Where to Look for Long-term Care Insurance
Most people buy long-term care insurance directly from an insurance agent, a financial planner, or a broker. Some important points:
- States regulate which companies can sell long-term care insurance
- States regulate the products that companies can sell
- There are more than 100 companies offering long-term care insurance nationally, but 15 to 20 insurers sell most policies
- The best way to find out which insurance companies offer long-term care coverage in your state is to contact your state’s Department of Insurance
State Partnership Programs
Residents of some states may be able to find long-term care coverage through a State Partnership Program that links special Partnership-qualified (PQ) long-term policies provided by private insurance companies with Medicaid. These PQ policies:
- Help people purchase shorter term, more complete long-term care insurance
- Include inflation protection, so the dollar amount of benefits you receive can be higher than the amount of insurance coverage you purchased
- All you to apply for Medicaid under modified eligibility rules if you continue to need long-term care and your policy maximum is reached
- Include a special “asset disregard” feature that allows you to keep assets like personal savings above the usual $2,000 Medicaid limit.
The following example shows how a Partnership-qualified policy works:
- John, a single man, purchases a Partnership policy with a value of $100,000.
- Some years later he receives benefits under that policy up to the policy’s lifetime maximum coverage (adjusted for inflation) equaling $150,000.
- John eventually requires more long-term care services, and applies for Medicaid. If John’s policy was not a Partnership-qualified policy, in order to qualify for Medicaid, he would be entitled to keep only $2,000 in assets. He would have to spend down any assets over and above this amount.
- But because John bought a Partnership-qualified policy, he can keep $152,000 in assets and the state will not recover those funds after his death. John would only have to spend down his assets over and above the $152,000 in order to be eligible for Medicaid.
Since Partnership-qualified policies must include inflation protection, the amount of the benefits you receive can be higher than the amount of insurance protection you purchased. For example, if you have a Partnership-qualified long-term care insurance policy and receive $100,000 in benefits from it, you can apply for Medicaid and, if eligible, retain $100,000 worth of assets over and above the state’s Medicaid asset threshold. In most states the asset limit is $2,000 for a single person. Asset limits for married couples are often higher.
States must certify that partnership policies meet the specific requirements for their partnership program, including that those who sell partnership policies are trained and understand how these policies relate to public and private coverage options. To find out more about your state’s program, including which insurance agents are selling partnership policies, or to find out if your state offers a partnership program, contact your state’s Department of Insurance.
Many private and public employers, including the federal government and a growing number of state governments, offer group long-term care programs as a voluntary benefit, and generally:
- Employers do not typically contribute to the premium cost (as they do with health insurance), but they often negotiate a favorable group rate
- If you are currently employed, it may be easier to qualify for long-term care insurance through your employer than it is to purchase a policy on your own
- You should check with your benefit or pensions office to see if your employer offers long-term care insurance.
The U.S. Office of Personnel Management has additional information about the Federal Long Term Care Insurance Program for employees of the federal government.