance
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