At a recent conference, the subject of State Long-term Care Partnership Program came up. I never heard of it but the speaker said Texas joined the program, Qualified State Long-Term Care Partnership Program, in 2008. It was originally created by the Deficit Reduction Act (DRA) of 2005.
Its goal is to incentivize individuals to purchase a private LTC insurance policy, because long-term care is not covered by Medicare or other health insurance plans.
There are few private long-term care insurance plans that exist but most are unaffordable, leaving more than 90% of seniors uninsured for nursing home care.
It’s a broken system. In 2002, there were 102 companies offering LTC plans but today there are 12.
Alliance for Health, a nonpartisan, not-for-profit organization says 37% of Americans believe they will need long-term care. A 2010 Genworth and Age Wave study discovered 67% actually need it for at least 3 years.
AP-NORC 2018 Research claims a majority of adults age 40 and older who aren’t currently receiving long-term care say it is at least somewhat likely they will need care someday. So, people are getting wiser.
The research group found the median monthly cost of a semi-private room in a nursing home was $7,440, the median assisted living facility cost $4,000, and a full-time home health aide cost $4,195. Here’s how most people pay for it:
—72% pay out of pocket
—12% paid by Medicare for short-term care in nursing homes, rehab
—30% are covered by Medicaid
—75% haven’t discussed it
Medicaid covers long-term care services, but to access it, individuals have to deplete their assets until they have less than $2,000 in savings, a system that literally encourages poverty.
I spoke to an agent, Michael Ashille, Borden Hamman Agency in Dallas. Michael filled me in on the qualifiers for a partnership plan:
—The policy must be a traditional LTC plan
—It must offer compound inflation up to age 75
—There may be a minimum monthly maximum benefit of $1500 but don’t quote me on that.
How it works: Through the Partnership Program, Mary earns a Medicaid asset disregard that permits her to keep an additional $100,000 over the asset level she would normally have to meet in order to be eligible for Medicaid coverage. After her death, the Partnership Program also protects those assets from Medicaid estate recovery.
The typical client is someone who has been seen a family member or friend go through the long-term care process and see how expensive it can be.
Many older adults are not aware of this program, but we should be. The DRA authorized states to offer Medicaid “dollar-for-dollar asset disregard” or “spend down protection” for people who purchase and use a Partnership-qualified long-term care insurance policy–referred to as a Partnership policy.
Learn about your state’s program at https://bit.ly/2H96I3I
Carol Marak is an aging advocate and editor at Seniorcare.com. She holds a Certificate in Fundamentals of Gerontology from UC Davis, School of Gerontology.