Partnership policies sold in Colorado are part of the Deficit Reduction Act (DRA) and all States except NY, CA, IN, CT are reciprocal with each other in terms of your long term care insurance policy allowing for Medicaid offset.
HOW DOES IT WORK?
- Partnership LTC insurance policies, partner with the State Medicaid office in allowing any dollar that was paid out of a LTC insurance policy to count towards the amount that is allowed to be kept as part of assets and not "spent down" in order to qualify for Medicaid.
John and Mary have LTC insurance and John now has Alzheimer's, his policy has paid out $100,000 for his care, using up his entire pool of money.
Now John has to start paying for his care out of pocket, so needing assistance they turn to Medicaid for help. Medicaid states the $100,000
the LTC policy paid out is an 'offset' against their assets so they now they get to KEEP a $100,000 in assets, it does not have to be spent down to qualify for
Medicaid. Mary gets to keep all their assets and John's bills are now paid by Medicaid.
WHAT TYPES OF POLICIES ARE ELIGIBLE FOR PARTNERSHIP?
- Traditional "stand alone", health based LTC insurance policies
- The policy Must have an automatic compound inflation rider if you are under age 61 when buying the policy, age 61-76 any automatic inflation rider and 76+ no inflation rider is required.
- Any policy purchased PRIOR to January 1, 2008 is NOT Partnership Eligible.
- The newer style polices that come by several names like hybrid, asset based, combo. These use life insurance or annuities to help pay for LTC expenses and these style of policies are NOT Partnership Eligible.
- Short Term Care,Chronic Illness &Terminal Illness style policies are also NOT Partnership Eligible.
WHAT TYPES OF CARE ARE AVAILABLE?
- Most LTC policies purchased today are comprehensive, meaning it will pay for care at Home, Adult Day Care, Assisted Living Facility and Nursing Home
- Owning a policy helps the family by providing assistance in the home where approximately 80% of all care is received. Of course it will pay up to your chosen daily benefit for care in a facility too.