Do Partnership Policies Cost More?

Buying a Partnership Long Term Care Insurance policy provides an individual long term care (LTC) coverage and Medicaid asset protection, but contrary to many people’s speculations it does not cost more than the traditional long term care insurance (LTCI) policies. Because of the term “asset protection” people find a Partnership policy more advantageous but they are discouraged by the possibility of spending more on annual premiums. The fact of the matter is that state officials have instructed insurance companies selling LTCI policies to charge traditional and Partnership policyholders the same premiums if their type of coverage is similar. Although that’s the case, an insurance company has the discretion to increase the premium of a Partnership policyholder if his maximum daily benefit amount and benefit period are bigger and longer than those of a traditional LTCI policyholder. Partnership LTCI policies would benefit both the government and the insured individuals. It delays a person’s eligibility for Medicaid assistance, which is advantageous to the government especially now that it is still in the process of recovering from its high deficit resulting from last year’s big LTC expenditures. On the other hand, those who are contemplating buying LTCI can settle for a shorter benefit period and save a chunk on their annual premiums if they would opt for a policy which complies with the Partnership Program. Should they need further care, they can apply for Medicaid assistance without spending down a portion of their assets that is equivalent to the benefits which they have received from their policy. Requirements of Partnership Long Term care Insurance To know if your LTCI policy complies with the Partnership Program it has to meet a set of requirements which are as follows: • It should be tax qualified and it pays benefits on a reimbursement, cash benefit, or indemnity basis. • Its date of issue should be after the official date that the Partnership Program took effect in your state of residence. If you have purchased your non-Partnership policy before the state’s issue date of Partnership policies, you can exchange it for the latter. You have to acknowledge it as a newly issued LTCI policy though because Partnership qualified policies have an underwriting that is different from traditional policies. • The insured should be a legit resident of the Partnership state when coverage took effect under his policy. • The policy should comply with the consumer protection requirements defined in the Social Security Act. • It bears the asset disregard feature so in the event that the insured would require ongoing care from Medicaid after having exhausted his LTCI policy’s benefits, the amount of his assets that is equivalent to the benefits that he received from his Partnership policy shall be exempted from Medicaid’s spend-down rule. • Individuals who have purchased their Partnership long term care insurance policies before the age of 61 should have a compound annual inflation protection; those who are 61 but younger than 75 at the time of purchase should be given some level of inflation protection; while individuals who are 76 or older don’t need any form of inflation protection.