In Pennsylvania, there are various means to address long term care needs through either home and community-based services or institutional care. Meanwhile, the number of people needing LTC has increased over the years, and this indicates the greater demand for such care in the future. The Bureau of Census reveals astounding figures of the Pennsylvania's senior population aged 65 and older that rose up to 63,000 or 3.3 percent from 2005 to 2010, the increment is almost thrice the rate of the overall population growth of 1.2%. From 2010 to 2020, the state's population of 65 and up is projected to grow. The Bureau of Census gauges the growth of senior population to about 510,000 or 27% as baby boomers will make up the the increase in this age group.
Medicaid is a health financing program that pays for LTC of eligible low-income Pennsylvanian residents. However, Medicaid program has its share of complexities that most taxpayers rage about as it is not as effectual as they have thought. More than 200,000 senior Pennsylvanians are enrolled in Medicaid with the hopes of getting financial backup for long-term care. Medicaid. Unfortunately, Medicaid does not pay the overall long-term care costs, and accommodates most ow-income individuals. An individual should have not more than $2,400 worth of assets to become eligible for Medicaid. Uninsured individuals are prompted to pay expenses out-of-pocket, or, if all else fail, wait for their resources and assets to reach the asset limit of Medicaid. As long term care costs rise each year and Medicaid program seems repressive, Pennsylvanian seniors are on the verge of bankruptcy and debt as those factors hamper them from getting humane and decent home care services. It's been critical for many individuals to plan for their future since this planning entails massive wealth. People are torn between purchasing long term care insurances or spending down their assets to qualify for long term care; however, the state has implemented programs that will solve these problems.
Pennsylvania Long Term Care Partnership
On July 17, 2007, Act 40 was established creating the Pennsylvania Long Term Care Partnership. It is an alliance between private insurance companies and the State of Pennsylvania, through the Pennsylvania Insurance Department. This program was also meant to comply with the Deficit Reduction Act of 2005, a nationwide effort to reduce Medicaid expenditure on LTC. Studies show that total Medicaid spending for the fiscal year 2007 was $16 billion, where 40.2% of the total spending went to long term care for nursing homes. Moreover, the partnership program is established to promote the sales of private LTC policies to help residents of Pennsylvania finance their own long term care needs.
Partnership Policy Features
All participating insurance companies are required to follow the federal requirements when issuing partnership policies. Partnership policies must incorporate the following features:
Asset Disregard - This is also known as the dollar-for-dollar asset protection. This helps policyholders to protect their assets regardless of what Medicaid has imposed on maximum asset limit. Through this, people are not compelled to become impoverished only to avail Medicaid coverage because this feature allows them to keep their assets equivalent to their total benefits.
Inflation Protection - Policyholders of partnership policies need not worry about the increasing costs o fLTC since they have inflation protection. The percentage of this protection depends on the age of the person. So the younger you are, the lower are the premium rates will be.
Tax-Qualified- Insurance benefits are non-taxable. This policy allows you to get a portion of the premium paid as tax deduction, but your medical and dental expenses should not exceed 7.5 percent of your gross income.