Long-Term Care Insurance

The Missing Link in Retirement Planning

Presented by

www.CTpartnership.org

What is Long-Term

Care?

A wide range of services designed to manage limitations caused by a chronic condition and to minimize further deterioration of physical and mental health.

THE RISK FORLONG-TERM CARE

THE COST OFLONG-TERM CARE

Who Pays for Long-Term Care?

Out-of-Pocket 21.7%

Private Insurance 7.3%

Medicare 19.2%

Medicaid 49.3%

Other Gov. Programs 2.5%

Note: Out of pocket expenditures include payments made by patients and families, and payments from other private sources. Source: Karen Tritz et al, Long-Term Care: Trends in Public and Private Spending, Congressional Research Service, April 11, 2006.

WHY LONG-TERM CARE

INSURANCE?

(1) Risk is high

(2) Cost is high

(3) MediCARE and health insurance do not pay for long-term care

(4) While MedicAID pays for long-term care, you have to be poor and eligibility rules are restrictive

(5) Partnership for Long-Term Care

(800) 547-3443

www.ctpartnership.org

Program Goals

Provide individuals a way to plan for their long-term care needs

Enhance standards of long-term care insurance

Provide public education

Conserve State Medicaid funds

Medicaid Spending for Long-Term Care in Connecticut

1986 2012

$317Million

1996

Billion$1.36Billion

Source: Medical Assistance Expenditures as of June 30, 1986; June 30, 1996; and June 30, 2012, State of Connecticut, Office of Policy and Management.

DECISION CHECKLIST FOR A POLICY

Where Will Benefits Be Paid

Daily/Weekly/Monthly Benefit

Lifetime Benefit

Inflation Protection

Elimination Period (deductible)

PARTNERSHIP CHECKLIST

State Endorsement

Medicaid Asset Protection

Strict Consumer Standards

Nursing Facility Discount

State Endorsement

Only Partnership long-term care coverage carries the State’s special endorsement for meeting strict consumer standards.

How Asset Protection WorksIf you continue to need care after your

Partnership policy has paid benefits, you may apply for assistance from Medicaid.

When determining eligibility, the Dept. of Social Services will disregard or ignore any assets you have up to the amount the Partnership policy has paid in benefits.

AssetsPolicy Benefit

PaymentsCountable

Assets

Person A Person B Person C Person D

$100,000 $100,000 $0 $200,000 $200,000 $0 $1,000,000 $200,000 $800,000 $200,000 $0 $200,000

BASIC PARTNERSHIP MODEL

Under current law, $1,600 of assets are excluded in determining Medicaid eligibility. This feature is ignored for the Countable Assets reported here.

Medicaid Asset Protection Medicaid Asset Protection is free.

Premiums for comparable Partnership and non-Partnership plans from the same company are identical.

Assets protected through the Partnership will not be recovered by Medicaid.

Must Reside In CT (or any reciprocal state*) At purchase and

issue of Partnership policy

When applying for and receiving MedicaidDollar-for-dollar reciprocity between CT and other states CT has a reciprocal agreement with (*see notes for additional information).

Reciprocity Compact

Dollar for dollar Medicaid Asset Protection between all states in Compact.

States can opt out of Compact with 60 days notice to the Federal Government.

Reciprocity Compact (cont’d)

Not important who CT has reciprocity with now, rather, the time reciprocity is important is when the policyholder applies to Medicaid.

All CT Partnership policyholders have reciprocity regardless of when they purchased the Partnership policy.

Use of Nursing Facility and Home Care*

Average length of stay in a nursing facility is approximately 2 1/2 years (for individuals 65 years of age and older)

Average length of time receiving home care services is 4.1 years

About half transition from home care to a nursing facility

*(see notes for additional information)

Greater Affordability

You need only buy an amount of insurance equal to the amount of assets you wish to protect

Greater rationale for purchase of shorter coverage

Strict Consumer Standards

1.1. Must offer option to purchase wide array of home and community-based services. Must include homemaker and other support services.

2. Extensive care management services must be part of the home care benefit

Assessment

Plan of Care

Coordination of Services

Monitoring of Services.

3. Minimum Daily Benefit Amount

Policies applied for in:

Nursing Facility

Home Care

2013 2014

$224 $235 $112

$117.50

4. Must provide automatic, compounded inflation protection on an annual basis without increases in premium.

5. Must offer shorter term coverage to those in danger of lapsing policy

6. Producers complete special training.

Guaranteed Discount

Only Partnership policyholders are guaranteed a 5% discount on nursing home rates in Connecticut.

Premiums

Premium Increases

Payment Modes:

Lifetime

Paid-Up

Waiver of Premium

Factors that Affect Premiums:

Plan Design Factors: Other Factors:

►Daily & Lifetime Benefits

►Elimination Period

►Age & Health

►Paid-Up Options

►Riders or Options ►Discounts (Spousal/Partner, Group, Association)

How long has the insurance company sold LTC insurance? How many LTC policyholders do they have?

Requested rate increases in CT or other states? If yes, what range?

Rate increases approved? Where, and how much?

Of new claimants submitting claims to start claim process, what % paid?

Questions to Ask Your Agent

Easy to read publications

Trained staff and volunteers for individual assistance

Toll-free number to access services (1-800-547-3443)

Website – www.ctpartnership.org

Free Services Available from the State

(800) 547-3443

www.ctpartnership.org

:

*Additional Notes and References:

Page # 6 & 7, Must Reside in CT (or any reciprocal state): The CT Partnership is a program for CT residents. Therefore, applicants must have a CT address (other than a P.O. Box), which reflects a place where they reside in CT. If an application is submitted with an out-of-state address, the application will not be processed by the carrier and will be returned to the agent.

CT is a member of the National Reciprocity Compact (Compact). Members of the Compact agree to provide dollar-for-dollar Medicaid Asset Protection to Partnership policyholders from any other state that is a part of the Compact (continued on next page) →

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*Additional Notes and References: Page # 6 & 7, Must Reside in CT (or any reciprocal state) cont’d:

Therefore, CT Partnership policyholders will be able to receive Medicaid Asset Protection in any other state that at the time they apply to Medicaid that state and CT are members of the Compact, and vice versa for Partnership policyholders applying to CT’s Medicaid program. In addition, CT and Indiana have a separate reciprocal agreement to honor Medicaid Asset Protection. The reciprocal agreement means that CT Partnership policyholders who apply to Indiana’s Medicaid program will have dollar-for-dollar Medicaid Asset Protection recognized by the State of Indiana and vice versa for Indiana policyholders who apply to CT’s Medicaid Program.

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Additional Notes and References (cont’d):

Page # 7, Use of Nursing Facility and Home Care:

Congressional Budget Office based on Celia S. Gabrel, Characteristics of Elderly Nursing Home Current Residents and Discharges: Data from the 1997 National Nursing Home Survey, Advance Data no.312 (Centers for Disease Control and Prevention, National Center for Health Statistics, April 25, 2000). CT Home Care Program for Elders: SFY 2010 Annual Report to the Legislature (July 2009 – June 2010), State of Connecticut, Department of Social Services, November 2011.