The Long-Term Care Partnership encourages Pennsylvanians to purchase long-term care insurance by providing dollar-for-dollar asset protection equal to the benefits paid by the policy. For example, a person whose qualifying policy paid for $100,000 of care would be entitled to keep $100,000 in assets if they need to apply for Medical Assistance in the future.
1. What is a Long-Term Care Partnership Policy?
A Long-Term Care Partnership Policy is a long-term care insurance product. Policies pay for some, or all, of the expenses associated with a spectrum of personal-care services, ranging from home care to skilled nursing facility care. These new polices are part of a nationwide effort that consists of private/public partnerships that encourage people to purchase long-term care insurance by allowing them to keep their assets if they ever exhaust their insurance and have to turn to Medical Assistance. Protected assets are not considered in determining eligibility for Medical Assistance or estate recovery.
2. How does a Partnership Policy differ from other long-term care insurance policies?
A Long-Term Care Partnership Policy provides the added benefits of offering those who own them a way to protect their assets, dollar-for-dollar, in the amount of policy benefits paid out on their behalf in the event they ever need to apply for long-term care benefits under Pennsylvania's Medical Assistance program. Additionally, a Long-Term Care Partnership Policy has beneficial tax treatment and requires inflation protection features that protect younger purchasers from increases in expenses caused by inflation. For most people, the benefits of a Partnership Policy are likely to cover all the care they will ever need. However, because of the unique asset protection feature, you won't have to impoverish yourself if you run out of benefit coverage and still need care.
3. What will it cover and how does it work?
A Long-Term Care Partnership Policy will cover some or all of the expenses for nursing home stays, community services such as adult day care, in-home care, assisted living facility care or a combination of these services. The type of care provided includes skilled nursing (daily nursing and rehabilitative care), intermediate (occasional nursing and rehabilitative care), custodial (personal needs such as walking, bathing, dressing) and home health care (part-time skilled nursing care, speech therapy, physical or occupational therapy).
4. Are these policies now available for sale in Pennsylvania?
We anticipate that Partnership Policies will be available in the very near future. If you are thinking about buying a policy now, please have our office take your information and put you on the list of persons to contact as soon as the coverage is available.
5. Are income levels or personal assets a factor?
Income levels and personal assets are important factors in determining if the purchase of a long-term care policy is right for you. Our office recommends considering long term care insurance if you own assets of at least $75,000 (this does not include your home or car); have annual retirement income of at least $35,000 for an individual or $50,000 for a couple.
6. Can I claim a portion of the premium I pay as tax deduction, if I purchase a Partnership Policy?
Yes, all Partnership Policies are "tax-qualified." The IRS allows you to claim a portion of the premium as a medical deduction, if you itemize your taxes and your medical and dental expenses exceed 7.5 percent of your adjusted gross income
