PARTNERSHIP PLANS
A Partnership plan is a long term care insurance contract that allows client to transfer or protect assets while they are receiving benefits. The transfer of assets does not trigger the five year lookback period for Medicaid eligibility.
The objective is to encourage people to purchase private long term care insurance. In doing so, they lessen the risk that the state will be responsible for paying for their long term care.
If the insured does exhaust their Partnership plan benefit, the cost of their care is assumed by Medicaid. It does require that the insured apply for Medicaid to qualify.
California, Connecticut, Indiana and New York were the first states to implement these plans starting in 1992.
How Does It Work?
A Partnership plan requires that the insured have a specified amount of benefit (in NY, it is a minimum of $314/day for 2018), a specified benefit period and a Cost of Living rider.
In NY, two different types of plans are offered; Dollar of Dollar and Total Asset.
A Dollar for Dollar plan allows an insured to transfer a dollar in assets for each dollar of long term care benefit received. For example if the client incurred $100,000 in eligible long term care expenses they could transfer or protect $100,000 in assets.
A Total Asset plan uses the same concept but has no cap on the amount of assets that can be transferred or protected.
One caveat to using a Partnership plan is that only assets owned by the insured are protected. Any income that the insured is receiving (e.g., pension payments, social security) cannot be transferred or protected.
For example, Mrs. Jones has a pension of $5,000/month. If she applies for Medicaid, this benefit will be applied towards paying for the cost of her care.
What Happens If The Client Moves To Another State When They Receive Care?
The client’s eligibility for coverage under the terms of their long term care contract does not change. What does change is the eligibility of a client to use the asset protection associated with a Partnership policy.
A client who purchased a plan in NY, but has now moved to another state. The state where they are now residing determines if asset protection under a Partnership policy is available.
The answer depends upon whether their current state of residence has an approved Partnership plan.
For example, North Carolina has an approved plan but Vermont does not (see States With Approved Partnership Plans.pdf).
A state that does have an approved plan has the option of honoring another state’s plan for Medicaid eligibility (called reciprocity).
Alaska, California, Hawaii, Illinois, Massachusetts, Michigan, Mississippi, New Mexico, Utah and Vermont are the states that do not have reciprocity agreements.
