Under current Medicaid financial eligibility rules, individuals may not have more than $2,000 in assets. In addition, long-term care insurance (LTCI) is difficult to obtain. This leaves many people without options to protect themselves from the high cost of long-term services and supports. One innovative solution to this problem is public-private partnerships in which both sectors work together to create more options.
One option is the Partnership for Long-Term Care, a public/private alliance between state governments and insurance companies. Through the partnership, people who buy certain designated LTCI policies may protect a portion of their assets and still qualify for Medicaid as long as they meet all other Medicaid eligibility requirements. Most states have chosen to participate in the Partnership for Long-Term Care.
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.
PUBLIC-PRIVATE PARTNERSHIP PROGRAMS: Policy
PUBLIC-PRIVATE PARTNERSHIP PROGRAMS: Policy
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.
Partnership programs should require LTCI policies to provide comprehensive benefits and to have strong consumer protections, particularly regarding non-forfeiture, 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.
All partnership policies should allow policyholders to assign their benefits to qualified service providers.
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.
Consumers' information needs
Programs should require those selling partnership policies to educate consumers to make informed decisions about whether a partnership policy is right for them. If so, they may need advice as to 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’ timely and uncomplicated 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, and
- prohibit the future purchase option as an inflation protection measure for purchasers under the age of 61.
State monitoring and reporting requirements
Federal regulation should require states to report:
- policy costs and features, policyholder demographic data, 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 long-term services and supports Medicaid population. They should determine what portion of the population would have been able to purchase LTCI (based on finances and medical underwriting criteria) in their 50s and 60s.
Need for innovative approaches
The federal government and states should consider other innovative approaches that use public and private resources to make LTCI or LTSS more accessible.