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Senate, House Back LTC Partnership Program

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Both houses of Congress have passed a long-term care partnership provision strongly supported by the life insurance industry.[@@]

The provision was included in a budget bill the House passed Tuesday by a 212 to 206 vote and the Senate passed on Wednesday, 51 to 50.

Due to slight differences between the two versions of the budget bill, it must now go to a reconciliation committee representing both houses of Congress. Once the 2 sides agree, the revised bill can then be resubmitted to both houses for a new vote.

The LTC provision of the act would eliminate barriers that prevent states from sponsoring LTC policies. Although 4 states currently offer such partnerships, Federal law as it now stands makes it impossible to launch new ones.

Under the budget act’s partnership provision, an individual could purchase an LTC insurance policy approved by a state government. In return, the state would guarantee that should the policy benefits be exhausted, the government would cover the costs of continuing care through Medicaid. The senior would not be required to spend down all his assets first, as under current Medicaid rules.

For example, if a consumer buys an LTC partnership policy with $100,000 in benefits that are eventually exhausted, he or she can then protect an equal amount of assets, or $100,000, before using Medicaid.

In a statement following the Senate vote, the American Council of Life Insurers lauded Congress for advancing the legislation.

“The long-term care partnership provisions in the Deficit Reduction Bill of 2005 will go a long way toward providing consumers with the tools they need to protect their nest egg and plan for a secure retirement,” said ACLI president and chief executive officer Frank Keating.