In 1965, President Lyndon Johnson, as part of the Great Society legislation, initiated universal healthcare coverage for citizens ages 65 and older. Today, we know this program as Medicare. Simultaneously, healthcare and long-term care for the indigent were created and funded with federal and state tax dollars. Today, we know this program as Medicaid.
As we all know, Medicare and the Medicaid programs are seriously under funded and will need major overhauls very soon to continue the promises that have been made. One of the issues that has exacerbated the under-funding problem of Medicaid has been the use of funds by the middle class to help pay for long-term care costs.
In 1994, four states - New York, California, Indiana and Connecticut - in cooperation with the federal government, initiated the long-term care insurance partnership program as a way to provide a financial incentive for individuals who purchase long-term care insurance as a means of solving the long-term care financing crisis that is looming.
As of December 25, 2008, Wisconsin is now the 20th state to enact this program. The Wisconsin Partnership Long Term Care Insurance Program is a cooperative effort between private insurance and the state by giving Wisconsin residents a financial incentive for buying long-term care insurance. When care is needed, the private insurance plan pays first. Later, if an individual become eligible, Medicaid pays. But if they have a partnership policy, the amount of the money the insurance company paid for care is not counted as an asset when eligibility for Medicaid is determined. By encouraging the purchase of long-term care insurance, Medicaid is returned to its original role as the payer of last resort. As a result, individuals and their families have more access to facilities as a private pay resident and the state saves tax dollars to be used for the care of the truly needy.
If a Wisconsin resident purchases a partnership qualified long-term care policy, the individual can preserve assets equal to the amount of benefits paid out by the policy. Medicaid income and asset tests would apply but a portion of assets under the spousal impoverishment rules in 2009 would be "disregarded" at application. Furthermore, the state of Wisconsin may also excludethe qualified policy benefits paid and verified by the insurer on the behalf of the insured from the Medicaid estate recovery rules upon the death of the individual on a dollar for dollar basis.
Long-term care needs include the need for help in the following activities of daily living: eating, bathing, dressing, the ability to walk (transferring), toileting, continence and cognitive impairment (dementia or Alzheimer's disease). Private insurance pays for help when needed when at least two of the six basic activities of daily living are judged to be impaired or if diagnosed with a cognitive impairment condition. Such care can be provided in a person's home, community based or assisted living facility, or in a nursing home. The costs for assisted-living facilities in Wisconsin average $3,170 a month; the cost of nursing home care in Wisconsin averages $66,726 per year, according to the 2008 Financial Cost of Care Survey by Genworth Insurance. As the boomers age, these costs will surely rise as demand for services increase exponentially. The aging resource centers of each county have staff who are trained to help seniors understand the issues involved and to help provide the ideas and choices in dealing with the problems of old age. Insurance agents in Wisconsin now have eight hours of mandatory training regarding Medicaid eligibility and the Partnership LTC Insurance Program and how it applies to an individual's specific situation.
