Partnership program for Long Term Care Insurance

Today’s blog post continues the series about buying long term care insurance as a strategy for planning ahead for long term care.  My post of May 22, 2014 discussed whether to buy long term care insurance at all.  My post of May 29, 2014 suggested looking for a stable, proven insurer.  My post of June 5, 2014 described how to identify a proven, stable Long Term Care insurance company.  My post of June 12, 2014 discussed the importance of protection against inflation. My post of June 19, 2014 suggested planning to use insurance to pay for four or five years of long term care.  My post of June 22, 2014 suggested a daily rate to choose when purchasing long term care insurance.  My post of July 10, 2014 advised to look carefully at the list of Activities of Daily Living that can trigger coverage from the long term care insurance policy.  My post of July 17, 2014 described the differences between a “period of time” kind of coverage and a “pile of money” kind of coverage.  My post of July 25, 2014 advised to make sure that the long term care insurance includes coverage for cognitive impairment.  My post of July 30, 2014 described the differences between tax-qualified and non-qualified policies.  The introductory post in the series on planning ahead for long term care costs appeared on May 15, 2014.

Today’s post will discuss whether to consider a long term care insurance policy that fits within the Partnership program.

To discuss what a Partnership Policy gives the insured, we must first discuss what Ohio’s Medicaid program allows a long term care recipient to keep.  Generally, a person receiving Medicaid in Ohio to cover his or her long term care costs can have no more than $1,500 in assets.  (Remember, Medicaid is a program to provide health care to the poor, so one must be poor to qualify.)  A Medicaid applicant who has long term care insurance that is not on a Partnership Policy can have no more than this $1,500 amount in assets when he or she wants Medicaid benefits to start.

A Medicaid applicant who has long term care insurance on a Partnership Policy can keep $1,500 PLUS the amount that the policy has paid out.  So, for example, if a senior receiving long term care has a Partnership Policy that paid out $100,000, the senior could (after the policy ran out) apply for Medicaid and keep $101,500.  The $100,000 “extra” that the senior can keep is even exempt from the estate recovery program (the part of the Medicaid law that allows the state to try to get assets from the deceased Medicaid recipient’s estate to recover some of the Medicaid program’s costs.)

In addition, Partnership Policies have mandatory inflation protection for all applicants 75 years of age or younger.  (So, if you get  a Partnership Policy, you will automatically have followed the suggestion in my post of June 12, 2014.)

Now, despite the advantages of a Partnership Policy in allowing the policy holder to keep more of his or her assets and in having built-in protection against inflation, a Partnership Policy may not be appropriate for every applicant.  I like Partnership Policies, but the devil is in the details.  Look over the policy limitations of Partnership Policies and “regular” policies before buying.

The biggest difference could be in how policy payments are triggered.  At least initially, Partnership Policies require that the policy holder be unable to perform 2 or more Activities of Daily Living before the policy will pay for care (like the tax-qualified policies discussed in my post of July 30, 2014.)  Some non-Partnership Policies use a simpler test of having your doctor determine that long term care is needed.  Before choosing your long term care policy, you must decide what level of need you’re willing to suffer before the policy will pay out.

(If you choose a policy, Partnership or otherwise, that uses the inability to carry out Activities of Daily Living as its trigger, make sure that bathing is one of the listed activities, as mentioned in my post of July 10, 2014.)

For more information, visit Jim’s website.

Jim Koewler’s mission is
“Protecting Seniors and People with Special Needs.”

For help with long term care or with planning for someone with special needs,
call Jim, or contact him through his website.

© 2014 The Koewler Law Firm.  All rights reserved.

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