Partnership Policy After Moving to Another State
Elena, age 67, purchased a partnership-qualified long-term care policy in State A in 2018. The policy provides a $180,000 maximum lifetime benefit, a $150 daily benefit, a 90-day elimination period, and 3% compound annual inflation. In 2024 she moved to State B to live near her daughter. She has now entered a nursing home, and the policy has paid $60,000. State B's partnership program recognizes out-of-state partnership policies only when the insurer is authorized in State B and the policy meets State B's inflation requirements. Elena's insurer is not authorized in State B. She has $150,000 in countable assets and is about to apply for Medicaid. Elena asks whether the $60,000 already paid will protect $60,000 of her assets in State B.
1. Does Elena's policy automatically retain partnership status in State B? Explain the factors that determine recognition.
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No. Partnership status is created under the law of the state where the policy was issued, but the Medicaid asset disregard is administered by the state where the applicant seeks Medicaid. State B will look at its own partnership rules, any reciprocity agreement with State A, whether the insurer is authorized in State B, and whether the policy satisfies State B's benefit and inflation standards. Because Elena's insurer is not authorized in State B, recognition is doubtful unless State B has a specific reciprocity rule that overrides that requirement. The policy itself remains a valid long-term care insurance contract and will continue paying covered benefits, but that is separate from Medicaid asset protection. Elena should obtain a written determination from State B's partnership office or Medicaid agency before assuming any disregard.
2. What asset-protection result should Elena expect, and what practical steps should she take before submitting the Medicaid application?
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If State B does not recognize the policy, Elena should expect no partnership asset disregard in State B. Her $150,000 of countable assets would then be evaluated under ordinary Medicaid rules, which for a single nursing-home applicant generally require spend-down to a very low resource limit. If State B does recognize the policy, the disregard would be dollar-for-dollar for benefits paid, so $60,000 could be protected, subject to State B's method of applying the disregard. Before applying, she should request a written partnership eligibility determination, confirm whether State A and State B have a reciprocity compact, preserve the policy and payment records, and consult an elder-law attorney. She should also ask whether applying in State A is realistically available, because Medicaid residency rules may limit that option.