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December 16, 2013 at 12:12 PM
It has been more than five years since the partnership between Medicaid and private long-term care insurance (LTCI) started, and the program is a very well kept secret in most locales.
The partnership concept was designed to give an incentive to Americans of modest means to purchase at least some long-term care (LTC) insurance.
If one could not afford a Cadillac plan, many felt it not worthwhile getting any coverage at all, especially since the government paid for LTC through Medicaid.
The partnership was to change this by offering an incentive to purchase LTCU coverage, an incentive with no government give-away up front followed by the hope of recovering something in return later.
If you purchased a partnership LTCI policy, and after claiming and collecting on it, either need more cash flow for a higher level of care, or exhausted the policy, you could apply for Medicaid without first becoming impoverished. Medicaid would “asset ignore” assets equal to what the partnership LTCI had already paid out.
What a concept, no income tax incentives required (other than the tax-deductibility of the premiums), people buy insurance, use it, and if they need additional help from Medicaid later, they do not need to spend down to Medicaid impoverishment.
The (future) Medicaid recipients would have taken some personal responsibility and paid for all or a portion of their LTC using their income, assets, or their partnership LTCI before needing Medicaid. Assets equal to what the LTCI had already paid out would be ignored. (income is still counted).
