What Is Long Term Care Insurance Partnership Program

The Long Term Care Insurance Partnership Program was established in 1980s and piloted in four key cities — California, Connecticut, Indiana, and New York. Its goal is to promote affordable and marketable LTC policies to the masses that will eventually lessen the burden of Medicaid in paying long term care insurance and help people finance their own care without worrying about Medicaid eligibility rules. Those who have depleted their insurance benefits may still turn to Medicaid for assistance. Currently, the partnership program has been reinforced in almost all states in America.

Consumer Demographics

The partnership program was designed for low to middle income Americans since they are the ones who most likely deplete assets for Medicaid. However, some surveys indicate that most consumers of partnership policies are those with substantial assets. In California, Connecticut, and Indiana, the majority of policyholders own assets beyond $ 350,000. In New York the partnership program has fascinated higher income groups because the benefits can increase their savings.

Expansion through DRA

The Deficit Reduction Act (DRA) of 2005 mandated all states to adopt the partnership policies. Although the states may alter some provisions, all state policies must meet asset protection, tax qualifications, inflation protection, and other consumer protection. The DRA also mandated the Department of Health and Human Services to impose reciprocity agreement, allowing the policyholders to use their benefits when they move to other supporting states.

How Partnership Programs Affect Medicaid Spending

Proponents and opponents of Partnership program have their own say as to whether the policy has helped Medicaid with its budgetary problem. Opponents said that helping people finance their own care will lessen their dependence on Medicaid; thus, Medicaid spending for long term care insurance comapny will be reduced as well.

Others argue that partnership policies wont take in effect to cut down Medicaid expenditure if they qualify people who can actually handle their own care. Theres a probability for Medicaid to save dollars if the policies are bought by consumers who have not bought other policies. Without asset protection, this could even lead to greater Medicaid expenditures. However, it is not easy to conclude whether partnership program benefits Medicaid or not because the program is relatively new and few policyholders have used the benefits.

Issues and Concerns

Educating the public about the Partnership program seems hard for the state government. The expansion of Partnership program only adds confusion to consumers as to deciding whether to buy policy or not and, if so, which type of policy.

Many consumers do not understand that they cannot automatically qualify for Medicaid. They must meet the state income and other eligibility criteria before they can qualify for the benefits. To qualify for partnership policy, you should be impaired or need assistance with two or more activities from daily living. The requirements for functional eligibility vary in every state, with restrictive rules applied. This can pose problems to purchasers who exhaust their partnership policies and then cannot qualify for Medicaid. Home care is not possible with Medicaid. Medicaid normally pays the stay in none other than nursing homes.

Biphoo

9 May 2017

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