Public-Private Partnership Programs

Background

Under current Medicaid financial eligibility rules, individuals may not have more than $2,000 in assets. With long-term care insurance (LTCI) difficult to acquire, this leaves many people without options, even if they want to plan for and protect themselves from long-term services and supports (LTSS) induced financial hardship. One way to find innovative solutions to the challenge of LTSS financing is to pursue public-private partnerships where both sectors work together to create more options and protections. Some examples already exist including the partnership program between LTCI and Medicaid.

Under a partnership program, people who buy certain designated LTCI policies may protect a portion of their assets and still qualify for Medicaid, but only if they meet all the other Medicaid eligibility requirements. Most states have such programs.

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 LTCI or long-term services and supports more accessible.

PUBLIC-PRIVATE PARTNERSHIP PROGRAMS: Policy

Ensuring Medicaid eligibility

In this policy: FederalState

Programs that link Medicaid eligibility to the purchase of long-term care insurance (LTCI) should not limit the availability of Medicaid benefits for people with low incomes who need long-term services and supports and do not purchase LTCI.

Partnership policyholders who are eligible for Medicaid should be allowed to simultaneously receive Medicaid and LTCI policy benefits if required to meet their needs.

In states with medically needy programs, partnership policyholders should be permitted to spend down to meet Medicaid’s income eligibility criteria.

Ensuring consumer protections

In this policy: FederalState

Partnership programs should require LTCI policies to provide comprehensive benefits and to have strong consumer protections, particularly regarding nonforfeiture, inflation protection, and premium stability.

Such programs should guarantee the types of Medicaid services—particularly home and community-based services—that the state will provide to eligible partnership policyholders.

States should allow reciprocity with all other states’ partnership programs.

Meeting consumers' information needs

In this policy: FederalState

Programs should require those selling partnership policies to educate consumers to make informed decisions about whether a partnership policy is right for them, and, if so, which policy best meets their needs. Information must also be provided about Medicaid’s income requirements, and other eligibility requirements, and the state’s right to change them.

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.

States should:

  • 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, and

prohibit the future purchase option as an inflation protection measure for purchasers under the age of 61.

Home equity cap

In this policy: FederalState

Federal and state regulations should exempt purchasers from the home equity cap established in the Deficit Reduction Act of 2005.

State monitoring and reporting requirements

In this policy: FederalState

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. 

the number of partnership and nonpartnership policies sold by an insurer in the state and countr

Medicaid savings

In this policy: State

States should analyze the potential Medicaid savings of partnership policies by examining the current long-term services and supports Medicaid population to determine what portion of it would have been able to purchase LTCI (based on finances and medical underwriting criteria) in their 50s and 60s.

Reciprocity

In this policy: State

States should allow reciprocity with all other states’ partnership programs.

Agent training

In this policy: State

States should require training of agents who are authorized to sell partnership policies in the state.

Training should be specifically tailored to the knowledge of partnership policies and Medicaid eligibility.

Assigning benefts

In this policy: FederalState

All partnership policies should allow beneficiaries to assign their benefits to qualified service providers.