Long Term Care Partnership Program Expanded

LTC Insurance

Moving Long Term Care Insurance in the Right Direction

Today, the Deficit Reduction Act of 2005 passed the Congress and is ready for President Bush's signature. The legislation, estimated to save the federal government $38.8 billion over the next five years, permits the nationwide expansion of the Long Term Care (LTC) Partnership Program and tightens Medicaid long term care eligibility rules.

The LTC Partnership Program allows people owning state-approved, tax-qualified Long Term Care insurance policies to qualify for Medicaid without spending down their life savings. The Deficit Reduction Act repeals the restriction that limited the program to five states. Policies sold under the program must be federally qualified, and insurers are required to offer a policy with some level of inflation protection, although they may also offer those without that protection.

"We are pleased that Congress has expanded the LTC Partnership Program," stated Angie Hunter, CAHI federal affairs director. "Making the Partnership program available to all Americans is the first step towards encouraging individuals to take financial responsibility for their future health care needs and protect their assets by purchasing Long Term Care insurance."

Additionally, the Deficit Reduction Act contains provisions intended to tighten Medicaid Long Term Care eligibility rules, including making it more difficult to qualify for Medicaid coverage by extending the look-back period for transfers of assets from the current three years to five years and by denying Medicaid coverage of nursing home care to any person with home equity exceeding $500,000. States may elect an amount up to $750,000.

"By providing individuals with the proper incentives to plan for their own long term care needs," said Merrill Matthews, CAHI director, "Congress can reduce the number of people dependent on Medicaid and allow the program to do a better job for its proper clientele: the poor. CAHI applauds Congress for taking this timely and important step."

For more information visit http://www.cahi.org