subject: What To Know About Long Term Care Insurance Partnerships [print this page] Have you bought long term care insurance yet. If you have not, you are not alone. However, many state governments are working hard to get more residents to sign up for a private plan. They are doing this with state long term care insurance partnerships. These provide some incentives to encourage more residents to buy a plan. The programs do not cost anything extra, and they may help a lot of people save their assets.
Why do states care if you have long term care insurance or not? Medicaid is a state and federal program that picks up the tab for millions of US seniors. These seniors have already spent all their money, cannot afford long term care, and do not have private nursing care insurance. In response, both the federal US government and state governments want to get residents covered for the future. The federal government uses tax deductions for qualified policies as an incentive. These deductions reduce the real cost of insurance. Some states have long term care insurance partnerships to try and get more people to buy a private policy.
The partnerships require consumers to purchase a qualified plan if they want to participate in the plan. State rules may differ, so you need to look up the current and correct regulations in your own home state. If you do have a partnership qualified plan, and you run out of benefits, the state may allow you to qualify for Medicaid while protecting some assets. Most people have to spend nearly all of their money in order to qualify for Medicaid. The partnership will protect assets so the plan members can keep more of their money.
You could be free to buy a policy with a shorter payout term. For example, you may only need to buy a plan that pays out for 3 years. Once the 3 years are up, your assets are still protected. That may lower the policy cost. It could also allow you to budget for a plan with higher coverage levels.
The state gets a benefit too. They may have to pay a lot less money to their Medicaid program if more residents have coverage for, at least, 3 years! This benefit may save the state a lot of money if they can encourage more residents to purchase coverage.
Do you have a real need for nursing care insurance? This is a personal choice, and the right answer depends upon many things. Long term care expenses are very high now. They show every sign of rising in the future too. With tax deductions and partnership programs, you may even have an incentive to consider purchasing a policy.
by: Marilyn Katz
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