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
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