by Adam Smit

Wisconsin Partnership Program According to the U.S. Department of Health & Human Services1, an individual turning 65 has a 69% chance in needing long-term care assistance during their lifetime. Long-term care includes services and support necessary to meet health or personal care needs over an extended period of time. This may include assistance with dressing, eating, transferring, personal hygiene, or bathing and toileting.

This cost of care doesn’t come cheap. In Genworth Financials annual cost of care study2 for the Eau Claire Wisconsin region, the average cost of care in an assisted living facility is $4,000 per month and in a private room nursing home facility, average costs are over $8,300 per month. Medicare typically does not cover long-term care expenses therefore ones cost of care will need to be covered by personal savings, insurance, or through Medicaid. In general, for Medicaid to cover long-term care costs, that covered individual must have exhausted all other sources of assets and income.

First effective in Wisconsin in 2009, the Long-Term Care Partnership Program was introduced to incentivize people to proactively plan for the risk and associated costs of long-term care. This relatively unknown program allows for individuals to qualify for Medicaid sooner by incentivizing the purchase of private long-term care insurance. The Wisconsin Partnership program states that long-term care insurance policies that qualify for partnership program allow for an insured to protect some or all of their assets and still qualify for Medicaid if the long-term care needs extended beyond the benefits covered by the long-term care insurance policy.

Here is an example of how the partnership long-term care program would work. John Doe has a partnership eligible long-term care insurance policy that has a cumulative benefit of $150,000. John’s health declines and ultimately needs custodial care of which the long-term care insurance policy pays for that cost of care for the first $150,000. Over time, John exhausts the insurance benefit and qualifies for Medicaid to cover the cost of his care while still being able to retain $150,000 of assets. For every dollar of long-term insurance coverage used, John will be able to retain a dollar of assets while still qualifying for Medicaid.

Consumers should be aware that not all long-term care insurance policies are “partnership” policies. Certain policies that do not include inflation protection riders or life insurance or annuity policies with long-term care benefit riders are not partnership eligible.

Wisconsin Department of Health Services has organized local, county based, Aging and Disability Resource Centers which can be a helpful resource for more information on long-term care issues and related resources. Additionally, www.longtermcare.gov offers additional information in planning and preparing for what could be the largest financial risk many Americans will ultimately face.

Adam Smit is a CERTIFIED FINANCIAL PLANNERTM. His practice emphasizes an investment philosophy of investing in quality while holding for the long-term. Securities offered through LPL Financial. Member FINRA/SIPC.

1 – https://acl.gov/ltc/basic-needs/how-much-care-will-youneed 2 – https://www.genworth.com/aging-and-you/finances/cost-

of-care.html