Public-private partnerships also can encourage the purchase of long-term care (LTC) insurance. Under this approach, people who buy and use certain LTC policies may protect a portion of their assets and still qualify for Medicaid if they meet all the other Medicaid eligibility requirements.
Most states have such programs and offer partnership policies to consumers. States with partnership programs are not required to recover from an individual’s estate any resources protected by a partnership policy.
Even with a partnership policy, purchasers have no assurance that the Medicaid services they will qualify for many years in the future will be the same as those now covered by their policy. Public education about this financing option is critical. There should be a search for other innovative approaches that use public and private resources to make LTC insurance or long-term services and supports more accessible.
Public-Private Partnerships: Policy
Impact on Medicaid eligibility
Programs that link Medicaid eligibility to the purchase of long-term care insurance (LTC) should not endanger the Medicaid safety net for low-income people who need long-term services and supports (LTSS).
People who purchase partnership policies should be allowed to access Medicaid while receiving benefits under their policy if benefits are inadequate to cover the cost of needed services and policyholders are otherwise eligible for Medicaid.
Partnership policyholders should be permitted to spend down to meet Medicaid’s income eligibility criteria (this would require that all states have medically needy programs).
Programs that link Medicaid eligibility to the purchase of LTC insurance should contain strong consumer protections, particularly regarding nonforfeiture and inflation protection, premium stability, and clear disclosures of current income requirements for Medicaid benefits (along with the state’s right to change those requirements).
Such programs should guarantee the types of services (particularly home- and community-based services) that the state would provide to eligible partnership policyholders under Medicaid.
Federal and state agencies should establish clear and simple documentation requirements to ensure purchasers’ smooth access to Medicaid.
Partnership policies should be clearly described and written in plain language.
- set out suitability standards for partnership policies and clearly educate consumers about Medicaid eligibility standards,
- establish the specific inflation protection standards that a policy must provide to qualify as a partnership policy in the state,
- educate consumers that compound inflation protection offers the best assurance of future benefit adequacy,
- prohibit the “future purchase option” as an inflation protection measure for purchasers under the age of 61, and
- educate consumers so they can make informed decisions about whether a partnership policy is right for them and, if so, which policy best meets their needs.
Home equity cap
State monitoring and reporting requirements
Federal regulation should require states to report:
- policy costs and features, policyholder demographics, and asset protections earned;
- the number of individuals who apply for, purchase, or are denied policies; who use benefits under their policies; who apply for Medicaid; and who are denied or granted Medicaid eligibility;
- the length of time between policy purchase, use of benefits, Medicaid application, Medicaid eligibility being denied or granted, and lapse rates;
- Medicaid expenditures for those who purchase policies and the amount spent on services by the insured while using the policy; and
- the number of partnership and nonpartnership policies sold by an insurer in the state and country.
States should analyze the potential Medicaid savings of partnership policies by examining the current LTSS Medicaid population to determine what portion of it would have been able to purchase LTC insurance (based on finances and medical underwriting criteria) in their 50s and 60s.
States should allow reciprocity with all other states’ partnership programs.
States should require training of agents who are authorized to sell partnership policies in the state.
Training should be specifically tailored to knowledge of partnership policies and Medicaid eligibility.