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Dear Tom and Alan:

I got a quote for my wife and myself for a longterm care policy.

As you know, there’s a lot of guesswork involved because you may never need any longterm care! Anyway, here’s what we “guessed” we needed: 90 day elimination period; 100 percent home care; daily amount of $150; and, an inflation protection of 4 percent compounded.

The figure we were quoted for all this seemed high, of course, but we’ve been strongly encouraged (by our kids, among others) to get something. No sooner do we get this done, but we’re told about the California Partnership Plan. As if this stuff wasn’t complicated enough?

By the way, I’m 66, my wife is 59.

Hey, I’m trying to do the right thing here!

Tom: I would say that you are! Your different “guesses” are important because it gives you an idea of how much you’ll pay if you both are currently healthy enough to qualify for a longterm care policy.

Al: Longterm care agents are required to take a class every two years. It can be online, in person, or with a book. The California Partnership Plan class must also be taken every two years, but it can only be completed in person. The state is dead serious about this program because it can impact another state program: Medi-Cal.

Since about two-thirds of the people in nursing homes are on Medi-Cal, the Partnership people are very concerned with the enormous expenses of the program.

Tom: I’m glad somebody is.

Al: California was one of the original four states to offer the Partnership Plan to its residents. The basic difference of the partnership program is “asset protection.”

So, in the above scenario outlined by our reader, whatever pool of money accumulates for the two of them will be used for their care, if needed. Should they exhaust the amount accumulated, they would have to use their own assets to continue care. If they “spend down” so that they’re almost broke, they could qualify for Medi-Cal to continue their care.

Tom: So if they had a Partnership Plan, whatever pool of money they accumulated through paying their premiums year after year could help them keep more of their assets.

Al: Yes, but only if they actually spent it on their own care. For example, if our reader accumulates $200,000 in benefits and uses it all for his own care in later years, the Medi-Cal “spend down” requirement could be met and he would be able to keep $200,000 in assets above the state limits.

Unique to Partnership is the fact that its inflation protection percentage has to be 5 percent compounded since they are both under 70.

Finally, three companies now offer California Partnership: Genworth, New York Life and CalPers. TransAmerica has been approved, but hasn’t officially put forth their plan.

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