Long Term Care Insurance Partnership

This is a state program that motivates people to purchase Long Term Care Insurance so they can possibly get a Medicaid spend down waiver if they were to need care.

What’s the cost

To qualify for a Long Term Care Partnership, you don’t need to pay a dime more. The only requirement from the state is that you buy inflation protection. But since that is already part and parcel of any sound LTC plan, you’ve got it already. California requires that you buy $180/day benefit minimum. But virtually all the other states have no such rule.

Long Term Care Insurance Partnership Program

a) Qualification

To start with, your policy must be approved in your state (ask your LTC Key agent for details). Based on your age, you also must have either simple or compound protection for inflation. Keep in mind that this is a state-by-state specification, so you need to have a good agent in place who’s knowledgeable about your state.

b) Does it help me save?

About 15 percent of policyholders will go for an unlimited benefit period. But with this partnership, you can buy less coverage and still know that if your claim lasts longer than the average, your assets may have protection thanks to the LTC Partnership policy.

c) What does the state have in it?

92 percent of all LTC claims are for 3 years or less. This simply means that the majority of people do not use up their LTC benefits. By encouraging personal responsibility through purchase of Long Term Care plans, the states know that they can save the already strained Medicaid.

As a rule of the thumb, State Partnership Plans are a great safety net to include in your LTC plan. But chances are that you may never have to fall back on it. Since state actuaries already know this, we expect that these Partnerships will expand rather than shrink. Currently, Partnership Plans are available in most states.

Long Term Care Partnership Stats

The initial four states that offered this Partnerships included California, Indiana, New York and Connecticut. By now, they’ve had such programs for a while. Take a look at the stats below on how likely (or unlikely) it is that you may exhaust your policy.

State Policies in Force Number Receiving Partnership Benefits
California 64,915 343
Connecticut 64,915 141
Indiana 29,189 83
New York 47,539 642
Total 4 States 172,477 1,209

Source: Government Accountability Office, 2005.

Expansion of LTC Insurance Partnership Plans

The Deficit Reduction Act of 2005 (DRA 05) allows any state to create a Partnership Plan. Most states are already on board and in the process of implementing these plans. All new Partnership policies must satisfy specified criteria such as identified consumer protections, federal tax qualifications, and inflation protection provisions.

We actively track different states’ LTC Partnership Plans are and happy to help you navigate the government red-tape. Indeed, there are some serious advantages to having an LTC Insurance Partnership plan. Get your own comparative quotes by simply completing the form below.