Long Term Care Insurance continued
Long-term care partnership *****
Since the cost of long term care needs are extremely expensive and many seniors end up turning to Medicaid for help with it, this puts a huge strain on the Medicaid system in Florida because we have so many seniors here. So Medicaid and the insurance industry have teamed up to create the Long-Term Care Partnership Program, which has the consumer buy long term care insurance and once that is exhausted they can qualify for Medicaid to pay the long term care need.
Normally, qualifying for Medicaid to pay for the long term care need requires that the individual basically go broke. However, by encouraging individuals to purchase a long-term care policy, they will qualify for Medicaid without having to go broke to do it, and Medicaid will pick up where the long-term care policy leaves off. This way, individuals don't have to be destitute to qualify, and Medicaid is not on the hook for the entire bill, so both parties win by meeting in the middle. The Long-Term Care Partnership Program provides dollar-for-dollar asset protection in the event the policyholder needs to apply for long-term care Medicaid assistance. For every dollar that the long term care policy pays out in benefits, a dollar of assets can be protected from Medicaid spend-down requirements. A policy marketed as an approved long-term care partnership program policy must meet the following criteria:
- Be a qualified long-term care insurance policy;
- Be issued to a Florida resident or another state that has entered into a reciprocal agreement with Florida;
- Be issued with inflation coverage that meets the inflation standards based on the insured's then-attained age. Policies issued to people younger than age 61 must contain annual compound inflation coverage.
- Policies issued to those between age 61 and 76 must contain annual inflation coverage.
The partnership policies must provide a disclosure notice, on the insurer's letterhead, indicating that the policy is an approved long-term care partnership policy, and this notice must be provided to the insured no later than delivery.
When an insurer is made aware that the policyholders have taken an action that will result in the loss of partnership status, the insurer must provide a written explanation of how such action may impact the insured, and how to retain partnership status.
