State Program Partnership
A Partnership Program brings together a state government, private insurance companies that sell long-term care insurance, and residents who want to buy long-term care partnership policies. The purpose of the Partnership Program is to help people purchase meaningful, shorter term, more complete long-term care insurance. The partnership links special long-term care policies, called Partnership-qualified (PQ) policies, with Medicaid for those who continue to require care.
Partnership-qualified policies must meet special requirements that vary from state to state. Most states require partnership policies to:
- Offer comprehensive benefits (that is to cover both in-home and in-facility services);
- Be Tax Qualified;
- Provide certain specific consumer protections; and include certain kinds of inflation protection.
Often the only difference between a partnership-qualified policy and other long-term care insurance policies is the amount and type of inflation protection that the state requires.
A Partnership-qualified policy allows you to apply for Medicaid under modified eligibility rules that include a special feature called an “asset disregard.” This allows you to keep assets (generally your savings) that you otherwise would not be allowed to keep in order to qualify for Medicaid if you need additional help to pay for long-term care services. The amount of assets Medicaid will disregard is equal to the amount of the benefits you actually receive under your long-term care Partnership-qualified policy.
Since Partnership-qualified policies must include inflation protection, the amount of the benefits you receive can be higher than the amount of insurance protection you purchased. For example, if you have a Partnership-qualified long-term care insurance policy and receive $200,000 in benefits from it, you can apply for Medicaid and, if eligible, retain $200,000 worth of assets over and above the state’s Medicaid asset threshold. In most states the asset limit is $2,000 for a single person. Asset limits for married couples are often higher.
The following is an example of how a Partnership-qualified policy works:
John, a single man, purchases a Partnership policy with a value of $200,000.
Some years later he receives benefits under that policy up to the policy’s lifetime maximum coverage (adjusted for inflation) equaling $250,000.
John eventually requires more long-term care services, and applies for Medicaid. If John’s policy was not a Partnership-qualified policy, in order to qualify for Medicaid, he would be entitled to keep only $2,000 in assets. He would have to spend down any assets over and above this amount.
But because John bought a Partnership-qualified policy, he can keep $252,000 in assets and the state will not recover those funds after his death. John would only have to spend down his assets over and above the $252,000 in order to be eligible for Medicaid.
States must certify that partnership policies meet the specific requirements for their partnership program, including that those who sell partnership policies are trained and understand how these policies relate to public and private coverage options. The map below shows which states have implemented partnership programs and are offering long-term care partnership policies. To find out more about your state’s program, including which insurance agents are selling partnership policies, or to find out if your state offers a partnership program, contact your state’s Department of Insurance.