Long term care insurance can provide a source of funds to pay for long term care. Long term care insurance partnership policies are a special type of long term care insurance which help protect the assets of policy holders who subsequently seek Medicaid benefits. Partnership policies will match dollar-to-dollar the assets which a policyholder wishes to protect.
For example, you purchase a Partnership-approved private insurance plan with $100,000 Long Term Care coverage. When the time comes that long term care is needed, the policy will pay for long term care costs up to $100,000. After using up the coverage and if you continue to need care, you may apply for Medicaid. However, the Medicaid program in the State of Florida requires the applicant have only $2,000 of resources to be eligible for assistance (a spouse may have $109,560). There are stringent requirements and penalties for transferring assets in order to qualify. Under the Partnership program, policyholders may keep the assets equal to the amount paid out by the private insurance policy. Therefore, $100,000 worth of assets may be kept for a $100,000 insurance plan. Medicaid will not count $100,000 in assets and the policy holder will still be eligible. The assets that are protected can augment the basic care that Medicaid provides. If there are funds leftover after providing for extras, they can be passed down to the next generation.
Long-Term Care Partnership Program policies must be tax-qualified and contain annual compound inflation protection for persons under age 61 and compound inflation protection for those age 61-75. Inflation protection is optional for those 76 and older. While Florida participates in the Long Term Care Partnership Program, not all states do. If you plan to move to another state, check with its Medicaid eligibility agency to find out if they participate in the program. Also, while not all states recognize policies purchased in other states, Florida does honor long term care partnership policies purchased in other reciprocal states. To determine whether the state in which you purchased a long term care policy is reciprocal, please visit http://www.dehpg.net/LTCPartnership/StateReciprocity.aspx. You need to consult with an insurance professional if you have a partnership policy from a non-reciprocal state.