The Benefits of Joining the State’s Long Term Care Partnership
Long term care is a difficult subject for the aging American population. As life expectancy rises, retired individuals are concerned not only about maintaining a comfortable lifestyle on their retirement savings but also worried about the eventual need for quality long term care and its associated costs. One way to plan for long term care is through the state’s long term care partnership.
What Does Long Term Care Partnership Mean?
Long term care partnership is short for the Qualified State Long Term Care Partnership program created by the Federal Deficit Reduction Act of 2005 (DRA). Originally established as a pilot program in California, Connecticut, Indiana and New York, the program now is available in 29 states, including Oklahoma, Missouri and Kansas.
This program is aimed at middle income Americans who do not have sufficient assets to afford long term care should they need it or to pay high premiums for individual long term care policies. Typically these individuals have too many assets to qualify for Medicaid assistance in their time of need.
Individuals who live in states that participate in the program can purchase long term care insurance through independent companies affiliated with the state in providing this specialized coverage.
How Does It Work?
While each state has implemented its own long term care partnership plan, in general individuals pay monthly premiums for a certain amount of long term care insurance, such as $100,000 or $150,000 coverage. In exchange for providing for their own health care, individuals are rewarded by receiving improved eligibility for Medicaid coverage if and when the long term care insurance benefits are exhausted.
Meanwhile, individuals who participate in the program may be able to deduct the long term care premiums as an itemized deduction on federal income taxes.
Participation in a long term care partnership insurance plan typically is recommended for women in their early to mid 60s.
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