During the week of May 19, 2008, Colorado Governor Bill Ritter will help roll-out Long Term Care Insurance Partnership Plans.

Effective January 1, 2008, Colorado has adopted Long Term Care Insurance Partnership Plans. The new legislation is an alliance between the private insurance industry and the state to help Colorado residents plan for long term care without depleting all of their assets.

There are three basic options for paying for long term care: (1) private pay; (2) Long Term Care (LTC) Insurance; or (3) Medicaid. With life expectancy and length of stay in nursing or assisted living facilities increasing, it is not difficult for the average person to spend his or her entire life savings on long term care.

While Medicaid does provide long term care benefits, there are stringent financial standards for qualification. For example, the asset and income limitations for a single Medicaid recipient allow only $2000 in countable assets and ownership of specified exempt assets, such as a primary residence. Medicaid also has the ability to recover against the estate of a Medicaid recipient after death, which often leaves a family with little or no assets. (For more information about Medicaid requirements, you can look at our website at www.coloradomedicaid.com.)

While Long Term Care (LTC) insurance has been available for years, the new Partnership Plans give an added incentive to purchase coverage. With the purchase of a new LTC Partnership Plan, the policy holder can protect a portion of their assets if it later becomes necessary to qualify for Medicaid.

The new LTC Partnership Plan provides that for every dollar a LTC policy pays out in benefits, a dollar of personal assets can be kept if application for Medicaid becomes necessary. The assets kept by a Medicaid applicant through this process are not considered in the application process nor are they available for estate recovery.

The Partnership Plan has been extremely successful in other states. It opens up additional doors for Medicaid qualification and asset protection. This is an exciting new opportunity to ensure that Colorado residents are able to receive the long term care they need while protecting their hard-earned assets for their families.

Elizabeth D. Mitchell is an attorney at Ambler & Keenan, LLC in Denver, Colorado. Her practice emphasizes estate planning, elder law, and Medicaid planning. She can be contacted at bmitchell@ambler-keenan.com or at 303-407-1542.