Navigating the complexities of long-term care planning can be daunting, especially when considering the potential financial burdens. For middle-income Americans, the Long Term Care Partnership Program offers a unique solution, blending private long-term care insurance with Medicaid asset protection. This guide delves into the Partnership Program, clarifies its benefits, and most importantly, details What States Have Long Term Care Partnership Programs to help you determine if this option is available in your area.
Understanding the Long-Term Care Partnership Program
The Long Term Care Partnership Program is a collaborative initiative between state governments and the federal government, designed to encourage individuals to purchase private long-term care insurance. The core incentive of these “Partnership-qualified” (PQ) policies lies in the asset protection they provide should you ever need to apply for Medicaid to cover long-term care costs.
This asset protection is often described as “dollar-for-dollar” asset disregard. For every dollar your PQ long-term care insurance policy pays out in benefits, you are allowed to protect an equivalent amount of your assets when applying for Medicaid.
Consider this scenario: Imagine Sarah purchases a PQ policy and years later requires long-term care. Her policy pays out $200,000 in benefits. Thanks to the Partnership Program, Sarah can shield an additional $200,000 of her assets beyond the standard Medicaid asset limits. This means she can access Medicaid benefits while preserving more of her savings and property. Furthermore, the Partnership Program extends this protection even after death, safeguarding these assets from Medicaid estate recovery.
The Genesis of the Partnership Program
The Long Term Care Partnership Program’s roots trace back to the late 1980s, initiated as a pilot project funded by the Robert Wood Johnson Foundation. Initially, four pioneering states—California, Connecticut, Indiana, and New York—were selected to participate in this innovative demonstration.
Connecticut took the lead, becoming the first state to offer PQ policies in 1992. The following year, in 1993, federal legislation (OBRA 93) was enacted, significantly impacting the program’s expansion. This legislation essentially restricted additional states from establishing Partnership programs unless their Medicaid State Plan Amendment (SPA) had already received approval before May 14, 1993.
However, the landscape shifted with the Deficit Reduction Act (DRA) of 2006. The DRA provided a pathway for more states to offer Partnership policies. Since then, numerous states have fulfilled the necessary legislative requirements to implement the program for their residents. It’s important to note that the Long Term Care Partnership Program isn’t a one-size-fits-all program; it varies from state to state.
Experts highlight a greater degree of uniformity among states that joined the Partnership Program after the DRA compared to the original four states. Nevertheless, these newer DRA states still navigate various decisions when designing their individual Partnership programs.
Which States Currently Offer Long-Term Care Partnership Programs?
To help you determine what states have long term care partnership programs, refer to the table below. This table provides the latest status based on available information. Please remember that the status of these programs can evolve, so it’s always advisable to verify with your state’s specific Medicaid agency or a qualified long-term care insurance specialist.
Key Definitions:
- Effective Date: The date when the U.S. Department of Health & Human Services officially approved the State Plan Amendment, allowing the state to operate its Partnership Program. “Original Partnership” denotes one of the initial four states.
- Reciprocity: Indicates whether a state will recognize Partnership policies issued by other DRA Partnership states for asset disregard purposes when an individual applies for Medicaid. All DRA states, along with New York, Indiana, and Connecticut, offer reciprocity. California currently does not.
| State | Effective Date | Policy Reciprocity |
|---|---|---|
| Alabama | 03/01/2009 | Yes |
| Alaska | Not Filed | — |
| Arizona | 07/01/2008 | Yes |
| Arkansas | 07/01/2008 | Yes |
| California | Original Partnership | No |
| Colorado | 01/01/2008 | Yes |
| Connecticut | Original Partnership | Yes |
| Delaware | 11/01/2011 | Yes |
| District of Columbia | Not Filed | — |
| Florida | 01/01/2007 | Yes |
| Georgia | 01/01/2007 | Yes |
| Hawaii | Pending | — |
| Idaho | 11/01/2006 | Yes |
| Illinois | Pending | — |
| Indiana | Original Partnership | Yes |
| Iowa | 01/01/2010 | Yes |
| Kansas | 04/01/2007 | Yes |
| Kentucky | 06/16/2008 | Yes |
| Louisiana | 10/01/2009 | Yes |
| Maine | 07/01/2009 | Yes |
| Maryland | 01/01/2009 | Yes |
| Massachusetts | Proposed | — |
| Michigan | Work stopped | — |
| Minnesota | 07/01/2006 | Yes |
| Mississippi | Not Filed | — |
| Missouri | 08/01/2008 | Yes |
| Montana | 07/01/2009 | Yes |
| Nebraska | 07/01/2006 | Yes |
| Nevada | 01/01/2007 | Yes |
| New Hampshire | 02/16/2010 | Yes |
| New Jersey | 07/01/2008 | Yes |
| New Mexico | Not Filed | — |
| New York | Original Partnership | Yes |
| North Carolina | 03/07/2011 | Yes |
| North Dakota | 01/01/2007 | Yes |
| Ohio | 09/10/2007 | Yes |
| Oklahoma | 07/01/2008 | Yes |
| Oregon | 01/01/2008 | Yes |
| Pennsylvania | 09/15/2007 | Yes |
| Rhode Island | 07/01/2008 | Yes |
| South Carolina | 01/01/2009 | Yes |
| South Dakota | 07/01/2007 | Yes |
| Tennessee | 10/01/2008 | Yes |
| Texas | 03/01/2008 | Yes |
| Utah | Not Filed | — |
| Vermont | Not Filed | — |
| Virginia | 09/01/2007 | Yes |
| Washington | 01/01/2012 | Yes |
| West Virginia | 01/17/2010 | Yes |
| Wisconsin | 01/01/2009 | Yes |
| Wyoming | 06/29/2009 | Yes |
(Last Updated: Based on original article’s data – March 2014. Please verify current status with official sources.)
Costs Associated with Long-Term Care Partnership Insurance
Understanding the costs of Partnership-qualified long-term care insurance is crucial for informed decision-making. Policy premiums are influenced by several factors, including your age at the time of purchase, your health status, and the specific benefits you select within your policy.
Data from a 2012 report by the New York State Long-Term Care Partnership provides insights into the annual premium ranges:
- Ages 50-54: Premiums ranged from approximately $1,384 to $11,667 per year.
- Ages 55-59: Premiums ranged from roughly $1,756 to $12,864 per year.
- Ages 60-64: Premiums ranged from about $1,863 to $9,490 per year.
- Ages 65-69: Premiums ranged from approximately $3,321 to $10,002 per year.
These ranges highlight the significant impact of benefit selections and individual health on policy costs. Furthermore, the American Association for Long-Term Care Insurance’s 2014 Long-Term Care Insurance Price Index revealed a considerable price variation (40-100%) for virtually identical coverage across different insurance providers. This underscores the critical importance of comparison shopping to secure the most competitive rates for your desired coverage.
Common Questions About Long-Term Care Partnership Programs
Question: If I purchase a partnership-eligible policy in one state, will it still qualify for Medicaid protection if I move to another state?
Answer: Generally, yes, especially among DRA Partnership states. Most states with Partnership policies offer reciprocity, meaning they will honor PQ policies from other participating states. However, there are exceptions, notably California among the original four Partnership states. It’s crucial to confirm reciprocity details with your insurance provider and the relevant state Medicaid agencies, particularly if you anticipate moving in the future.
Question: Do most states mandate 5% compound inflation protection for Partnership policies, or are options like 3% or Guaranteed Purchase Options permitted?
Answer: No, a 5% compound inflation rider is not universally required. Most states offer flexibility, particularly for younger applicants. For individuals under 61, any compound Cost of Living Adjustment (COLA) is typically acceptable. For those between 62 and 75, any automatic COLA rider may qualify. After age 75, inflation protection riders may not be mandatory at all in many states. Guaranteed Purchase Options (GPO) generally do not meet Partnership policy requirements in most states.
Again, the original four Partnership states have unique rules:
- California: Requires 5% compound inflation to age 70; after 70, 5% simple inflation is permissible.
- Connecticut: Mandates 5% compound inflation at all ages, though benefit inflation options may be available for those under 65 (consult a specialist).
- Indiana: Requires 5% compound inflation for full asset protection; 5% simple or CPI at any age earns dollar-for-dollar protection only.
- New York: Allows 3% or 5% compound inflation for those aged 79 and younger.
Question: Do I need to specifically request a Partnership-eligible policy, or are most policies automatically qualified if they meet inflation protection and other criteria?
Answer: It’s not always straightforward. If an insurance carrier has filed a policy as a Partnership policy and you select the necessary COLA rider, it will often automatically be a Partnership policy. The original four Partnership states typically use separate policy forms for PQ policies. Many other states, however, do not have distinct policy forms. In these cases, policyholders usually receive a letter confirming their policy’s Partnership qualification upon delivery. It’s vital to note that not all insurance companies offer Partnership-qualified policies in every state. Therefore, it’s essential to confirm with your insurance agent or broker that you are indeed purchasing a Partnership-qualified policy if that is your intention.
Typical Coverage Amounts Purchased Under Partnership Programs
The vast majority of DRA Partnership policies are ‘comprehensive,’ covering long-term care services in various settings, including your home or a skilled nursing facility. Benefits are usually defined in dollar amounts.
According to a January 2014 report, the maximum policy benefits purchased under DRA Partnership programs were distributed as follows:
- Less than $109,599: 10% of policies
- $109,600 – $146,099: 8% of policies
- $146,100 – $182,599: 12% of policies
- $182,600 and above: 54% of policies
- Unlimited: 14% of policies
Data from the California Long-Term Care Partnership (April-June 2013) provides insights into daily benefit amounts:
- $170 per day: 11.28% of policies
- $180 per day: 35.50% of policies
- $190 per day: 00.89% of policies
- $200 per day: 31.00% of policies
- $210 per day: 00.60% of policies
- $220 per day: 03.44% of policies
- $230 per day: 02.87% of policies
- $240 per day: 01.21% of policies
- $250 per day: 08.03% of policies
- More than $200 per day: 11% of policies
These figures offer a glimpse into the common coverage levels chosen by Partnership policy buyers, reflecting a range of needs and financial considerations.
If you are interested in exploring whether you qualify for long-term care insurance and want to understand potential coverage costs, it’s recommended to connect with a qualified expert in your area for personalized guidance.
(Disclaimer: This information is based on data available up to March 2014 and is for informational purposes only. Always consult with a qualified financial advisor and insurance specialist for personalized advice and the most up-to-date information regarding Long-Term Care Partnership Programs in your specific state.)*
