California Long Term Care Partnership Program

California was among the first set of states to approve an innovative public-private partnership for funding Long Term Care called a Long Term Care Partnership program. A small number of select private insurers sell qualified plans. No other policy sold in California offers lifetime asset protection via Medi-Cal.

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How Do I Benefit from Partnership?

A California Long Term Care Partnership policy sets up a pre-defined amount of asset protection for the purposes of qualifying for Medi-Cal in the future. For example, you could buy a policy today that will provide a Long Term Care benefit of $500,000 when you are 75 years old. Once that policy's benefits are exhausted, the Medi-Cal program would disregard the same amount, or $500,000 of your assets when considering your eligibility for state assistance to pay for care.

In addition to the monetary savings that come with Partnership plans, there is an additional regulatory authority that oversees the administration of LTC policies. What this means for you as a consumer is that your LTC policy may be less prone to rate increases because of the extra layer of authority at the state level.

Finally, Partnership policies come with a provision that requires enhanced Care Coordination. This insurance company-paid benefit provides access to caregiver resources that you may not find independently or even included with non-Partnership policies. This benefit alone is one reason some Californians purchase Partnership policies rather than rolling the dice and self insuring.

Caveats: Few salespeople will mention this, but the fact is that there is more to qualifying for Medi-Cal than just the amount of assets you have. Here's a list from the state of ways you may qualify, but there are complex rules, especially regarding your income and assets.

How Do I Qualify for Benefits?

Partnership-approved policies are available from several insurers in California, including Genworth, and NY Life. The state requires that you purchase $5,580 in monthly benefits per person, or $180 per day*. You may buy as little as 365 days of coverage, meaning your "pool of money" could be as low as $65,700 for a Partnership policy.

You may scale back Home and Community coverage to as low as $90/day and Assisted living coverage to as low as $126/day. This policy requires a 30-day elimination period, no longer period is available. (This is a relatively low "deductible" for LTC coverage!)

*(These figures last updated January 22, 2014, and subject to change.)

Cost of California Partnership Plans

Because you must buy 5% compounded inflation protection, many in the industry have written about the irrelevance and high cost of Partnership options. For the coverage listed in the prior paragraph, summarized as:

[codebox line_numbers="true" remove_breaks="true" lang="html"]$180/day Facility
50% Home Care
70% Assisted Living Care
30-day Elimination Period
5% Compounded inflation increases (The gold standard)
Premium for a married 60-year old: $1,691.41 with one company we checked.
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You can get exact costs by starting a quote with the form at the bottom of this page (by entering your date of birth).

What's the Downside?

The downside to Partnership policies is twofold in California:

1. Because you must buy 5% Compound inflation protection (at age 65 and below, where most buyers are age wise) you have to buy an expensive rider that is often more than is desired.
2. The number of companies that participate in California'a Partnership policy is very limited. Less competition may lead to higher premiums. Non-partnership plans have more companies offering coverage and hence you may find a better deal for the core coverage.

Only an experienced advisor can help you accurately determine your own personal situation and need for LTC planning and Partnership benefits. By requesting a quote from LTC Tree, we can provide you with a CA licensed and certified advisor who can walk you through the details. The form at the bottom of this page is all you need to get started.

Further Reading / Viewing

1. Request the free California state Guide on Aging and a comparison quote of options.
2. www.RUReadyCA.org - an independent consumer education program from the state.
3. CA Dept. of Health Care Services - CA.gov's guide to educating Californians.