Frequently asked questions
Questions about the Partnership and Partnership Policies
Q: What is the advantage of a Partnership Policy over a non-Partnership Policy?
Partnership and non-Partnership policies are virtually the same except that Partnership Policies have the added benefit of the Dollar-For-Dollar Asset Protection. This benefit allows policyholders to protect a portion of their assets if they choose to apply for Medicaid. Agents who wish to sell Partnership Policies are required to attend ongoing certification training on the Partnership; it is not required of those who sell only non-Partnership policies.
Q: How will the Dollar-For-Dollar Asset Protection amount be determined?
Asset protection is based on what the insurance company has paid out in benefits. It is NOT based on the insurance premiums paid or the value of the policy.
Q: How will owners of Partnership Policies and their family members know that a policy qualifies as a Partnership Policy?
When the policy is issued, it will include a Partnership Disclosure Notice stating that it is a qualified Virginia LTC Insurance Partnership Policy. If there is any doubt, call your insurance agent or insurance carrier.
Q: Will my Virginia Partnership Policy qualify me for Dollar-For-Dollar Asset Protection in other states?
Yes. Virginia plans to participates in a national reciprocity agreement. It is currently under development. However, it is likely that not all states will participate in this program. Check with your insurance carrier or an insurance agent in the state in which you will be transferring.
Q: Which insurance carriers offer Partnership Policies?
Virginia Partnership Policies are only sold by certain insurance companies. These companies are listed on the Virginia Bureau of Insurance website. The Commonwealth of Virginia does not endorse any specific insurance product or insurer.
Q: Will my current LTC policy convert to a Partnership Policy?
No. Contact an insurance agent to purchase a Partnership Policy. See Purchasing LTC Insurance for more information.
Q: If I have an illness, can I still qualify for a Partnership Policy?
Insurance companies who sell LTC insurance use medical underwriting to determine if you qualify for a policy. Medical underwriting is when an insurance company reviews a number of factors including your health and health history and determines if they will provide LTC coverage. Insurance companies are not required to sell you a LTC insurance policy if you do not meet their underwriting standards.
Q: Who can purchase a Partnership Policy?
Any Virginia resident can apply for a Partnership Policy. The ideal applicant is generally healthy, meets the insurance company's issue age limit, and is able to afford the cost of the insurance.
Questions about LTC insurance
Q: Who is at risk for needing long-term care?
Everyone is potentially at risk. A national study found that almost 70% of people turning 65 will need some long-term care. Women are at a higher risk than men with 79% of women turning 65 needing some long-term care, and 58% of men turning 65 needing some long-term care. Among those turning 65, over half will need long-term care for at least one year, and 20% will need more than five years of care. Thirty-one percent of Americans will not need long-term care in their lifetime.
Source: "Americans Fail to Act on Long Term Care Protection," American Society on Aging, May 2003.
Q: What are some considerations to think about before purchasing a long-term care insurance policy?
While there are a number of different things to consider and evaluate on which policy is the best to buy, here are some questions to keep in mind:
- What is the maximum benefit of the policy (2 years, 5 years, a lifetime)?
- How long is the elimination period? The elimination period is the number of days paid out-of-pocket before the policy begins to pay.
- Is the policy tax qualified? All Partnership policies are tax qualified.
- Does the policy provide for home health care or adult day services?
Q: How will I know how much long-term care insurance to buy?
In order to determine how much LTC insurance you will need, the general rule of thumb is Cost of Care - Income = Benefit Amount. The monthly cost of care will vary depending on where you live and the type of care you receive. Currently, home health care in Virginia averages $25.00 per hour and a semi-private room in a nursing facility averages $161.00 a month. Be mindful that this is a simple starting point for determining the appropriate amount of coverage.
- EXAMPLE:
If monthly cost of care is estimated at $4,500 and the amount of monthly income that you will be able to contribute toward the cost of your care is equal to $1,500, you would want to purchase a policy with a $100 per day benefit. - $4,500 - $1,500 = $3,000/month
- $3,000/month divided by 30 = $100 daily benefit
Q: Will my health insurance cover me for long-term care?
Probably not. Long-term care is not typically covered by traditional health insurance, disability insurance plans, Medicare, and Medicare supplemental insurance (Medigap).
Q: Where is the care provided?
Long-term care can be provided in a variety of places including: a person's home; a nursing facility; through community-based services (i.e., Adult Day Care), and in a variety of assisted-living settings (i.e., Continuing Care Retirement Communities, Residential Care Homes, and Assisted Living Facilities).
Q: What are the connections between LTC insurance and the tax laws?
There are some tax-deductible long-term care expenses. The premiums charged for tax-qualified LTC insurance policies are treated as medical expenses under Federal tax law. Check with a tax advisor about the tax implications for your long-term care expenses. Check with your insurance agent to see if your policy is a tax-qualified policy.
Q: Who can I speak with to discuss my LTC insurance needs?
There are several resources for you:
- Contact an insurance agent or advisor. Ask if the company he or she represents offers a Virginia LTC Partnership Policy if you are interested in its benefits.
- Contact the Virginia Insurance Counseling and Assistance Program (VICAP) by calling the Virginia Department for the Aging at 1-800-552-3402 or learn more at the Virginia Department for the Aging online.
Q: Who should I contact if I have a concern or a complaint about an insurance agent, broker, or carrier?
Contact the State Corporation Commission's Bureau of Insurance.
Questions about Medicare
Q: Does Medicare cover the cost of long-term care?
Many assume Medicare will pay for their long-term care expenses. The reality is, Medicare covers only a small portion of long-term care costs. Medicare will pay for care in a nursing home only when certain conditions are met, and even then, you are only fully covered for 20 days. In certain situations, some people qualify for partial payment up to 100 days.
Questions about Virginia Medicaid
Q: When should Partnership Policyholders apply for Medicaid?
Apply for Medicaid when the policyholder is having a difficult time paying for care or when the Partnership Policyholder exhausts the benefits of his or her Partnership Policy. However, policy exhaustion is NOT required to apply for Medicaid in Virginia. Remember, everyone has the right to apply for Medicaid at anytime.
Q: If I exhaust my Partnership Policy, will I automatically qualify for Medicaid?
No. You must still apply for Medicaid and meet the eligibility requirements. Read the state's information on Eligibility Screening for more information on Medicaid.
Q: If I think I am eligible for Medicaid, should I cancel other health insurance I might already have?
No. Medicaid does not require or recommend that you cancel your other health insurance.