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Big Industry Push For LTC Partnerships

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The health insurance industry is asking Congress in the strongest terms to include a provision in budget reconciliation legislation that would allow nationwide use of so-called long term care partnerships under the Medicaid program.

In a Nov. 30 letter to the House, America’s Health Insurance Plans is asking conferees on the budget proposal to consider expanding existing language in differing House-Senate bills grandfathering existing long term care insurance policies.

Adding such language, AHIP says in the letter to House conferees, would “ensure a seamless transition for current policyholders.”

In addition, AHIP writes, “we encourage you to consider establishing reciprocity among states so that seniors may choose to retire when they care to without fear of losing the benefit of their long term care partnership policy.”

The LTC partnership program allows consumers who purchase LTC insurance policies to fully use their benefits before qualifying for Medicaid, and also allows them to protect their assets.

The provisions are included in both the House and Senate versions of budget reconciliation legislation. Conferees are scheduled to start work on reconciling different versions of the program when the House returns to work Dec. 5.

The Senate is not due back until the week of Dec. 12.

AHIP’s letter was written to Rep. Joe Barton, R-Texas, chairman of the House Energy and Commerce Committee, and conference chairman.

In the letter, signed by Karen Ignagni, AHIP president, the trade group makes clear that, in general, it supports the House version of the legislation. The American Council of Life Insurers is also lobbying for inclusion of the partnership program in the budget reconciliation package, but the AHIP letter is more explicit in stating why it supports specific provisions of the legislative language.

By using their insurance coverage first under the partnership program, consumers can protect an equal amount of assets as defined in their policy, the letter said. There also can be considerable cost savings to Medicaid, insurance industry trade groups point out.

Currently, partnership programs are only available in California, Connecticut, Indiana and New York. They were created as part of a demonstration program that gave states flexibility in deciding what types of information to report.

“As long term care partnerships are expanded from the current demonstration to all 50 states, it is important to have consistent rules,” Ignagni states in the letter.

One critical issue during the conference will be the appropriate language regarding asset transfers. ACLI supports language in the House bill that allows consumers to protect their assets dollar for dollar through purchase of an LTC policy. The Senate bill limits asset protection for partnership policies to $250,000.

ACLI sees this as providing considerable cost savings to the Medicaid program, and therefore the states.

However, in the letter to Barton, AHIP’s Ignagni said the issue of asset transfer “should be addressed as part of a broad-based strategy, along with the expansion of partnerships to shore up the Medicaid program and meet the challenges associated with the high cost of long term care.”

“We encourage you to consider establishing reciprocity among states so that seniors may choose to retire when they care to without fear of losing the benefit of their long term care partnership policy,” wrote AHIP President Karen Ignagni to the chairman of the conference committee considering budget reconciliation bills.


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