The Long-Term Care Partnership model is a unique public/private insurance option designed to attract middle-income consumers who might not otherwise purchase long-term care insurance. States offer the guarantee that if benefits under a Partnership policy do not sufficiently cover the cost of care, the consumer may qualify for Medicaid under special eligibility rules while retaining a pre-specified amount of assets (though income and functional eligibility rules still apply). Consumers are thus protected from having to become impoverished to qualify for Medicaid, and states avoid covering all long-term-care costs.
As a part of the package of reforms included in the Deficit Reduction Act of 2005 (DRA), Congress lifted the moratorium on Long-Term Care Partnership programs that had been set in 1993. The expansion of the Long-Term Care Insurance Partnership model made possible by the DRA does not, for the most part, call for alterations in how Medicaid is administered. However, there are key aspects of Medicaid eligibility rules, including home equity and income limitations, exhaustion of benefit requirements, etc., that states must consider when implementing a Partnership program. This issue brief outlines those issues for state consideration.