subject: Long Term Care Partnership, Its History [print this page] Long Term Care Partnership, Its History Long Term Care Partnership, Its History
The creation of a new LTC insurance model was initially supported by the Robert Wood Johnson Foundation in the late 1980s. Its development aims in persuading more people in purchasing long term care. This model was termed as Partnership for Long-Term Care which has brought together states and private insurers to construct an innovative insurance products aimed at moderate-income people or those who are most at risk of future dependency on Medicaid to cover their needs of LTC.
The partnership program was fashioned in the best possible way to attract consumers who have little interest in purchasing LTCi. To show consumers a strong reliability and continuity with the program, States ensure that if benefits under a Partnership policy, does not sufficiently cover the cost of care, the consumer may qualify for Medicaid under special eligibility rules while maintaining a predetermined amount of assets, if rules on income eligibility are still valid and functional.
Early 1990s, the first four states that implemented the partnership program were California, Connecticut, Indiana, and New York. However, the implementation raised a few issues concerning its appropriateness with the use of Medicaid funds. As result, restrictions were enacted upon the further development of the program in accordance with the Omnibus Budget Reconciliation Act (OBRA) of 1993. These four states were allowed to continue, but the OBRA provisions ended the replication of the Partnership model in new states.
The demonstration of four states used two models of asset protection. California, Illinois and Connecticut have chosen a dollar-for-dollar model. In this scenario, the amount of insurance coverage is equal to the amount of property protected by the review, provided that the consumer needs to apply for Medicaid. For example, a consumer who bought a policy with a $ 100,000 benefit would be entitled to a maximum of $ 100,000 in nursing home care or long-term community. If the treatment was necessary, the individual would be able to apply for Medicaid coverage, while maintaining a value of $ 100,000 in assets.
While in New York, consumers had to purchase a more comprehensive benefit package defined by the state. Originally, the state mandated that the partnership policy will cover three years or six years of nursing care at home. Thus, guaranteeing consumers buying such a policy protection of all their assets when applying for Medicaid.
In Indiana on the other hand, it switched to a hybrid model in 1998. In this model, consumers can choose the dollar-for-dollar or the protection of entire property.
Data show that since 2005, more than 172 000 consumers in four states had an active policy of partnerships. Because the program is young enough and policies are generally purchased long before they are used, relatively few subscribers actually need LTC coverage.
