State Medicaid Partnership Plans Advance In Congress
By Trevor Thomas
High-net-worth residents of Connecticut, Indiana, New York and California are fortunate in that their states have long term care insurance programs offering private coverage that protects at least part of their assets once their policy benefits run out.
Residents of others states dont have that option. In those states, recipients risk the loss of all their assets in order to qualify for Medicaid.
The state partnerships ended when Congress passed the Omnibus Reconciliation Act of 1993, which amended the Social Security Act to bar such programs. That legislation reflected the view of many in Congress at the time, who were convinced that LTC insurance was strictly a tax shelter for the rich.
The federal ban against state LTC insurance/Medicaid partnerships soon could be removed. Sen. Larry Craig, R-Idaho, and Sen. Evan Bayh, D-Ind., introduced legislation in February that allows states to adopt LTC insurance partnership programs.
President George W. Bush has indicated he would sign such legislation if passed by Congress. However, it is uncertain whether the bill, introduced as S. 2077, will come to a vote this year, says John Greene, legislative director for federal and regulatory affairs for the National Association of Health Underwriters in Arlington, Va.
Insurance industry lobbyists are hoping the Senate Committee on Aging will take up the bill soon. But the committee, and indeed Congress itself, have a lot of other things on their plates right now, and they face a relatively short legislative session to consider them, notes Greene.
"They have only 90 days in this session," Greene says. "That gives them enough time to do appropriations and not much else."
Although supporters see the bill as a chance to boost sales of LTC insurance, not all producers are sure the legislation would make much of an impact.
"My associates in states where they do have it [the legislation] say they rarely do sell the plans," points out Marybeth Prescott, a LTC insurance specialist at Prescott Brokerage Services, Centerville, Mass. Therefore, she is not convinced a partnership program in her state would increase sales.
