The "Partnership Program" is so named as a result of the National Association of Insurance Commissioner's Model Long Term Insurance Bill (or Act). The name was chosen because under this type of Long Term Care Insurance policy, there is an interchange, "partnership" if you will, between the insurance company, the insured, and Medicaid if such should be needed—which is in itself a partnership between the states and the Federal government.
This program has taken on "new legs" because of the Deficit Reduction Act of 2006, recently signed by President Bush, changing federal Medicaid rules which recognizes the policy and it allows states to market this plan. Prior to the DRA, states would ask the federal government (Medicare) for permission before they could enact any state law involving Medicaid. With the DRA, this eliminates the state's having to individually petition Medicaid for approval for any such variance. This is a most unusual insurance policy for several reasons, including the number of the "players."
Some states that have announced plans to proceed with the program have also enacted certain laws in respect to this program which may vary slightly from the NAIC Model—the Model Bill allows for variances if the result is more favorable to the policyholder.
States may continue to sell Long Term Care Insurance plans that do not contain these "partnership" features, although most, if not all, states are requiring that all such policies be tax-qualified (as discussed later in this text).
Some of the Model Bill requirements are not in use in non-partnership policies, and where the NAIC requirements are more strenuous or considerably different that those typically used, this difference will be pointed out.
When the text uses the verb “shall” or “may,” this would indicate text used in the NAIC Model Bill. While some of the Model Bill demands certain provisions, they may allow some leeway for the states, as long as the choice is as liberal to the consumer as the Model Bill wording.
Note: Throughout this text rather than use the clumsy gender designation as he/she, his/her, himself/herself, etc., the masculine gender is used for simplicity. There is no intent to diminish the contributions of those of the female gender to the insurance industry or implication that they contribute less than do those of the male gender.
Note23: Long Term Care Insurance is abbreviated in this text to LTCI. When the abbreviation LTC is used, that refers to long-term care.