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Take Advantage of State LTC Partnership Law

Take Advantage of State LTC Partnership Law  -  The Benefit of LTC Partnership Qualified Policies

The Situation: You want to protect your assets so you have the resources to both pay for your Long Term Care (LTC) and leave an inheritance for your children. Like most people, you know the need for care has the potential to stretch on for years. You also know care is expensive. So you look for ways to protect your assets. Under state LTC partnership law, long term care insurance policies can be partnership qualified. Owning a LTC partnership qualified policy allows you to protect a portion of your assets while giving you a Medicaid safety net in case you need extended care. Pursuant to the partnership law, you are allowed to keep assets that would otherwise have to be spent down to qualify for Medicaid. Those assets can then be used to pay for your care or to leave as an inheritance.

How it Works: You purchase a LTC partnership qualified long term care insurance policy, for example with a $200,000 policy limit. When you need long term care services, you first use your insurance policy benefits to help pay for your care. You eventually use your entire $200,000 policy limit. However, you still need care so you apply for long term care benefits under Medicaid. Because you own a partnership qualified long term care policy, you are allowed to keep $200,000 in assets that otherwise would have to be spent down to qualify for Medicaid, and those assets can be used to provide an inheritance for your children.

Partnership Programs Explained: Long term care partnership programs are alliances between states and private insurance companies. They are designed to encourage people to purchase LTC policies. Owning a LTC partnership qualified policy entitles people who deplete their policy benefits to retain a specific amount of assets and still qualify for Medicaid if they meet all other Medicaid eligibility requirements. Asset protection is on a dollar-for-dollar basis. For example, someone who owns a LTC partnership qualified policy with a $200,000 policy limit can protect $200,000 in assets from the required Medicaid spend-down requirements. In order to be considered LTC partnership qualified, the policy must be tax qualified and include the required inflation protection.