In a move that could reshape the long-term care insurance (LTCI) landscape in Minnesota, lawmakers are advancing a bill to broaden the scope of policies eligible under the state’s LTC partnership program.
Senate File 3484, introduced May 5, proposes to expand the definition of a “partnership policy” to include long-term care insurance policies issued before July 1, 2015, that offer inflation protection between one and three percent. These policies were previously excluded from the state’s partnership designation.
Currently, the Minnesota Partnership for Long-Term Care Program allows policyholders to protect assets from Medicaid spend-down requirements if they hold qualifying LTCI policies. The new language would extend that benefit to a wider pool of policyholders, particularly those with older plans that may not meet today’s inflation protection benchmarks but still provide meaningful coverage.
Under the proposed amendment to Minnesota Statutes 2024, section 256B.0571, subdivision 6, partnership status would be extended to eligible policies that meet criteria in sections 62S.23, subdivision 1, paragraph (b), and 62S.312, even if issued before July 2015. It would also apply to policies exchanged after July 1, 2006, under section 62S.24, subdivision 8.
“Partnership policy includes a long-term care insurance policy sold prior to July 1, 2015, with inflation protection between one and three percent,” the bill reads.
If passed, the measure is set to take effect on January 1, 2027, or upon receiving federal approval - whichever occurs later.
For insurers, this regulatory update may necessitate a review of legacy policy portfolios to identify eligible contracts and prepare for new administrative and compliance processes. It also presents an opportunity to engage with existing policyholders who may benefit from partnership designation and the corresponding Medicaid protections.
