Missouri will launch a new long term care partnership program on Aug. 1, Gov. Matt Blunt announced.
Missouri’s program will allow many individuals already owning LTC policies to exchange them for a partnership plan.
Including Missouri, about 10 states now offer policy exchanges as part of their partnership programs, says John Korte, manager of the life-health section of the state’s Department of Insurance, Financial Institutions and Professional Registration.
Missouri residents who bought LTC insurance before Feb. 8, 2006 can, if their policies meet certain requirements, ask their carriers to add partnership benefits to their policies at no additional charge. That date is when President Bush signed the Deficit Reduction Act, which enabled the partnerships. Under the DRA, partnership policies must provide inflation protection and be tax qualified under IRS rules.
The Missouri department “is very consumer-friendly and was adamant about the provision for exchanging existing policies,” says Lorie Smith, executive director of the Missouri Association of Insurance and Financial Advisors. The DIFP worked closely with MAIFA and its parent, the National Association of Insurance and Financial Advisors, to design its partnership program, Smith says.
Missouri allows consumers who bought LTC policies after Feb. 8, 2006 or whose policies don’t meet partnership rules to buy new policies from an insurer offering such plans. Its DIFP warns, however, that producers must ensure that a partnership policy is suitable for a customer before advising an exchange.
LTC partnership programs allow policy holders to coordinate benefits with state Medicaid rules. Partnership policy holders can shield $1 of assets in their estates from Medicaid for every $1 of LTC benefits purchased, should they ever exhaust their policies.
Carriers that intend to sell partnership plans on or after Aug. 1 must file certification forms with the state before that date.
About 25 groups are offering the required 8 hours of training to certify agents to sell the policies, says Korte of the DIFP.