When Long-Term Care Insurance Benefits Run Out

A relatively new type of long-term care policy, “Partnership Plans” could be a good option for many consumers, says Denise Gott, CEO of ACSIA Partners. The Partnership Long-Term Care Insurance Plans emerged over two decades with little fanfare. These plans are now available in a majority of states, but most consumers don’t know about them.

Partnership Plans are private long-term care insurance policies that let people keep some or all of their assets if they exhaust their policy’s benefits and then apply for Medicaid. With a Partnership Plan, you can maintain a higher level of wealth and still qualify for Medicaid.

The American Assn. For Long Term Care insurance explains that the Long Term Care Partnership Program is a joint federal-state policy initiative to promote the purchase of private long term care insurance. There is an important benefit to purchasing a Partnership-qualified long term care insurance policy. Policyholders earn one dollar of Medicaid asset disregard for every dollar of insurance coverage paid on their behalf. Here’s an example. Stephanie has a Partnership-qualifed policy, which has paid out $150,000 of insurance claim benefits. She earns a Medicaid asset disregard that allows her to keep an additional $150,000 over the asset level she would have had to meet to be eligible for Medicaid. The Partnership Program also protects those assets from Medicaid estate recovery after death.

Gott explains, “This can make a huge difference. You no longer have to impoverish yourself to get public assistance. Middle-class families can keep solvent and keep productive longer as a result. Knowing you’ve got this backup can give you an extra incentive to protect yourself with LTC insurance in the first place. That’s why Uncle Sam and the states set it up. Some people may choose a less expensive policy with more limited benefits, knowing the public backup is there.”

Gott said, “To get a state-approved Partnership Plan, you need to take care, Not all of today’s long-term care policies fit the category. You need to seek out one of the relatively few approved policies now available.” For more information, visit acsiapartners.com or aaltci.org.

Last Updated 05/05/2021

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