Qualified Long-Term Care Partnerships Under the Deficit Reduction Act of 2005

The Deficit Reduction Act (DRA) will allow funds paid toward long-term care (LTC) under certain conditions to be disregarded when determining estate recovery obligations, in an amount equal to the LTC insurance benefits paid to, or on behalf of, an individual who has received medical assistance. A policy that meets all of the requirements specified in a Qualified State LTC Partnership agreement is referred to as a Partnership policy.  The insurance benefits upon which a disregard may be based include benefits paid as direct reimbursement of LTC expenses, as well as benefits paid on a per diem, or other periodic basis, for periods during which the individual received LTC services. The DRA does not require that benefits available under a Partnership policy be fully exhausted before the disregard of resources can be applied.