Long Term Care Agencies May Thrive from Partnership LTC Programs
Long term care agencies can get the edge they need when selling policies to clients by equipping themselves with the right knowledge of partnership programs. As a way to help individuals to have access to the appropriate care and assistance during the retirement years, these state-sponsored programs are beneficial for both an agent and a customer.
Long term care insurance (LTCI) is undeniably an investment worth considering for one’s future. It pays for an array of long term care (LTC) services, while insured individuals have to maintain only a small premium for their coverage. Insurance companies marketing LTCI offer different types of policies to meet the health care requirements of every person; besides this, an individual’s budget is another thing that they take into consideration. Among the LTCI policies available, those that comply with the Partnership LTCI Program are slowly gaining a large following. The Partnership Program, defined as a collaboration between the government and private insurance companies, aims to encourage uninsured individuals to invest in affordable coverage, and to receive asset protection should they need Medicaid someday.
How Does a Partnership Policy Work?
The Partnership Program used to be operational in only four states: California, Indiana, Connecticut, and New York. Section 6021 of the Deficit Reduction Act of 2005 changed this when it expanded the program throughout other US states. With a Partnership LTCI policy, an insured individual may apply for Medicaid after exhausting his or her benefits, without satisfying the program’s asset requirement. Medicaid typically requires everyone who needs LTC coverage to meet its asset requirement first; most state Medicaid programs require applicants to have not more than $2,000 in assets if they are single, and $3,000 if they are married. Purchasing a Partnership qualified LTCI policy will allow an eligible policyholder to apply for Medicaid, and exempt a portion of his assets that is equal to the total amount of benefits he received from his policy.
Which Policies Would Pass for Partnership Status?
Originally conceptualized for middle-class Americans, Partnership LTCI policies are gradually becoming the choice of individuals with larger incomes. The idea of not having to maintain a large annual premium is what attracts people from all walks of life to this insurance product. A partnership plan grants the flexibility of not only adjusting to a policyholder’s time or funds, but it also gives the sense of control that most policy owners seek during their retirement years.
Unlike other LTCI policies that provide coverage for only a fixed period, partnership qualified policies allow eligible policyholders to extend their coverage by applying to the Medicaid program without depleting their assets. In other words, a person who has received a maximum benefit amount of $250,000 from his Partnership LTCI policy can protect his assets also worth $250,000 should he apply for Medicaid to receive continuous care. Not all LTCI policies bear a Partnership status, though. Only tax-qualified policies that meet the consumer protection provisions of the NAIC LTC Insurance Model Act will qualify for the Medicaid asset protection. Aside from meeting federal tax laws, a Partnership LTCI policy should provide some amount of inflation protection based on the age of an insured individual at the time he purchased his plan. This will keep the insured’s benefits at pace with inflation; therefore, an individual can postpone his or her need for Medicaid, or he or she might never need it at all.
What Does This Mean for Long Term Care Agencies?
Knowledge is power in providing the best products and services – agents with a background on how partnership programs work can pitch policies and still give a great level of assurance for clients who are facing financial difficulties. As part of a potent tandem, state-sponsored LTC partnership programs allow individuals to view their future in a brighter light. Successful long term agencies do not only sell the most policies – excellent customer service and satisfaction is needed to make a firm and its agents survive in the industry. Partnership policies grant these LTC companies another much-needed benefit for their clients to purchase a plan.
Additionally, more LTC agencies and LTCI specialists are focusing on a client’s emotional triggers. Going with the mentioned angle, a sale is more likely to happen if an agent genuinely puts the time and effort to understand a customer’s circumstances. A state-sponsored LTC plan directly addresses the frustration and pain that most potential policyholders experience: of not having the required funds for custodial care. Agents can maximize their sales efforts and customer relations by informing customers about the possible usage of partnership programs.
How about you – what and how do you think Long Term Care Agencies can gain from Partnership Policies?
We’d love to hear more from you about your thoughts, comments, or questions regarding our blog. Can you name of instances when partnership policies will work best for LTCI agents? What about existing LTC agencies pushing campaigns for more people to use a partnership plan? Please share it with us by leaving a comment below!