What would happen if you still needed care after your Long Term Care insurance policy is exhausted?
The Partnership program was introduced to Colorado effective January 1st 2008, as a part of the “Own Your Future” campaign. The campaign is designed to increase awareness of the negative consequences of poor Long Term Care planning, both financial and emotional, to Colorado citizens. The new program introduced with the campaign is called the “Colorado State Long Term Care Partnership Program”. The Colorado Long-Term Care Partnership program is an alliance between Long Term Care insurance companies, Colorado’s Medicaid program, the Division of Insurance, and the Department of Human Services. It enables Colorado residents who purchase a Partnership qualified Long Term Care insurance policy to have asset protection for Medicaid services. For more information order a Long Term Care Colorado Partnership Brochure request form
How does the Partnership program work?
For every dollar that your Long Term Care insurance policy (LTCi) spends on your care, the state has agreed to protect that same dollar amount against the Medicaid spend down requirements.
If your Long Term Care policy stopped paying and had used up all its benefits of $100,000. You must then spend down your assets until you reach the Medicaid qualification level. Because your Long Term Care policy paid out $100,000 your new qualification level is $100,000, which means you now only have to spend your assets down to $100,000, then you will be eligible for Medicaid. Without your qualified Long Term Care policy, you would have had to spend down your assets down to $2,000 instead of $100,000.
Colorado is using this approach to give its citizens greater control over how they finance their Long-Term Care and to help shore up the public safety net against upcoming demographic pressures.
How does the Colorado State Partnership program affect me?
The Colorado Partnership program gives Coloradans with a qualified Long Term Care policy the additional peace-of-mind knowing that they will not have to use up all of their savings for the cost of their care. This enables them to accomplish their estate planning goals such as passing on a legacy or taking care of their spouse, while also making the protection affordable. Although all Coloradans can take advantage of the Partnership program, it is generally designed for Coloradans with assets between $100,000 and $500,000. Colorado is using this approach to give its citizens greater control over how they finance their Long-Term Care and to help shore up the public safety net against upcoming demographic pressures. In the past, a Long Term Care insurance policy that covers the entire estate may have been too expensive, now, thanks to the Partnership Program, the protection is designed to be affordable.
How does HealthCare Benefit Services work with the CO Partnership program?
HealthCare Benefits Services is working directly with the state helping to provide information about the new Partnership program to Colorado residents. H.C.B.S president, Tammey Sullivan was a key component in bringing the Partnership program to the state of Colorado. She was a speaker at the “Own Your Future” press conference in July 2009. (see video here) We make sure all our clients are educated on how the program works, and will make sure your Long Term Care policy is qualified for the benefits of the program. Order a copy of your Free Colorado Long-Term Care Partnership Brochure or contact us with any questions.
Colorado Partnership Plan Eligibility Criteria
A Long Term Care insurance policy becomes a Colorado Partnership Long Term Care insurance policy if the policy is created with the appropiate criteria as required by the state of Colorado. There are three main factors that determine Partnership eligibility:
- The policy must be written after January, 1 2008
- Must be tax-qualified – “Short Term Care” policies with 360 day limits are NOT tax-qualified and will NOT be Partnership eligible. A majority Long Term Care insurance policies written are “tax-qualified”, this means you may file your Long Term Care insurance policy as a part of your annual health expense on your tax return (consult a tax professional for specific details).
- The “inflation rider” portion of your Long Term Care policy – The required amount for the inflation rider is determined by your age. (see below) The inflation rider determines the rate at which the policy maximum and overall benefits will increase on an annual basis. The rider is designed to keep up with the rising cost of care. An inflation rider is not automatically included in your policy but is a very important factor when designing a Long Term Care insurance policy, and should be discussed in depth with your agent. Your inflation rider can vary in amount, and will significantly impact the effectiveness of your policy when the time comes to place a claim. A 5% compound rider is currently the highest the industry has to offer.
Colorado Partnership Long Term Care policy inflation rider requirements:
Age 60 or younger: Any automatic compound inflation rider required
Ages 61-75: Any automatic inflation rider required (with exception of Guaranteed Purchase Option, or GPO)
Age 76 and older: No inflation rider required, all Tax Qualified policies are automatically Partnership Eligible.