What is the long-term care partnership program?

The Kentucky Long-Term Care Insurance Partnership Program is an agreement between

state government and private insurance companies to assist consumers in planning for

their long-term care (LTC) needs. The program was designed to increase awareness of

issues related to long-term care, to create ways to reduce Medicaid costs for nursing

home care, and to provide an incentive to consumers to purchase certain insurance

policies in order to protect assets from Medicaid spend down requirements.

How does the program

work?

agencies also have been in

close contact with federal

officials in the development of

this initiative. The asset

protection (explained in more

detail below) aspect of these

policies is an important element as it relates to Medicaid eligibility and spend down

requirements. Partnership policies may be sold after July 1. However, companies will

need to finalize plans and get approval from the Department of Insurance prior to selling

so consumers should not expect policies to be available immediately. Information on the

with the increasing costs of long-term care. The benefits of the policy will automatically

increase each year. Inflation protection is not required for individuals who are 76 years

old or older but the benefit is available at an additional cost.

All LTC partnership policies must be “federally tax qualified,” which means the benefits

you receive from the policy will not be considered taxable income. Contact your tax

advisor for information on deductions or tax incentives.

If your policy qualifies, you will receive a notice from your insurer offering you the

opportunity to exchange your policy for a long-term care partnership policy. Please pay

close attention to the time period you are given to respond. You will have at least 90

days.

Your current health status and age will not be considered for the new policy with the

same benefits. The company’s notice will include any premium change and a statement

that you will not lose any rights, benefits or value. In addition, you will receive credit for

satisfying pre-existing condition exclusion, elimination and incontestability periods.

Which insurers offer a partnership policy?

Every insurance company authorized to sell health insurance in Kentucky is authorized to

offer partnership policies but the insurer must receive permission from the Department of

Insurance prior to selling a policy.

Will insurance agents receive training on these new partnership policies?

Yes, companies are responsible for training agents before they will be allowed to sell

partnership policies. The special training will include details on how the policies work

with the Medicaid program.

would not be subject to estate recovery after your death, allowing you to leave a portion

of your assets to your heirs.

Generally, an unmarried person would not qualify for Medicaid until he/she has assets of

$2,000 or less. For example, if you have $100,000 in assets (stocks, bank accounts, etc.),

Medicaid would require you to spend down $98,000 in assets before you would be

eligible for benefits. However, if you have a long-term care partnership policy that has

paid out $50,000 in benefits, Medicaid would disregard $50,000 and you would be

required to spend down $48,000 in assets before you would be eligible.

programs. If you buy a partnership policy in Kentucky and later move to a state with a

partnership program and an agreement with the commonwealth, you may receive the

same dollar-for-dollar asset protection benefit from that state’s Medicaid program.

However, not all states participate in a reciprocal agreement so it is important to check

before you move.

Resources:

Insurance. This consumer guide contains information about long-term care options, long-

term care insurance buying tips, worksheets, a glossary and sample rates.

For a copy, you can go online:

http://insurance.ky.gov/ under Publications or call 800-595-6053 (in Kentucky) or 502-