Overview
When Congress passed the Deficit Reduction Act of 2005 (DRA) it promoted the national expansion of LTC Partnership programs. The name comes from the “partnership” created between qualified private LTC policies and the public Medicaid entitlement program. When an individual insured under an LTC Partnership policy (also called a PQ policy) becomes eligible for Medicaid benefits, she may protect a portion of her assets above the amounts usually allowed by Medicaid. Under this program, the amount of assets that could be protected above the regular spend-down and estate recovery limits is equal to the amount of benefits paid by the PQ policy.
A PQ policy in any state besides CA, CT, IN and NY (these states were grandfathered by the DRA and special rules apply to them) will generally meet uniform standards regarding state residency, tax-qualification, and minimum consumer protection standards, but the principal difference between PQ and non-PQ policies is to be found in how they treat inflation protection.
|
Age at Policy Issue
|
Inflation Option of PQ Policy
|
|
Under age 61
|
Applicant must select “Annual Compound”, DRA did not specify a rate
|
|
Age 61 – 75
|
Applicant must select “Some Level” of Inflation Protection, eg. Simple
|
|
Age 76 or more
|
Applicant need not select any Inflation Protection, although it must be offered.
|
Since each state must pass enabling legislation to launch its own Partnership program, and there are many technicalities concerning how each state will handle exchanges of older policies, reciprocity with one another, acceptable inflation options, and what services its Medicaid program covers, it is best to consult a Partnership-Certified LTCA Insurance Specialist at
info@ltc-associates.com.
Source: CMS Disabled and Elderly Health Programs Group. Updated February 8, 2010.