Long Term Care Partnership Program
According to the American Health Care Association, the Long Term Care Partnership Program is a public-private partnership between states and private insurance companies, designed to reduce Medicaid expenditures by delaying or eliminating the need for some people to rely on Medicaid to pay for LTC services.
It uses the term assets to denote savings and investments, and excludes income. For purposes of Medicaid eligibility, assets include both income, which is anything received during a calendar month that is used or could be used to meet food, clothing, or shelter needs, and resources, which are anything owned, such as savings accounts, stocks, or property.
The partnership program began in 1987 as a demonstration project funded through the Robert Wood Johnson Foundation and four states – California, Connecticut, Indiana, and New York – were the first ones to develop the program. The programs are created to encourage the purchase of private long-term care insurance, especially among moderate income individuals, by this means potentially reducing future reliance on Medicaid as a funding source for LTC services. Consumers are thus protected from having to become impoverished to qualify for Medicaid, and states avoid the entire burden of long-term-care costs.
Each of these four states has their own and unique ways in protecting policyholder’s assets. In California and Connecticut, dollar-for-dollar model is being utilized which basically means the dollar amount of protected assets is equivalent to the dollar value of the benefits paid by the long-term care insurance policy.
In New York, its partnership program requires the purchase of a comprehensive long-term care insurance policy, covering a minimum of 3 years of nursing home care and 6 years of home and community-based care, but offers total asset protection for all of the purchaser’s assets at the time of Medicaid eligibility determination.
While, in Indiana, a hybrid model is used which allows purchasers to obtain dollar-for-dollar protection up to a certain benefit level as defined by the state; all policies with benefits threshold provide total asset protection for the purchaser.
In terms of costs, the amount of coverage purchased by partnership policyholders varies across the four states. These amounts were determined using the daily benefit amounts at the time of purchase and are not adjusted for inflation. And, average premiums for partnership policies differ across states and are based on age and benefits purchased.
Under the partnership program, most partnership policies are comprehensive, covering both nursing home care and home and community-based care.
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