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Long Term Care Blog

John Hancock Leaves California Long Term Care Partnership

by Jack Lenenberg

John HancockThe John Hancock Life Insurance Company announced it will be leaving the California Partnership for Long Term Care Program effective September 16, 2013. John Hancock long term care insurance policies in California will no longer provide asset disregard benefits.

John Hancock stated it will continue to market its non-Partnership policy, Custom Care III in California.

This is the second major recent development for John Hancock in California.  In June 2010, John Hancock suspended sales of long term care insurance altogether returning to California in February 2012 with the introduction of the Custom Care III LTC policy.

A spokesman for John Hancock stated "we have found that the strategic direction of our LTC products and markets no longer synchronizes with California Partnership regulatory requirements."

California Long Term Care Partnership Program Benefits

The California Long Term Care Partnership is a public-private arrangement between the State of California and insurance companies that offer long term care coverage. Through this program, buyers of California LTC Partnership policies receive Medi-Cal Asset Protection when nursing home care is needed for an extended period of time.

Partnership programs were established by Federal law to allow States to coordinate private long term care insurance benefits with State Medicaid benefit eligibility.  Partnership programs are available in the majority of States, although specific requirements may vary to meet State-specific guidelines.

To meet the guidelines for the CA Partnership program, California requires Partnership policies to include automatic 5% compound inflation protection and a minimum of $170.00 daily benefit.

Additional consumer protection also exists with California Partnership policies.

To market a California Partnership policy, long term care insurance companies must adhere to certain limitations on the frequency and size of in-force premium rate increases on existing policyholders. 

Additionally, rate increase requests on CA Long Term Care Partnership policies must be approved by not only the California Department of Insurance but also the California Department of Health.  Rate increase requests on partnership policies have been frowned upon and rejected by these government entities.

More than likely it is this stringent rate stability requirement that is impacting decisions of insurance companies to not market California Long Term Care Partnership policies.

California Long Term Care Partnership Policy Availability

With the exit of John Hancock from the California Long Term Care Partnership program, New York Life (A++, AM Best) and Genworth Financial (A, AM Best) remain the only two insurance companies for California residents to presently obtain long term care insurance policies that qualify for Medi-Cal asset disregard benefits.

Please be aware that hybrid long term care insurance policies with life insurance benefits such as Lincoln Moneyguard or Genworth Total Living Coverage also do not qualify for State Partnership programs.

Should you wish to learn more about the benefits of Partnership programs in your state or receive side-by-side long term care insurance comparison quotes please feel free to call us at (800) 891-5824.  Or you may complete your request online.

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