More & more frequently, Partnership is becoming a popular topic among advisors. There currently are two basic rules of thought about Partnership. Some advisors are adamant about writing policies with Partnership, while other advisors don’t see value in offering the program to their clients at all.

So which group is right? The answer is both. Determining whether clients require a Partnership Program is an individualized decision. It makes sense for some and does not for others.

So what is Partnership and why is the Federal Government making such a push for it? Partnership was introduced in the 1980s as another option for people who were planning on having Medicaid fund their LTC needs. Under Partnership programs, clients have dollar-for-dollar or total asset protection once they’ve exhausted all of their plan’s benefits. This protection allows them to financially qualify for Medicaid without an estate spend-down.

When utilizing a state’s Partnership Program, a client purchases their LTCi plan and establishes their benefit pool, which is the maximum amount of money the insurance provider will pay out to them in the form of a benefit. This benefit pool represents what they must spend down to in order to qualify for Medicaid. So if they have $500,000 in assets and have a plan with a benefit pool of $400,000, then they only need to spend down $100,000 of their estate to qualify.

At first glance, this can seem like a logical tool to help protect a client’s assets. But there are considerable differences in opinion when comparing different client scenarios.

Advisors who favor Partnership tend to represent clients who have substantial assets to protect, yet they don’t want to pay the higher premiums for lifetime or unlimited benefits. In cases like these, Partnership gives them piece of mind in knowing that if they use up their benefits, they won’t have to sell down their entire estate in order to receive benefits from Medicaid. Clients like the fact that, in many cases, they don’t have to pay extra for this protection and they feel more comfortable with these state-sanctioned plans.

Advisors who do not favor Partnership, meanwhile, have a variety of concerns about the program. One concern is pricing. While the pricing on most Partnership plans does not increase, there are inflation requirements that are based on your client’s age. Someone who is 57-years-old and only wants an inflation rider of 5% simple, for example, must get a more aggressive rider in order to qualify for the Partnership status. This client will end up paying more for the Partnership Program simply because the required inflation rider is more expensive as well as mandatory.

Secondly, clients who want unlimited or lifetime benefits have no need for Partnership. This is mainly because, under those programs, they will never exhaust their benefit pools and would not be subject to requiring longer care than their policies provide.

Finally, clients who plan on receiving home care should know that Medicaid plans will not simply continue to provide them with the same benefits that were afforded them under their private LTCi plans. Medicaid is dictated by the government, and when your client transitions into Medicaid coverage, they will no longer have the right to elect where they receive their care. If your client plans on receiving in-home care, make sure they know that Medicaid will not afford them this freedom of choice and they may want to consider extending their benefit period to decrease the chances of exhausting their benefit pool.

Another important piece to the Partnership puzzle is that a Partnership plan does not automatically qualify a client for Medicaid because they also must meet certain medical and income requirements to receive those benefits. Medicaid requires more than just a total asset minimum requirement and clients need to know that even with a Partnership plan, they may still not qualify for Medicaid based on their income or other medical requirements.

When taking a full view of Partnership, it’s easy to see why having this conversation should be an essential part of your clients’ planning process. Make sure that you and your clients are well-versed in your state’s individualized Partnership Plan. Also be sure that your clients understand how they would qualify for Medicaid, and if the service they receive through Medicaid will suit their lifestyle choices.

Advisors should approach Partnership Plans just as they would any other type of LTCi benefit: on an individual basis. Find out what your clients are looking for in their plan and determine if Partnership truly is a good fit for them. By assessing both the benefits and disadvantages of these plans, your clients will have all the information they need to make a sound decision in what type of plan they should purchase & how that plan will meet their needs in the future.

Lindsey Kirk is Director of LTC Sales for GamePlan Financial Marketing (www.gameplanfinancial), one of the world's leading field marketing organizations (FMOs) for independent life insurance agents and financial advisors. She can be reached at lkirk@gameplanfinancial.com or by calling 800-886-4757.