State Partnership Plans
When discussing Long-Term Care Insurance with your agent, ask about your State’s Long-Term Care Partnership Program!
This is an exciting new program that is less than five years old in most states. It’s a partnership between Medicaid and Long-Term Care Insurance to give Americans an incentive to plan ahead for their care needs.
Here’s how it works:
1). First, you buy a qualified Long-Term Care Partnership Plan. This is a Long-Term Care insurance policy that meets the requirements of your state’s plan.Your agent will know what type of plan is qualified.
2). When you need Long-Term Care, your partnership qualified policy will pay first. After your policies benefits are exhausted, you are eligible to protect an amount of money in your estate equal to what your policy paid out. In other words, Partnership Plans allow “Dollar-for-Dollar Asset Protection”, which again means that for every dollar your policy pays for Long-Term Care services, you can shelter an equivalent amount from a Medicaid spend down.
3). Once assets are protected they can be transferred at any time to remove them from an estate, or they can remain protected if you retain them.
Marie bought a Long-Term Care policy that was partnership qualified for her asset protection. Her policy has a $100,000 maximum benefit with a 3% inflation option. Three years later, Marie had a stroke and needed care. Her policy started paying benefits and continued until there were no benefits left. Marie’s daughter Sarah, took care of applying for Medicaid for her mother. Marie’s insurance company sent her a letter stating that the policy had paid $109,765 in benefits. The state Medicaid program told Sarah that normally Marie could keep $2,000 of personal assets and that she would have to spend down her own money until she reached that point.
However, since she had a Long-Term Care Partnership Plan, Medicaid would allow Marie to keep the $2,000 PLUS $109,765! Since Marie only had a little over $100,000 of countable assets, Medicaid began paying towards her care right away! Marie was able to protect all of her assets under the State Partnership Plan!
While it’s designed to save money for Medicaid, it’s a great incentive to seek coverage with a Long-Term Care Insurance Program since it allows you to determine the amount of asset protection that you want!