The ONLY Long Term Care Insurance plans that pay you 100% CASH to use for care as you wish.
Agents & Agencies:
Sell the #1 LTC products of the 21st century
Enter email below:
Federal Long Term Care Insurance Partnership Program
Definition of the Federal Long Term Care Insurance Partnership Program
Background on the Federal Long Term Care Insurance Partnership Program
Qualifications for a Federal Partnership Policy
Case Study: How a Partnership Qualified Policy Works
Important Considerations for Consumers
State participation in the Federal Long Term Care Insurance Partnership Program
Click here to see List of States for Federal Partnership Program
The Federal Long Term Care Insurance Partnership Program is a Federally-supported and state-operated collaboration. The program allows individuals who purchase qualified Partnership LTC insurance policies to protect a portion of their assets - up to the amount of the policy should they need to apply for Medicaid after using up their LTC insurance benefits. Once part or all of the policy's lifetime maximum coverage is spent, a policy holder's assets would be protected, up to the amount used. Although they still must meet other Medicaid eligibility requirements, they would not need to spend those assets before qualifying for their state's Medicaid program.
Partnership Programs benefit both individuals and the state. For individuals, it allows them to receive and pay for services they need without having to spend all of their assets. For the state, it can decrease the amount of Medicaid dollars used for long-term care services.
The Federal Long Term Care Insurance Partnership Program was initiated in the late 1980s. The goal of this program was to lessen the financial strain of long term care on state Medicaid programs by encouraging the purchase of private long term care insurance. Originally, only four states (California, New York, Indiana, and Connecticut) were allowed to participate in the Partnership Program. The Omnibus Budget and Reconciliation Act (OBRA) of 1993 restricted further development of Partnership Programs in other states.
The Deficit Reduction Act (DRA) of 2005, signed into law by President Bush, changed Medicaid long term care eligibility rules and allowed for the nationwide expansion of the Long Term Care Insurance Partnership Program and asset protection on a dollar-for-dollar basis.
Qualified LTC Partnership policies must have certain built-in consumer protections that traditional LTC policies are not required to have.
Partnership policies must be tax-qualified
Partnership policies must meet specific standards set by the Health Insurance Portability and Accountability Act (HIPAA). If certain requirements are met (check with a tax professional for details), tax-qualified policy premiums may be deductible as a medical expense. Policy benefits received generally are not included as ordinary income for federal income tax purposes.
Partnership policies have to include dollar-for-dollar asset protection where the amount of assets that are protected from Medicaid spend down requirements equals the dollar value of the benefits paid by the LTC Partnership policy.
Inflation protection
All Partnership policies must include age-based inflation protection, if purchased before the age of 76. The inflation protection is put in place to help policy benefits keep pace with the rising cost of long term care services.
The following is an example of how a Partnership qualified policy works. Let's say John, a single man, purchases a Partnership policy with a value of $100,000. Some years later, he receives benefits under that policy up to the policy's lifetime maximum coverage (adjusted for inflation) equaling $150,000. John eventually requires more long term care services and applies for Medicaid. If John's policy was not a Partnership policy, he would be entitled to keep only $2,000 in assets in order to be eligible for Medicaid. He would have to spend down any assets over and above this amount. However, because John bought a Partnership policy, he can keep $152,000 in assets and the state will not recover those funds after his death. However, any assets John has over and above the $152,000 would have to be spent in order for him to be eligible for Medicaid. He would also have to satisfy the income, general eligibility and functional eligibility requirements for Medicaid before he can qualify.
It is important to know if the long term care insurance policy you buy is a Partnership-qualified policy or not, since they can be the same as non-Partnership policies. A Partnership-qualified policy is one that is certified by the state and must include the level of inflation protection coverage set by the state. Only if you have a Partnership policy will you be eligible for an asset disregard if and when you apply for Medicaid.
Policies issued prior to a State Partnership Program's effective date will not be considered Partnership-qualified; however there ]are circumstances under which you may be able to exchange a policy you previously purchased for one that is Partnership-qualified.
It is important to buy your Partnership policy from an agent who is specially trained to sell that type of coverage. States with Partnership programs have additional educational requirements for agents who wish to sell Partnership policies.
It is important to note that eligibility for Medicaid is not automatic. You must still apply and meet the income, functional and general eligibility requirements of the Medicaid program in your state. The long term care services provided by Medicaid vary by state and may not be the same as the services you are eligible to receive under your private Partnership policy. For example, many state Medicaid programs do not pay for room and board costs in an assisted living facility even if you are also receiving personal care.
The following list shows which states have implemented Partnership Programs and are offering Federal Long Term Care Insurance Partnership Program policies. There are other states in the process of implementing these programs.
Policies for Sale
Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Virginia, Wisconsin, Wyoming
Approved state Plan Amendment
Maine, Montana, New Hampshire
State Documents Available
Delaware, Massachusetts, Vermont, Washington
