Advanced Underwriting Consultants

Question of the Day – May 3

Ask the Experts!

The professionals at Advanced Underwriting Consultants (AUC) answer the tax and technical questions posed by producers.  Here’s the question of the day.

Question: My state supports a long term care (LTC) insurance Partnership Program.  Can I use a life product that has a LTC feature (a “hybrid product”) in conjunction with the Partnership Program?

Answer: No.

According to the U.S. Department of Health and Human Services:

The Partnership Program is a collaboration … among a state government, the private insurance companies selling long-term care insurance in that state, and state residents who buy long-term care Partnership policies. The purpose of the Partnership program is to make the purchase of shorter term more comprehensive long-term care insurance meaningful by linking these special policies (called Partnership qualified or PQ policies) with Medicaid for those who continue to require care.

Partnership qualified policies must meet special requirements that can differ somewhat from state to state….

Partnership policies must be certified by the State as meeting the specific requirements for the Partnership Program….

A Partnership qualified policy provides you, as the purchaser, with the right to apply for Medicaid under modified eligibility rules that include a special feature called an ‘asset disregard’. This allows you to keep assets that would otherwise not be allowed if you need to apply, and qualify, for Medicaid in order to receive additional long-term care services. The amount of assets Medicaid will disregard is equal to the amount of the benefits you actually receive under your long term care Partnership qualified policy.

As far as we know, no state has ever approved a hybrid policy for its Partnership Program.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day.