Frequently Asked Questions

Miscellaneous

Partnership Program

1. What is the Long Term Care Insurance Partnership Program?
    
2. Can you give me more background on the Long Term Care Insurance Partnership Program?
    
3. I’ve heard that a law was recently passed that makes Partnership Programs more widely available now. What is that law and what does it do?
    
4. Does the Federal Long Term Care Insurance Program (FLTCIP) qualify as a Partnership Program Policy?
    
5. How will I know if my state will participate in the Long Term Care Insurance Partnership Program?
    
6. How will the Long Term Care Insurance Partnership Program affect my coverage under the Federal Long Term Care Insurance Program (FLTCIP)?

1. What is the Long Term Care Insurance Partnership Program?

The Long Term Care Insurance Partnership Program is a Federally-supported, state-operated initiative that allows individuals who purchase a qualified long term care insurance policy to protect a portion of their assets that they would typically need to spend down prior to qualifying for Medicaid coverage.

Once individuals purchase a long term care insurance partnership policy and use some or all of their policy benefits, the amount of the policy benefits used will be disregarded for purposes of calculating eligibility for Medicaid. This means that they are able to keep their assets up to the amount of the policy benefits they purchased and used. For example, in a state that chooses to participate in the partnership program, once you’ve used part or all of your maximum lifetime benefit (MLB) under your long term care insurance coverage, your assets would be protected up to the amount used, up to that MLB. You would not need to spend those assets before qualifying for that state’s Medicaid program.

[ Back to Top of Page ]
 

2. Can you give me more background on the Long Term Care Insurance Partnership Program?

The Long Term Care Insurance Partnership Program was initiated in the late 1980s in order to address the increasing cost of state Medicaid expenditures for long term care. It allowed individuals to purchase a long term care insurance policy under the Partnership Program that protected an individual’s assets up to a pre-determined amount of policy benefits. Benefits used under the private long term care insurance policy would be disregarded when determining the individual's eligibility for state Medicaid. An amount equal to the benefits used would not have to be part of the asset spend down for Medicaid eligibility.

During the early 1990s, only four states were able to implement the Program (California, Connecticut, Indiana, and New York) before a Federal law was passed which made the asset protection feature of the Program difficult for states to adopt nationwide. That law is called the Omnibus Budget Reconciliation Act of 1993 (OBRA-93). Before the law was passed, the four states implemented their own Partnership Programs and despite the passage of OBRA-93, they were allowed to continue their Programs with exemption from the new Federal law. Other states who sought to implement a Partnership Program saw little reason to do so, because the new law required that they continue to recover assets from Medicaid recipients, even if the recipients held a Partnership Program long term care insurance policy.

[ Back to Top of Page ]
 

3. I’ve heard that a law was recently passed that makes Partnership Programs more widely available now. What is that law and what does it do?

The Federal Deficit Reduction Act of 2005 (DRA), signed into law by President Bush on February 8, 2006, tightens Medicaid long term care eligibility rules while allowing for the nationwide expansion of the Long Term Care Insurance Partnership Program and asset protection on a dollar-for-dollar basis. This means that for each dollar of benefits paid under the policy, the individual will get one dollar of asset protection, up to the maximum benefits paid out under the policy. Each state can elect to implement a Partnership Program for the citizens of that state. The DRA does not require states to participate. In turn, insurance companies need to decide if they will offer partnership policies and the policies must be certified as qualifying as partnership policies.

The law specifies that anyone who purchases a tax-qualified long term care insurance policy approved by a state insurance department that meets the requirements of the Federal partnership program would qualify for asset protection, on a dollar-for-dollar basis, up to the policy maximum.

[ Back to Top of Page ]
 

4. Does the Federal Long Term Care Insurance Program (FLTCIP) qualify as a Partnership Program Policy?

Most states are considering whether and when to implement a Partnership program. That makes it impossible to know at this time if the FLTCIP meets any state’s specific Partnership requirements. If or when your state implements a Partnership Program, we will then be able to examine your coverage with you in comparison with your state Partnership requirements and let you know if you will have Partnership protection. We are also working on having the FLTCIP qualified across all states, without needing to examine each state’s requirements.

[ Back to Top of Page ]
 

5. How will I know if my state will participate in the Long Term Care Insurance Partnership Program?

It is still too early to tell how many states will elect to participate in the expansion of the partnerships. To date, we know of one state, Idaho, which plans to implement its program on November 1, 2006. Another state, Minnesota, has already filed its forms with the Federal Government to participate in the partnership expansion.. While the Deficit Reduction Act of 2005 (DRA) does not require states to participate in the partnership expansion, the potential for substantial Medicaid savings, coupled with a Federally funded long term care awareness campaign, are compelling reasons for states to consider participating. We will notify FLTCIP enrollees if/when their state participates.

[ Back to Top of Page ]
 

6. How will the Long Term Care Insurance Partnership Program affect my coverage under the Federal Long Term Care Insurance Program (FLTCIP)?

Your Federal Long Term Care Insurance Program coverage will remain unaffected by the expansion of the Partnership Program. FLTCIP coverage is tax qualified long term care insurance policy in any state. As the states begin to determine whether they will participate in the Partnership Program and how they will tailor their Program to their needs, we will have more information to provide. We will also have more information about whether the asset protection features will be recognized from state to state, in case you intend to move from one Partnership state to another.

[ Back to Top of Page ]