Medicaid is a state-government-administered program that pays the medical and long-term care expenses of poor people. If you have more money than your state permits when you need long-term care services, your state’s Medicaid won’t pay for those services. You’ll have to spend your own money–including using up your assets–until you become poor enough to qualify.
But if you live in California, Connecticut, Indiana or New York and you participate in the state’s Partnership for Long-Term Care program, you can qualify for Medicaid without spending yourself into poverty. To participate in the Partnership, you must buy a long-term care insurance policy that contains at least the basic benefits required by the Partnership program.
What’s the benefit of participating in the Partnership? If you live in California, Connecticut, or Indiana, for example, and you
For example, suppose the long-term care policy has paid $50,000 in benefits; in that case, you can keep $50,000 in investments or savings and still qualify for Medicaid. Without a Partnership long-term care policy, you’d probably have to spend virtually all of that $50,000 (this is called spending down) before you became eligible for Medicaid to pay your long-term care bills. However, even under the Partnership program, although you get to keep your assets, you might still have to use part of your income to pay long-term care expenses.
Connecticut and Indiana have a reciprocity agreement, so that if you buy a policy under one state’s Partnership program and move to the other state, you can obtain the benefits of the other state’s partnership program.
Each state’s program is different, so be sure to learn the details of your state’s Partnership program before buying a long-term care policy.
In California, for example, the basic benefits include the following:
Under the California Partnership program, two types of policies are available–one that covers only benefits delivered in a nursing home or residential care facility, and one that covers comprehensively (at home, in a community facility, in a residential care facility, or in a nursing home).