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THE DETAILS:

What is a Long-Term Care Insurance Partnership Program?

LTCI Partnership Programs allow an individual to purchase a State-approved Long-Term Care Insurance Policy with the intention that if he/she needs to apply for Medicaid in the future to pay for LTC services, then the individual will be able to protect all or a portion of the assets he/she would otherwise have to “spend down” to become Medicaid eligible.

 

What is the National Long-Term Care Partnership Program?

  • On February 8, 2006, the Deficit Reduction Act (DRA) of 2005 was signed into law, allowing the expansion of Long-Term Care Insurance Partnership Programs in new states, thus creating the National Long-Term Care Partnership Program.

  • Prior to the DRA, four states, California, Connecticut, Indiana and New York, had LTCI Partnership Policy Programs. The Partnership Programs in CA, CT, IN and NY are grandfathered “as is” under this new legislation.

  • New states are able to implement LTCI Partnership Programs, under the guidelines of the DRA.

 

Read about the DRA guidelines:

  • Under the DRA, a policy must meet the following requirements to be considered eligible for asset protection under the National LTC Partnership Program:

  • Be a Tax-Qualified LTCI policy.

  • Meet certain consumer-protection provisions of the NAIC Model Act and

  • Regulation for Long-Term Care Insurance.

  • Be issued after the state’s Partnership effective date (the date the state

  • amends its Medicaid plan).

  • Meet the specific state’s requirements for Tax-Qualified LTC policies,

  • however, the state cannot impose any requirements for National Partnership policies other than what it imposes on non-Partnership LTC insurance policies (with the exception of specific age-based Inflation Protection requirements).

  • Meet specific age-based Inflation Protection requirements (see Florida specific requirements below).

  • Once a state is approved and has announced an effective date of the new Partnership Program, insurers must receive approval from the state’s Department of Insurance (DOI) of the policy forms they wish to sell as Partnership Policies in that state.

  • While the DRA has established guidelines, there may be some minor variations between each state’s Partnership Program. As each state adopts the Partnership Program, details of that state's program will become available.

 

Explain the Asset Protection provided under the new LTC Partnership Programs.

Medicaid Asset Protection provided under the new LTC Partnership Programs will be Dollar-for-Dollar.

A person in “State A” purchases a Partnership policy with a Total Lifetime Benefit (TLB) amount of $200,000. The insured begins to receive LTC services and qualifies for benefits under the policy. Over time, the policy pays out $200,000 in benefits for LTC services, depleting his/her TLB. When the insured applies for Medicaid coverage in “State A” to continue paying for the required LTC services, he/she is allowed to protect $202,000* in countable assets from Medicaid spend-down ($200,000 more than the typical $2,000* limit). *Federal guidelines dictate that an individual must spend down countable assets to an amount ranging from $1,000 - $4,150 to qualify for Medicaid. The 2007 limit is $2,000 for the most state Medicaid programs.

Will there be reciprocity for Asset Protection between Partnership Programs in
different states?

For guidance from the Secretary of Health and Human Services (HHS) on this topic.
Once more information is available, the states will determine if they choose to develop
reciprocity agreements with other states that have LTC Partnership Programs.