Prior to the Deficit Reduction Act of 2005 (DRA '05), only four states, including: California, Connecticut, Indiana, and New York, had Long-Term Care Partnership Programs ("LTC Partnership Programs). As a result of DRA '05, the Long-Term Care Partnership Programs were expanded to the remaining states.
The purpose of the LTC Partnership Programs is to develop creative solutions for long-term care financing. The LTC Partnership Programs combine the use of approved private LTC insurance plans with access to Medicaid benefits. In other words, once the insured has exhausted the benefits of his or her Partnership LTC Policy, Medicaid benefits become available to the insured. Two Partnership LTC Policy models were initially developed, including a total asset protection model, and a dollar-for-dollar asset protection model.
New York was the first to adopt the total asset model, while the other three states implemented the dollar-for-dollar model. The difference between the two models is how countable resources are protected from a Medicaid spend-down. With the total asset model, all countable resources are protected from a Medicaid spend-down, while in the dollar-for-dollar model, only the value of countable resources equal to the Partnership LTC benefit pool are protected from a Medicaid spend-down. In other words, if the Partnership LTC policy created a benefit pool of $400,000.00, then countable resources of $400,000.00 are protected from a Medicaid spend-down.
In both models, the individual must still pass the Medicaid income eligibility test, after exhausting his or her Partnership LTC policy benefits. In other words, if an individual's monthly income from all sources exceeds the private pay rate for the nursing home facility in which he or she resides, Medicaid benefits will not be available to the individual. Additionally, any monthly income in the individual's name must be contributed toward his or her care, less a small amount for his or her personal needs.
Of the four original partnership states, only New York and Indiana still offer a total asset model. Additionally, as of this writing, the following states offer the dollar-for-dollar LTC Partnership Program: Colorado, Florida, Georgia, Idaho, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, and Virginia. It is expected that none of the aforementioned states will offer a total asset protection LTC Partnership Plan.
Agents are required to discuss the Partnership Plans, where available, and must complete special training requirements as dictated by their state. Krause Financial Services offers Partnership LTC Plans, as well as traditional Long-Term Care Insurance Plans throughout the United States.
