What you need to know about the Pennsylvania Qualified State Long Term Care Insurance Partnership Program
Long-term care planning — It’s your responsibility.
With the signing of the Deficit Reduction Act (DRA) of 2005by President Bush in February 2006, the federal government has taken steps to encourage Americans to take more personal responsibility for covering the cost of their long-term care (LTC). One provision in the DRA allows states to establish QualifiedState Long Term Care Insurance Partnership (QSLTCIP) Programs.
The intention of these government-sponsored LTC programs is to:
- help protect the stability of state Medicaid programs
- promote the importance and value of private LTC insurance coverage
- offer Medicaid Asset Protection to consumers who buy LTC insurance, enabling them to protect an additional dollar amount of personal assets and still remain eligible to apply for Medicaid coverage of LTC services if needed
Pennsylvania has chosen to establish such a program.
Taking asset protection one-step further
LTC insurance is designed to help protect your assets and preserve your independence and quality of life in the event you require long-term care. Pennsylvania Partnership Program takes this concept one-step further—by offering Medicaid Asset Protection above and beyond the benefit currently available in LTC insurance policies.
What is Medicaid Asset Protection?
Medicaid Asset Protection is a means of protecting a portion of your assets that you would otherwise have to utilize, or “spend down”, in order to determine eligibility for Medicaid benefits that continue to pay for your long-term care. A Partnership-qualified policy enables policyholders to protect one dollar of personal assets for every dollar the policy pays out in benefits. The amount of an individual’s Medicaid Asset Protection is
equal to the sum of all benefits paid under the Partnership-qualified policy when he/she seeks to qualify for Medicaid. The total assets you are able to keep as a result of your Partnership-qualified policy are above and beyond all the regular resource allowances
under the Medicaid program, including any assets your spouse may be allowed to keep. It’s important to keep in mind that, while a certain portion of your assets may be protected, you are still required to apply your income toward the cost of long-term care in accordance with state Medicaid requirements.
Understanding the purpose and limitations of Medicaid
Medicaid is a program originally intended to help finance health care for those without the means to pay for private insurance. Over time, it has evolved into the primary public payer for long term care services provided in nursing homes (versus assisted living facilities or the home). In fact, Medicaid currently pays for nearly two-thirds of all U.S. nursing home residents. To qualify for Medicaid coverage of LTC services, rules normally require applicants to spend down their assets to a prescribed level. Until the Deficit Reduction Act passed, it was easier for people to transfer ownership of personal assets in order to qualify for Medicaid LTC benefits for which they would otherwise not be eligible. Over time, this has put a tremendous strain on the state’s Medicaid system, jeopardizing its ability to support its intended recipients— those who will truly need help in the years and decades to come.
What you should do NOW?
M any of us are going to be blessed with living L-O-N-G lives. With this wonderful opportunity, there will be long-term care consequences that will affect you and your family emotionally, physically, and financially. Without some type of solution in place, your long-term care choices will be limited and costly. There are now four realistic solutions. 1. Pay for long-term care out of your assets ($55,000- $100,000 per year for one person in this area). 2. Medicaid (spend down and lose assets and choices) 3. LTC Insurance to protect assets and have choices. 4. Pennsylvania Partnership LTCI Program. (Protect assets and have the “safety net” of the state program). The biggest mistake people make concerning long-term care is not learning all the facts. Find out what is best for you and your family NOW.
