CARD T277
Long-Term Care Partnership Program
A state program linking qualifying LTC insurance with specified Medicaid asset protections. Participation and protections follow state and federal rules.
How it works
A Long-Term Care Partnership program lets qualifying insurance benefits protect some assets that would otherwise count against Medicaid eligibility or be subject to certain recovery claims after death. In a common dollar-for-dollar design, $100,000 of qualifying insurance benefits paid can allow $100,000 of assets to be disregarded under the state’s rules. “Disregarded” means not counted for that purpose; it is not a cash payment from Medicaid. Income, care needs, residency, and other eligibility rules still apply. Not every LTC policy qualifies, and protection after moving to another state must be checked. [21] [22] [27] [28]
A qualifying policy pays $100,000 of benefits. A dollar-for-dollar partnership program may disregard that amount of assets, but the applicant must still meet other Medicaid requirements.
Asset protection is not automatic Medicaid eligibility.
CARD T278
Inflation Protection
A feature increasing benefits to help address rising costs. LTC coverage may offer annual benefit increases under a chosen option.
How it works
Inflation protection increases benefit amounts to help keep pace with rising care costs. A simple increase applies a percentage to the original benefit; compound increases apply it to the growing benefit. Purchase options may allow future increases with conditions and additional premiums. A commonly tested offer is 5% compound protection, but it is not a universal feature automatically included in every LTC policy. State and partnership requirements differ. [21] [22]
Starting from $100, two annual 5% simple increases produce $110; two 5% compound increases produce $110.25.
An increasing benefit does not mean the premium can never rise.
CARD T279
Nonforfeiture Benefit (LTC)
A feature allowing some limited long-term care benefits to remain after a policy ends because premiums stop, instead of losing all coverage. The remaining amount or duration is smaller than the original coverage.
How it works
An LTC nonforfeiture option preserves defined limited benefits after qualifying lapse rather than leaving no benefits. A shortened benefit period is a common design: benefits continue within a reduced paid-up amount or duration under the contract. A contingent benefit upon lapse can arise after qualifying rate increases under applicable rules and is distinct from a purchased nonforfeiture rider. Neither necessarily refunds every premium or preserves the original full benefit pool. [21] [22]
An insured stops paying after meeting the rider’s conditions and retains a limited paid-up benefit instead of the full original coverage.
LTC nonforfeiture should not be assumed to offer the same menu as whole-life nonforfeiture.
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Practice questions
Select an answer, then check it to see why each option is right or wrong.
T277 · Long-Term Care Partnership Program
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T278 · Inflation Protection
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T279 · Nonforfeiture Benefit (LTC)
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Sources & further reading
Original explanations and practice scenarios informed by the following regulatory, legal, and product resources. State examples are not presented as nationwide deadlines or requirements.