• LTCI: Does Automatic Inflation Protection Guarantee Against Rate Hikes?
• A Sneaky Secret About Long-Term Care Insurance Premiums
• How to Identify a Partnership-Qualified Long-Term Care Insurance Policy
• State Long-Term Care Partnership Programs: An Overview
• The Most Common & Expensive Long-Term Care Insurance Mistake
• Preserve Your Long-Term Care Coverage with Inflation Protection
• Long Term Care Insurance: How to Choose the Best Elimination Period
• Do You Really Need All Those Long-Term Care Insurance Options?
• Are Tax-Qualified LTCI Policies Consumer Friendly?
• Choosing the Long-term Care Insurance Company That’s Right for You
• Tax Benefits for Long-term Care Insurance: What You Qualify For
• How Do You Select A Daily Benefit For Long-term Care Insurance?
• Which is Better: Individual Long-Term Care Insurance or Group Plans?
• Preparing for the High Cost of Long-Term Care
• When Should You Consider Buying Long-Term Care Insurance?
• The Facts: What Medicaid Pays for Long-term Care

State Long-Term Care Partnership Programs: An Overview

Print

 Email

Comments (0)

Both state and federal governments have begun to realize that long-term care costs have the potential to become a major budgetary problem in the not-too-distant future. One significant contributing factor is the large pool of baby boomers nearing or entering retirement, many of whom will require long-term care very soon.

As a result, lawmakers have begun taking steps to encourage consumers to take responsibility for their own long-term care needs and purchase LTCI (long-term care insurance). One of the most promising initiatives thus far is the state partnership program.

Four states originally pioneered this concept several years ago: California, Connecticut, Indiana and New York. The federal government permitted the expansion of this program and laid out the basic guidelines in the Deficit Reduction Act of 2005. Now each state can decide, individually, whether to participate.

The basic premise of the partnership program is that it allows the purchaser of a LTCI policy to shelter an amount of funds equal to the amount the policy pays out in benefits and still qualify for state assistance through Medicaid, as long as he or she has exhausted all of the benefits and still needs care. This ensures that LTCI partnership policyholders will never have to be impoverished to receive state assistance, even if their need for care outlasts the benefits of their LTCI policy.

This is a clear benefit to consumers, because they no longer have to buy policies that contain lifetime benefits to ensure that long-term care costs won’t wipe out their life savings. They can choose a lower benefit period instead, perhaps three to five years, which is very adequate coverage for the vast majority of consumers.

The partnership program is also a win for state Medicaid programs, as they will no longer be the first resort for paying for long-term care costs when consumers purchase LTCI.

There are several states that are in the process of adopting partnership guidelines of their own. These states include: Colorado, Florida, Idaho, Maryland, Maine, Minnesota, North Dakota, Nebraska, Ohio and South Dakota. There are about a dozen other states that have introduced legislation aimed at considering a partnership program for their residents as well.

Of course, other solutions are also needed to help ward off the looming financial crisis that long-term care costs may soon bring. But the partnership program is at least a positive first step in the right direction.

Until next time…Duane

Read more about long-term care insurance (LTCI).

Posted in Financing Long Term Care: Duane Lipham, Insurance, Long-term Care Insurance (LTCI), Paying for Care, Planning for Long Term Care

Print

 Email

Comments (0)

Leave a Comment