Monday, January 5, 2009

Long-Term Care Insurance Partnership Protection - What Most People Overlook

To prepare the 2009 Long-Term Care Insurance Sourcebook, which will be sent to all Association members in March, I take the time to review countless studies and reports.

One of the more interesting was published recently by the California Partnership for Long-Term Care. One of the requirements imposed on the initial four Partnership states (California, New York, Indiana and Connecticut) was the preparation of very detailed reports on buyers as well as utilization of policies. Thus, these provide some of the best snapshots of real situations ... what consumers choose and how they use benefits when needed.

I was involved with the launch of the California Partnership and I think many people either overlook or are not familiar with why the Partnership concept came about ... and why it is such a powerful solution for consumers. Bottom line: it is designed to help expand the market to "middle income" consumers who could afford shorter-duration policies with the added protection of being able to qualify for Medicaid while protecting a larger sum of assets from the spend-down requirement.

So, some of the interesting findings from the California report. Some 142,650 applications were initially submitted of which 118,390 resulted in issued policies (some 98,528 are currently active). To date, 2,082 policyholders have qualified to receive benefit payments ... and the total asset protection earned by policyholders who received benefits was $75,367,500 (which means the average payout was $36,199).

Some 187 policyholders exhuasted their benefits (722 died while in benefit) and of these 44 accessed Medicaid (Medi-Cal in California).

There is excellent data that looks at the duration of policy benefits by the people who exhausted their policy and then accessed Medi-Cal. We'll publish that and discuss it more.

But the bottomline message for those marketing Partnership protection, this is excellent coverage for those seeking more affordable plans of protection.

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