NPR recently ran a program on the impact long term care costs will have on our aging society.  One of the ways these costs will be (or at least ) are intended to be shifted from the government entitlement programs, such as the Medicaid program, is for baby boomers to purchase long term care insurance.  To help encourage baby boomers to purchase this product, in February, 2006 President Bush signed into law the Deficit Reduction Act (DRA).  A component of the DRA is the Long Term Care Insurance Partnership Plan (Plan). 

 Under the Plan, certain types of long term insurance plans will provide significant economic benefits for those persons purchasing it.  What this Plan does, among other things, is to provide a “dollar for dollar” benefit so owners of this insurance can have more assets in their possession when, and if, they ever require the need for government benefits to pay for long term care, whether at home or in an approved facility.  For example, purchasing $250,000 of long term care insurance benefit allows the policy owner to own up to $250,000 of assets and still be able to obtain Medicaid benefits to pay for their long term care needs!  Since the general rule on assets is an applicant can’t have more than $2,000 of “countable resources” to apply for long term care medicaid benefits, by purchasing a long term care partnership insurance plan of $250,000 will allow an applicant for benefits to keep not just $2,000 but $252,000 of resources!  This means you do not have to be poor to have benefits; you can leave assets to loved ones at your death and not worry the government will take them.

Only a few companies can write these Plans now; however, more will be able to sell them once the state insurance commissioner approves each submitting company’s Plans.  Check with an elder law or estate planning attorney to make sure any policy of insurance you are purchasing is a Plan policy and will give you the “dollar for dollar” benefit.  The requirements for any Plan policy will depend on your age at time of purchase.  Feel free to contact me at 904-268-7227 or at rmorgan@flfirm.com to get any additional information or explanation if you have questions.