State-run partnership programs combine Medicaid benefits with long term care insurance plans.
According to the U.S. National Care Planning Council, an estimated two out of every five Americans will require long-term care services at some point in their lifetimes. Long-term care insurance coverage provides some assistance with nursing home and home-care costs, though out-of-pocket expenses can still be costly. Fortunately, people can qualify for state-run long-term care partnership programs when Medicaid spend down provisions are met. As of June 2009, 29 states provide partnership programs.
Asset Disregard Rule
Long-term care (LTC) insurance partnership programs combine private long-term care insurance plans with Medicaid-assisted coverage in cases where people require more long-term care than their insurance plans provide, according to the National Clearinghouse for Long-Term Care Information. Under a partnership program plan, the asset disregard rule allows individuals to retain a good portion of their assets and still qualify for Medicaid coverage in the event their long-term insurance runs out. The amount of assets disregarded by Medicaid equals the amount of benefits used under your long-term care plan coverage plus the $2,000 asset limit permitted by Medicaid. So, someone who uses $75,000 worth of long-term care insurance can retain $77,000 worth of assets and still be eligible for Medicaid coverage.
Lookback Provisions
Under Medicaid guidelines, lookback provisions refer to the tracking of any transfer of assets (also known as gifting) to a family member or trust prior to applying for Medicaid assistance. Based on information from the U.S. National Care Planning Council, these steps are taken as a way to prevent individuals from hiding assets that exceed the $2,000 asset allowance under Medicaid guidelines. Otherwise, excess assets fall within the spend down requirement, meaning a person would have to pay an equal amount in medical costs up-front before Medicaid coverage begins. Under an LTC insurance partnership plan, gifted assets are protected provided their valued amounts don't exceed the amounts spent under LTC coverage. Medicaid lookback periods can run anywhere from two to five years depending on State guidelines according to the California Long-term Care Insurance Services resource site. As long as a person's long-term insurance pays out during the lookback period, Medicaid disregards any transfers made during that period.
Inflation Protection
Long-term care insurance policies typically have a built-in inflation protection clause that adjusts for service costs when inflation rates go up. As of 2009, California Long-Term Care Insurance Services lists the national average for standard inflation protection rates at 5 percent. Under the LTC insurance partnership program, inflation protection requirements can vary depending on a state's guidelines in terms of percentage rates. In order for a particular policy to qualify under the partnership program, its inflation protection percentages must match those put in place by the state, according to the National Clearinghouse for Long-Term Care Information.
