The Partnership Program - Some Good News!!!

Life is filled with uncertainty, but one thing is certain, people need to know that they will be taken care of when they grow old. As of 2013, the number of persons aged 65 or older rose to 46 million in the United States with statistical promises of doubling by 2050. Seniors have several means at their disposable to help ensure whatever care needs they require in the future are met; unfortunately, the inadvertent consequences arising from an instable care plan may be worse than the idea of not having one at all. As a solution, many states have enacted The Long Term Care Partnership Program; a joint federal-state policy initiative that conjoins the perks of private pay insurance with the regulation of Medicaid. This is good news for taxpayers everywhere.

The latest report from The National Spending for Long-Term Services and Supports offered that Americans financed $219.9 billion dollars towards elderly and disabled care, 62% of which was devoted entirely to Medicaid. The eligibility for Medicaid covered Long-term care can be complicated, and the requirement to deplete assets, or “spend down” can put seniors in an incredibly vulnerable (and emotional) situation. State laws differ about how much income and assets you can keep and still be eligible for Medicaid. (Some assets, such as your home, may not keep you from being eligible for Medicaid.) However, federal law requires your state to recover from your estate the costs of the Medicaid benefits you receive.

Enter the Partnership Program.

Most states allow a dollar-for-dollar asset disregard for claims paid on qualified partnership policies and will not require that the policy holder exhaust the benefits offered under the partnership policy in order to qualify for Medicaid.  Under this program, if additional coverage is needed beyond what is provided by the qualified partnership policy, the policyholder can access Medicaid. Simply put, whatever the policy paid toward care, that amount of hard-earned money will be protected.

In order for a policy to qualify as a partnership policy in Missouri, it must have been issued after August 1, 2008, the policyholder must be a resident in Missouri at the time the coverage became effective, the policy must include inflation protection, and the policy has to meet the definition of a Long Term Care insurance policy as defined in as defined in 7702B(b) of the Internal Revenue Code of 1986. Kansas, also a partnership policy state, requires the policyholder to be a resident of Kansas at the time coverage became effective, the policy must be issued after April 1, 2007, it must include inflation protection, and the policy has to meet the definition of a Long Term Care insurance policy as defined in 7702B(b) of the Internal Revenue Code of 1986.

Prior to 2006, when the Deficit Reduction Act (DRA) was enacted, only four states (CA, CT, IN and NY) adopted a private-public partnership plan to protect the assets of people unable to afford private insurance, yet had too many assets for Medicaid.  In the years since the DRA eased its restrictions, almost every state in the country now has a partnership program.

States like Indiana and New York offer a total asset approach which allows an individual to keep all their assets, not just an amount equivalent to the Partnership policy benefits received. However, for someone to fully qualify for total asset protection their policy must provide a certain amount of benefits.

Some of the benefits of a Partnership Program are:

·      Tax-qualified.

·      The policy must provide inflation protection.

·      Care eligibility does not require depleting or transferring assets.

·      Once private insurance benefits are used, special Medicaid eligibility rules are applied if additional coverage is necessary.

·      Regulated premium rates.

·      States with Partnership Policies tend to have reciprocity.

To locate the state insurance website to determine the rules for each state, go to www.naic.org/state_web_map.htm