Partnership Long-Term Care Policies
Ohio Supplemental Information
Partnership LTC Requirements
The long-term care Partnership policies are generally similar from state to state, although each state may have details that are specific.
The Deficit Reduction Act of 2005 provided access to Partnership policies for all our citizens rather than just those residing in California, Connecticut, Indiana, or New York. As a result of the DRA, states began passing legislation to allow asset preservation, even if the individual eventually ends up requesting Medicaid benefits.
In Ohio the department of job and family services acts as the single state agency to supervise the administration of their Medicaid program. While it would normally not be possible to use any procedure that is inconsistent with the established Medicaid policies, Partnership asset protection is an exception to that rule. Partnership asset protection involves those receiving federal aid under Title XVI of the Social Security Act or those who are eligible for but are not receiving such aid.
It is always important to understand that Partnership long-term care policies protect assets, never income. Ohio uses the term estate and defines it as:
Ohio defines a Qualified state long-term care insurance Partnership program as the program established under section 5111.18 of the Revised Code.
5111.18 Qualified long-term care insurance Partnership program.
Not later than September 1, 2007, the director of job and family services shall establish a qualified state long-term care insurance Partnership program consistent with the definition of that term in 42 U.S.C. 1396p(b)(1)(C)(iii). An individual participating in the program who is subject to the Medicaid estate recovery program instituted under section 5111.11 of the Revised Code shall be eligible for the reduced adjustment or recovery under division (D) of that section.
The director of job and family services may adopt rules in accordance with Chapter 119 of the Revised Code as necessary to implement this section.
(D): In the case of a participant of the qualified state long-term care insurance Partnership program adjustment or recovery required by this section may be reduced in accordance with rules adopted under division (G) of this section.
3901-4-02 Long-term care Partnership program.
The purpose of the Partnership long-term care program is to encourage citizens to take financial responsibility for their long-term care needs with the goal of reducing state Medicaid budgets. To achieve this, 3901-4-02 implements a state long-term care Partnership program in Ohio in accordance with their Revised Code. It applies only to long-term care insurance that qualifies under the states long-term care Partnership program. This includes both individual policies and group certificates that meet the Partnership requirements.
Offers of Exchange
Insurers must offer their policyholders who were issued a policy on or after August 12, 2002 the opportunity to exchange it for a Partnership plan within 180 days of the date they begin to advertise, market, offer, sell or issue policies that qualify under the states long-term care Partnership program. This is a one-time offer that must be made in writing. An exchange occurs when the offer is made by the insurer and the policyholder accepts the offer. The new Partnership policy would replace the previous contract, which then terminates.
The insurer must comply with specific Ohio requirements:
The offer of exchange may be deferred for any insured who is currently eligible for benefits under the existing policy or who is subject to an elimination period on a claim. The deferral must continue only as long as the eligibility or elimination period exists.
An offer of exchange does not have to be made if the insured would be required to purchase additional benefits in order to qualify for the Partnership program and the insured is not eligible to purchase the additional benefits under the insurers new business, long-term care underwriting guidelines. The most obvious reason additional benefits would need to be purchased would relate to inflation protection benefits. Partnership plans are required to contain inflation protection in most cases. Non-Partnership plans may not contain this provision so the insured would be required to pay additional premium to add inflation protection to the Partnership policy. There may be other reasons that this would apply, such as advanced age.
If the new policy has an actuarial value of benefits equal to or lesser than the actuarial value of benefits of the existing policy, the new policy will not be underwritten and the rate charged for the new policy will be determined using the original issue age and risk class of the insured that was used to determine the rate of the existing policy.
If the new policy has an actuarial value of benefits exceeding the actuarial value of the benefits of the existing policy then the insurer will apply its new business, long-term care underwriting guidelines to the increased benefits only and the rate charged for the new policy will be determined using the method set forth for existing benefits, increased by the rate for the increased benefits using the current attained age and risk class of the insured for the increased benefits only. It would be unfair to the insured to base the premium for existing benefits at a higher rate due to the required additional Partnership policy benefits.
The new Partnership plan that is offered on an exchange basis must be on a form that is currently offered for sale by the insurer in the general market and the effective date of the Partnership plan policy must be the same as the new policy.
If the exchange is accepted, the insured will not lose any rights, benefits, or built-up value that has accrued under the original policy with respect to the benefits provided under the original policy. This would include, but may not be limited to, rights established because of the lapse of time related to pre-existing condition exclusions, elimination periods, or incontestability clauses.
Insurers may complete the exchange by either issuing a new policy or by amending the existing contract with an endorsement or rider. In all cases, suitability must still be considered when offering the exchange. If there is a reason that the exchange may not be suitable, the requirements of rule 3901-4-01 of the Administrative Code would still apply.
What happens to those with policies issued prior to August 12, 2002? Insurers may still offer these policyholders an exchange if they wish, but it is not mandatory. If an exchange is offered all of the previous requirements would apply.
Partnership Filing Requirements
All Partnership contracts for long-term care benefits must be filed with the superintendent in accordance with section 3923.02 of the Revised Code prior to use. These filings must include the Partnership program certification form attached as appendix B to this rule, signed by an officer of the company. In all cases the company must identify the policy by the original form number and filing date.
If an insurer intends to amend a previously filed policy with an endorsement or rider in order to bring the policy into compliance with the Partnership program, the insurer must file the endorsement or rider with the superintendent prior to use. The filing must include a Partnership program certification form signed by an officer of the company for each policy that will be amended.
Partnership Disclosure Forms
Agents and insurers must present consumers with a Partnership disclosure notice, either using appendix C to this rule or a notice that is substantially the same in content, along with the outline of coverage as required by division (I) of section 3923.44 of the Revised Code at the time of solicitation. In the case of group coverage where an outline of coverage is not delivered, the agent or insurer must deliver copies of a Partnership disclosure notice along with the enrollment forms.
In the case of life insurance policies that offer long-term care benefits as a term of the policy or in a rider the agent or insurer must give the consumer a Partnership disclosure notice along with the policy summary at the time of solicitation.
Data Reporting
Insurance companies offering Partnership program policies in Ohio must make regular reports to the United States Secretary of Health and Human Services that include such information as required by law or as the secretary determines is appropriate for the administration of the Partnership program.
Thank you,
United Insurance Educators, Inc.