Does Arizona Have a Long Term Care Partnership Program?

Yes, Arizona has a Long Term Care Partnership Program. This program is a collaboration between the state government, private insurance companies, and state residents who purchase long-term care Partnership policies. The purpose of the program is to make the purchase of comprehensive long-term care insurance more meaningful by linking these policies with Medicaid for those who continue to require care.

What is a Long-Term Care Partnership Program?

A Long-Term Care Partnership Program is a collaborative initiative involving state governments, private insurance companies, and state residents who purchase long-term care Partnership policies. The program is designed to make the purchase of shorter term, more comprehensive long-term care insurance meaningful by linking these special policies (Partnership qualified policies) with Medicaid for those who continue to require care.

The program was expanded by the Deficit Reduction Act of 2005, which emphasized the individual’s responsibility to pay for long-term care. Under the Act, it became more challenging to qualify for Medicaid paid long-term care.

Partnership qualified policies need to meet particular requirements, which can vary from state to state. They are generally required to offer comprehensive benefits, be Tax Qualified, provide certain specific consumer protections, and include state specific provisions for inflation protection.

A unique feature of the program is the ‘asset disregard’ which allows policyholders to keep assets that would otherwise not be allowed if they need to apply for Medicaid to receive additional long-term care services. For each dollar of benefits paid by a Partnership-qualified insurance plan, one dollar of personal assets is not counted towards the Medicaid eligibility limit.

This program aims to address the issue of unfunded liabilities in long-term care, one of the most significant financial challenges facing families and the government. It encourages private insurance to take the lead in providing for Americans’ long-term care needs.

In essence, the Long-Term Care Partnership Program provides a way for individuals to protect their assets while ensuring they have the necessary long-term care through a combination of private insurance and potential Medicaid assistance.

How Does the Arizona LTC Partnership Program Work?

The Arizona Long-Term Care Insurance Partnership Program is a collaborative initiative among the state government of Arizona, private insurance companies selling long-term care insurance in the state, and state residents who purchase long-term care Partnership policies. The program’s goal is to make purchasing shorter-term, more comprehensive long-term care insurance more meaningful by linking special policies with Medicaid for those who continue to require care.

Under the program, Partnership qualified policies must meet specific requirements, including offering comprehensive benefits, being Tax Qualified, providing certain consumer protections, and including state-specific provisions for inflation protection. These policies often differ from other long-term care insurance policies only in the amount and type of inflation protection required by the state.

A significant feature of the Arizona Partnership for Long-Term Care qualified policy is the ‘asset disregard’ provision. This allows policyholders to keep assets that would otherwise be disallowed if they need to apply for Medicaid to receive additional long-term care services. The amount of assets Medicaid will disregard is equal to the amount of the benefits the policyholder receives under their long-term care Partnership qualified policy. This feature can result in policyholders receiving benefits higher than the amount of insurance protection they originally purchased.

For example, if a policyholder with a Partnership-qualified long-term care insurance policy receives $300,000 in benefits, they can apply for Medicaid and, if eligible, retain $300,000 worth of assets over and above the State’s Medicaid asset threshold. In most states, the asset threshold is $2,000 for a single person, with more generous thresholds for married couples.

The Arizona Partnership for Long-Term Care program is designed to protect policyholders’ assets and independence, preserve their quality of life, and provide comprehensive coverage, including home, adult day care, and facility coverage. The program also offers a daily or monthly benefit, a choice of elimination period or deductible, a benefit period (pool of money), and discounts. The program is regulated by the state department of insurance, and there is no separate office in the government for the Partnership.

Who is Eligible for the Arizona Long-Term Care Partnership Program?

The Arizona Long-Term Care Partnership Program is available to residents of Arizona who meet specific requirements. To be eligible, individuals must purchase a Partnership-qualified long-term care insurance policy from a private insurance company participating in the program. Long-term care insurance policies are medically underwritten, meaning that applicants must meet certain health requirements to qualify for coverage. The younger the applicant, the more likely they are to qualify at favorable rates and lower premiums. Furthermore, the policy must meet certain state-specific requirements, most importantly it must provide inflation protection as per the age of the insured: automatic compound inflation for those 60 and younger, any form of inflation protection for those aged 61–75, and inflation protection is discretionary for those 76 and older.

The Partnership Program is designed to provide an incentive for individuals to plan for their long-term care needs. It does this by allowing individuals who have used up their insurance benefits to apply for Medicaid while disregarding assets equivalent to the amount of insurance benefits received. This makes it possible for individuals to qualify for Medicaid while retaining a greater amount of their assets than would typically be permitted.

It’s important to note that not every long-term care insurance policy qualifies for the Partnership Program. A qualified policy must meet specific state and federal requirements, including certain consumer protection standards. If an individual already has a long-term care policy and is unsure if it is Partnership-qualified, they should check with their insurance provider or the Arizona Department of Insurance.

What are the Benefits of the Arizona Long Term Care Partnership Program?

The Arizona Long-Term Care Partnership Program offers several benefits to those who purchase a qualified policy. The key benefits of the program include:

1. Income and Asset Protection: The program offers an ‘asset disregard’ feature that allows policyholders to retain assets that would otherwise disqualify them from Medicaid eligibility. The amount of assets that Medicaid will disregard is equivalent to the benefits received under the long term care Partnership qualified policy. For example, if a policyholder receives $300,000 in benefits, they could retain $300,000 worth of assets over and above the State’s Medicaid asset threshold.
2. Inflation Protection: Partnership policies are required to include inflation protection, meaning the benefits a policyholder receives can be greater than the original amount of insurance protection they purchased. This feature ensures that benefits keep pace with the increased cost of care.
3. Comprehensive Coverage: Most states, including Arizona, require Partnership policies to offer comprehensive benefits. This means they cover both institutional and home services.
4. Estate Recovery Protection: With a Partnership policy, the state will not seek to recover money spent for your care from your estate. In contrast, under traditional Medicaid rules, the state can require repayment from your estate for any costs paid by Medicaid.
5. Flexibility: These policies are designed to preserve a policyholder’s independence and quality of life. They offer the same benefits and options as non-Partnership policies and cost the same as non-Partnership policies. This includes options for daily or monthly benefits, choice of elimination period or deductible, and a range of coverage options including home, adult day care, and facility coverage.
6. Potential for Higher Asset Retention: In the event a policyholder exhausts their insurance benefits and needs to apply for Medicaid, the value of the benefits paid out under the policy are disregarded when calculating Medicaid asset eligibility. This can allow the policyholder to retain more of their assets while still qualifying for Medicaid.

Are There Any Disadvantages to Participating in the Arizona LTC Partnership Program?

While the program offers several benefits such as protection of assets and modified eligibility rules for Medicaid, there are potential disadvantages to participating in the Arizona LTC Partnership Program:

1. Qualification Requirements: To be eligible for a Partnership-qualified policy, individuals must meet certain health and medical criteria. This means individuals with certain health conditions or medications may not qualify for the program.
2. Inflation Protection: Partnership policies require mandatory age-appropriate inflation protection. While this can be beneficial, it may also result in higher premiums, especially for younger enrollees.
3. Limited Coverage: The program provides coverage up to a certain limit. Once this limit is reached, individuals must apply for Medicaid for additional long-term care services. This could potentially leave individuals without enough coverage if their care needs exceed the policy limit.
4. Policy Costs: While the cost of a Partnership policy is the same as a non-Partnership policy, these costs can still be significant. Premiums for long-term care insurance can be expensive, especially for older individuals or those with health conditions.
5. Medicaid Eligibility: Even with a Partnership-qualified policy, individuals must still meet the eligibility requirements for Medicaid, which includes income and asset limits. Although the program allows for an ‘asset disregard’, individuals may still have to ‘spend down’ other assets to qualify for Medicaid.
6. Potential Changes in Legislation: The structure and benefits of the Arizona LTC Partnership Program are subject to changes in state and federal legislation. This could potentially impact the benefits available to policyholders in the future.
7. Limited Recognition: Not all states recognize Arizona’s LTC Partnership Program. If an individual moves to another state, their policy may not provide the same benefits or Medicaid eligibility.

How Do I Apply for The Arizona Long Term Care Partnership Program ?

To apply for the Arizona Long-Term Care Partnership Program, follow these steps:

1. Purchase a Partnership-Qualified Policy: First, you need to purchase a Partnership-qualified policy from a private insurance company that sells long-term care insurance in Arizona. These policies must meet specific requirements, including offering comprehensive benefits, being Tax Qualified, providing certain consumer protections, and having state-specific provisions for inflation protection.
2. Assess Your Health: Just like traditional long-term care insurance, you need to medically qualify for a Partnership-qualified policy. This typically entails undergoing a health assessment to determine your eligibility. It is recommended to apply when you are younger as you have a better chance of qualifying and receiving lower premiums.
3. Understand the Asset Disregard Feature: One of the key features of a Partnership-qualified policy is the ‘asset disregard’ feature. This allows you to keep assets that would otherwise not be allowed if you need to apply for Medicaid to receive additional long-term care services. The assets Medicaid will disregard is equal to the amount of benefits you receive under your Partnership-qualified policy.
4. Apply for Medicaid (If Required): If you exhaust the benefits under your Partnership-qualified policy and require additional long-term care services, you can apply for Medicaid. The application process involves demonstrating financial need and meeting eligibility requirements. However, because of the ‘asset disregard’ feature of the Partnership Program, you can keep a significant amount of assets and still qualify for Medicaid.
5. Contact the State Department of Insurance: If you have queries or need assistance with your application, you can contact the state department of insurance. They regulate the policies and can provide information about the Partnership Program.

Note: If you already have a policy and are unsure if it is Partnership-qualified, you should contact your insurance provider for clarification. Remember, the state does not have a separate office for the Partnership Program.

Please remember that the application process may vary slightly based on individual circumstances and policy specifics. It’s always recommended to consult with a qualified insurance or legal professional to understand your options fully.

Frequently Asked Questions