What is a Florida Long Term Care Partnership policy and why should I care?
The Long Term Care Partnership Program (LTCPP) was approved by Florida lawmakers in 2006 in an effort to make long term care policies a more attractive long term care planning option for all Floridians. The LTCPP is a public/private partnership designed to give a substantial incentive for Floridians to purchase long term care insurance. The incentive is the program assures Medicaid applicants who have participated in the LTCPP to protect their assets equal to the amount paid by the long term care policy for the cost of their long term care.
For example, if an individual purchases a $50,000 long term care insurance policy and the policyholder moves into a long term care facility exhausting the $50,000 over time to cover the Medicaid applicant’s care, they will be able to protect dollar for dollar countable assets above the ICP asset limits. For a Medicaid applicant’s spouse, the asset cap is currently set at $109,560 and $2,000 for the applicant. Therefore, the applicant with $50,000 in coverage will be able to protect $52,000 or their spouse will be able to protect $159,560.
Not all long term care policies qualify
In order to qualify for the Florida Long Term Care Partnership program, you must be a Florida resident at the time of purchase, inflation protection must be purchased and maintained until at least age 76 and the policy effective date must be on or after January 1, 2007.
Procedure
It is important you make sure your policy states Long Term Care Partnership on it. The insurance company must also provide you with two forms. Upon execution of the policy, the insurance company should issue a ‘Partnership Status Disclosure Notice’ and an ‘Approved Long Term Care Partnership Program Policy Summary’ when all benefits have been exhausted for the coverage of long term care.
What if you already have a Long Term Care Policy?
Contact your insurance provider to inquire if you can convert your current policy to a Long Term Care Partnership policy. Companies are required to exchange your long term care policy to a Partnership policy if purchased after March 1, 2003.
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Long Term Care Partnerships are a brilliant idea. The result is that fewer Baby Boomers will have to rely on Medicaid to pay for their long term care services. The Medicaid budget will not overwhelm taxpayers and Medicaid will be protected for the truly needy.
ReplyDeleteThose purchasing Partnership policies will have more choices for their care and their assets and income can be protected from nursing home and other types of long term care expenses. This will increase the financial security of the healthy spouse ("community spouse") as well as protecting assets for their children and/or heirs.
It is difficult enough to deal with the emotional burden when a spouse or family member needs long term care. Long Term Care Partnership policies help to alleviate much of the financial burden as well.
It has been mistakenly called "nursing home insurance". Less than 37% of claims on long term care policies are for nursing homes. More than 63% of claims are for home healthcare and community care.
The funny thing about long term care insurance is that the price of a policy can vary a lot from one insurance company to the next. Each long term care policy has a different way of charging premium based upon health history, marital status, choice of benefits, and even state of residence. It pays to shop.
Scott A. Olson
www.LTCInsuranceShopper.com