- 10,329
Interesting Take on Partnership Policies & Ltci Design
- Thread starter scagnt83
- Start date
I am not a fan of "short and fat" policies either.
But, she's giving a false choice. She's suggesting that you either have a short and fat partnership policy
OR
a policy with a longer benefit period that is NOT partnership qualified.
There's a 3rd choice which she leaves out.
Why not have a policy that has a longer benefit period AND is also partnership qualified? That's the best option of them all.
nadm
Arthur Rudnick
Guru
- 1,652
I think Honey nailed it!
I'm not sure the real issue here is "short & fat" vs "long & lean". (Personally I don't believe it matters, it's the pool of money and the daily/monthly benefit that matters)
The point is, on the surface, a Partnership Policy sounds like a great thing. But, at the end of the day, once the benefits of the policy is exhausted, the policyholder is on
M-E-D-I-C-A-I-D! The purpose of LTCi is to have people purchase a policy so they can AVOID being on Medicaid.
For those pro-Partnership folks, why not read your state's Medicaid Rules & Regulations. If you can read through the thousands of pages of legislative gibberish, maybe you'll get a better understanding what being on Medicaid is about.
Partnership policies are a little more consumer friendly in NY because they offer 100% asset protection.
I'm not sure the real issue here is "short & fat" vs "long & lean". (Personally I don't believe it matters, it's the pool of money and the daily/monthly benefit that matters)
The point is, on the surface, a Partnership Policy sounds like a great thing. But, at the end of the day, once the benefits of the policy is exhausted, the policyholder is on
M-E-D-I-C-A-I-D! The purpose of LTCi is to have people purchase a policy so they can AVOID being on Medicaid.
For those pro-Partnership folks, why not read your state's Medicaid Rules & Regulations. If you can read through the thousands of pages of legislative gibberish, maybe you'll get a better understanding what being on Medicaid is about.
Partnership policies are a little more consumer friendly in NY because they offer 100% asset protection.
- 2,584
I always wondered why they made the Partnership policies so un attractive to consumers. Those darn minimum "requirements". I think the numbers of policies sold speaks volumes.
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- 16,881
Indiana too.
- 11,277
Agreed! You nailed it.
Unless you can afford the true amount of coverage you should have, then the purpose of a Partnership LTC policy is to preserve what little assets you do have before being admitted to a Medicaid facility.
It becomes more of an estate preservation tool, rather than a tool to provide care.
- 15,319
I'm a bit confused. Unless a person can buy a lifetime benefit with inflation protection don't the run the risk of exhausting their personal assets eventually?
If a 5 year benefit has a pool of money of $300K, how is that different than a 10 year benefit with the same pool? Except the 5 year plan will cover more of the costs up front.
In CA, I understand that the partnership plans have historically increased their premiums at a much lower rate than non-partnership plans. There are also additional consumer protections. Why is this bad?
Rick
If a 5 year benefit has a pool of money of $300K, how is that different than a 10 year benefit with the same pool? Except the 5 year plan will cover more of the costs up front.
In CA, I understand that the partnership plans have historically increased their premiums at a much lower rate than non-partnership plans. There are also additional consumer protections. Why is this bad?
Rick
- 16,881
Partnership plans and non partnership plans are priced exactly the same if they have the same benefits. The partnership is free.
When agents say the non partnership is cheaper it's only because they can strip away the inflation protection or other requirements of a good policy.
When agents say the non partnership is cheaper it's only because they can strip away the inflation protection or other requirements of a good policy.
- 2,584
Whats a "good" policy?
One with compound 5% inflation protection?
High daily benefit?
I feel those are ideal features. Not sure everybody wants/needs the ideal plan.
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Arthur Rudnick
Guru
- 1,652
"Whats a "good" policy? "
A "good policy" is one with a minimum of a 5-yr. benefit period, that's presently paying about 80% of today's actual cost of care with a 5% compound inflation rider.
A "great policy" is the same, with an unlimited benefit period.
Now you asked about "good", you didn't ask about "affordable"
NY is different on their Partnership policy. First of all, this year's mandated minimum daily benefit is $245/day and a 5% compound Inflation rider is mandatory through the age of 79. At 80+, it's optional.
There are 12 comapnies in NY that sell LTCi and only 2 of them offer a Partnership policy and only 1 considers insuring through the age of 84.
So...... How ridiculous is NY's plan? Combined premiums for a 79 yr. old couple buying minimum benefits with a 5% Cmp. inflation rider is almost $20,000/yr.
And, that's for a 3-year plan. A 4-year plan would run $28,000/yr.
Obviously, with the mandated minimums and corresponding costs, no one in NY is considering a Partnership policy over the age of 55. And, since there is no reciprocity with other states for NY Partnershipship policyholders, those in their 50s don't want a Partnership policy because somewhere down the road, they would have to return to NY. And, for someone in their 50s, they would rather keep their options open.
You think the federal government is dysfunctional? The state of New York invented the word.
A "good policy" is one with a minimum of a 5-yr. benefit period, that's presently paying about 80% of today's actual cost of care with a 5% compound inflation rider.
A "great policy" is the same, with an unlimited benefit period.
Now you asked about "good", you didn't ask about "affordable"
NY is different on their Partnership policy. First of all, this year's mandated minimum daily benefit is $245/day and a 5% compound Inflation rider is mandatory through the age of 79. At 80+, it's optional.
There are 12 comapnies in NY that sell LTCi and only 2 of them offer a Partnership policy and only 1 considers insuring through the age of 84.
So...... How ridiculous is NY's plan? Combined premiums for a 79 yr. old couple buying minimum benefits with a 5% Cmp. inflation rider is almost $20,000/yr.
And, that's for a 3-year plan. A 4-year plan would run $28,000/yr.
Obviously, with the mandated minimums and corresponding costs, no one in NY is considering a Partnership policy over the age of 55. And, since there is no reciprocity with other states for NY Partnershipship policyholders, those in their 50s don't want a Partnership policy because somewhere down the road, they would have to return to NY. And, for someone in their 50s, they would rather keep their options open.
You think the federal government is dysfunctional? The state of New York invented the word.
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