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Long Term Care Insurance Partnership Program 

June 2019

With the large numbers of Baby Boomers coming into their 70s now, the government recognized that there would be an incredible strain on the Medicaid system. Medicaid is by far the biggest payor for long term care. The majority of individuals in skilled nursing homes are paid for by Medicaid. When the Baby Boomers hit their 80s and 90s and need care, the system will be strained. For this reason, they have come up with a very ingenious plan.

Today, if you don't have a long term care policy, and you need nursing care, all the money that you have saved will have to be spent to the last $2000. You can keep your home and car, but everything else goes. This is called Medicaid Spenddown. Medicaid has a look back period of 5 years. If you gifted money to a child or grandchild or charity up to 5 years ago, that will delay your admittance into Medicaid, or mean that Medicaid will join the probate for the money when the house is sold. It is a very tough position to be in. The government controls your money and what you are doing with it. They turn you into a pauper in order to get care.

Enter the solution congress came up with. The Long Term Care Insurance Partnership. Medicaid has partnered with the Long Term Care Insurance companies to find a way for more policies to be used and then coordinate the care billing so that the policy pays first and Medicaid comes in if there is still a need. They will not be the only payor in these situations.

Today, if you have a qualifying Long Term Care insurance policy, and that is you purchased a stand alone policy on your own, the Medicaid restrictions are gone if you reach the point of needing care. The look back period is gone, the gifting issues are gone, no spend down required and Medicaid won't have their hand in the probate of the estate. If you need to go into a nursing care, the policy will pay first. If there is still a need for care when the policy is all paid out, Medicaid will pick up the rest. This is a big change, and a big opportunity for those in the middle income ranges to be sure their goals for their money are achieved.

Long Term Care insurance is probably the least understood as well as least purchased insurance policy. There are several reasons for this. 

In the past, marketing was focused on those with high incomes. It was a way to protect their savings from being used for expensive care later in life. The policies were relatively restrictive and didn't always meet what the client needed when the time came to use the policy. 

Fast forward to today. The policies are written very differently. They are directed more to the needs of policy holders. They are more flexible. Some are designed for two people, have inflation protection, will cover care in various settings.

Long Term Care insurance is expensive if you buy it when you are 70. If you start with a policy at a younger age, the policy will be much less and grow larger. 

We insure our houses, but few of us ever have a major claim, or any claim. We pay for car insurance. Many of us have never had an accident. We will pay for trip insurance so that we can avoid losing our money if something happens and we can't go. In reality, most of us will need some help at some point. Talk with us about the different policies we offer and you will be surprised at what is available today.