Title: Doubly enhanced medicaid partnership annuities (DEMPANs): Long-term care for seniors in the Medicaid penumbra
Authors: Colin Ramsay - University of Nebraska-Lincoln (United States) [presenting]
Abstract: A 2019 NAIC long-term care insurance guide estimates about 70\% of US residents age 65 are expected to need long-term care, and about 35\% are expected to enter a nursing home at least once in their lifetime. U.S. retirees often can access long-term care services via Medicaid, which is a means-tested program geared to lower-income Americans. But, to quickly qualify for Medicaid, many retirees may transfer their assets to family members and incur Medicaid penalties. To improve access to long-term care, most U.S. States developed Partnership for Long-Term Care Program insurance policies that provide access to Medicaid while sheltering some or all of a retiree's assets. We propose a doubly enhanced Medicaid Partnership annuity (DEMPAN) that combines an annuity with long-term care insurance that is integrated within the framework of a qualified Partnership policy. We use a multi-state model of long-term care with health states based on a retiree's ability to perform activities of daily living (ADLs), instrumental activities of daily living (IADLs), and cognitive ability. We explicitly assume the quality of long-term care affects the transition probabilities used in the multi-state model.