With the increased awareness of the growing need for it, long term care insurance has become a hot topic. Sales are up, and more states are implementing LTC insurance awareness campaigns while also adopting partnership programs, a collaborative effort between states and insurance companies created to reduce Medicaid spending.
Additionally, LTC costs are a major legislative topic and will be a significant issue in the upcoming presidential election.
As partnership programs expand, it has become important for producers to be aware of state-mandated training requirements for selling these LTC insurance policies. These requirements are above what is required for a basic life and health license.
The Deficit Reduction Act of 2005 made major changes to the Medicaid law by increasing the restrictions Congress put into effect years ago on gifts and transfers of assets to heirs. This has made it harder to for those needing long term care to qualify for Medicaid benefits.
At the same time, the DRA expanded the right of states to create partnership programs. These are designed to cut Medicaid costs by delaying or eliminating the need for some people to rely on Medicaid to pay for LTC services. That’s because purchasing a partnership plan allows policyholders to be eligible to receive Medicaid benefits if they should ever use up all their LTC insurance benefits.
Partnership plans have expanded beyond the original partnership states of California, Connecticut, Indiana and New York. As of August 2008, this expansion includes Arkansas, Colorado, Florida, Georgia, Idaho, Kansas, Minnesota, Missouri, Nebraska, New Jersey, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota and Virginia.
In addition, Nevada and Texas have approved partnership legislation, although their programs are not yet active, while Michigan, New Hampshire, Tennessee and Wisconsin also have partnership plans pending.
As a result, most states have adopted the training requirements for selling partnership policies and are demanding that all licensed producers take an initial 8-hour training course in selling the policies. This training must be approved by the National Association of Insurance Commissioners and must also be followed by a 4-hour refresher course every 2 years.
A few states have even adopted training requirements above those mandated by the NAIC. Because the requirements can vary by state, it is important for those selling LTC policies in more than one state to know the requirements, although some states do offer training reciprocity for partnerships.