Long-Term Care (LTC) Partnership Programs, formally known as Qualified State Long-Term Care Partnership Programs, represent a cooperative effort between private long-term care insurance providers and state Medicaid programs. These partnerships are designed to encourage individuals to purchase long-term care insurance to help manage the costs associated with extended care needs, thereby reducing the financial strain on state Medicaid systems.
A key benefit of these programs, especially for seniors who may need to rely on long-term care Medicaid in the future, is asset protection. Participating in a Partnership Program allows individuals to safeguard a portion, or in some cases all, of their assets from Medicaid’s asset limitations. Critically, these protected assets are also shielded from Medicaid’s Estate Recovery Program (MERP), which seeks to recoup long-term care expenses from a beneficiary’s estate after their death. Essentially, Long-Term Care Partnership Programs act as an asset protection strategy, enabling healthier seniors to plan for potential future long-term care needs while preserving assets, including their homes, for their families rather than for Medicaid repayment. Through these programs, Medicaid applicants can retain assets that would typically exceed Medicaid limits.
Originating in 1992 in states like California, Connecticut, Indiana, and New York, the expansion of LTC Partnership Programs was initially restricted by the 1993 Omnibus Budget Reconciliation Act (OBRA). However, the 2005 Deficit Reduction Act (DRA) opened the door for all states to establish these programs.
Today, Long-Term Care Partnership Programs are widely available across the United States. The exceptions are Alaska, Hawaii, Massachusetts, Mississippi, Utah, Vermont, and Washington D.C. It’s important to note that while Massachusetts lacks a formal Partnership Program, it offers similar protections through MassHealth Qualified Policies, which provide specific Medicaid benefits to those who purchase qualifying long-term care insurance.
To confirm the availability of a Long-Term Care Partnership Program in a specific state, it’s advisable to contact that state’s Department of Insurance. Many programs operate under state-specific names, for example, the Indiana Long Term Care Insurance Program (ILTCIP), the New York State Partnership for Long-Term Care (NYSPLTC) Program, and the Arizona Long Term Care Partnership Program.
Long-term care, within the context of Partnership Programs, encompasses a broad spectrum of services designed to support individuals who struggle with daily living activities, such as bathing, dressing, and personal hygiene. These services can include in-home personal care, home health aides, adult day care, assisted living, memory care facilities, and skilled nursing home care.
Benefits of Long Term Care Partnership Programs
The primary advantage of participating in a Long-Term Care Partnership Program is the asset protection it offers to Medicaid applicants. This protection extends to both savings and other countable assets against Medicaid’s asset limits, and also safeguards homes and remaining assets from Estate Recovery claims. It is important to understand that while these programs protect assets, they do not protect an applicant’s income.
With the exception of California, most states have an asset limit for long-term care Medicaid eligibility, often set at $2,000. State-specific asset limits are available for review. Certain assets, such as a primary residence, essential household items, personal belongings, and a vehicle, are typically exempt from these limits. Applicants with countable assets exceeding the limit are usually required to “spend down” these excess assets to become eligible for long-term care Medicaid.
Medicaid’s Look-Back Period, which is generally 5 years, involves a review of all asset transfers made in the period leading up to a Medicaid application to ensure no assets were improperly gifted or sold below market value. Violations of the Look-Back Rule can result in Medicaid ineligibility penalties. New York currently waives the Look-Back Period for home and community-based services but plans to implement a 2.5-year period in 2025. California, having eliminated its asset limit on January 1, 2024, does not subject asset transfers made on or after this date to the Look-Back Rule.
Qualified State Long-Term Care Partnership Programs provide a mechanism to protect assets above the standard Medicaid asset limit (typically $2,000) for seniors who might need long-term care Medicaid. The protected amount is directly linked to the total amount paid out by the individual’s Partnership Policy for long-term care services. In essence, for every dollar paid out by a Long-Term Care Partnership Policy, an equivalent dollar of assets is shielded from Medicaid’s asset limit.
This asset protection also extends to Medicaid’s Estate Recovery Program (MERP). After a Medicaid recipient passes away, MERP may attempt to recover funds spent on their long-term care. A person’s home is often a significant asset targeted for recovery. While a home is typically exempt from Medicaid’s asset limit during the beneficiary’s lifetime, it is not automatically exempt from MERP. However, through a LTC Partnership Program, a Medicaid recipient can designate their home as a protected asset, thus preventing its sale to reimburse the state for care costs. This allows the home to be passed on to heirs.
Example: Consider David, who has a Long-Term Care Partnership Policy that has paid out $150,000 for his long-term care. This means $150,000 of his assets are protected from both Medicaid’s asset limit and Estate Recovery. Given Medicaid’s standard $2,000 asset limit, David can retain $152,000 in countable assets. If his assets include a $90,000 home, $60,000 in investments, and $2,000 in a savings account, he can protect his home and investments, ensuring they can be inherited by his family after his death.
How Long Term Care Partnership Programs Work
To leverage asset protection through Medicaid’s asset limit and Estate Recovery, individuals must have purchased and received benefits from a Qualified Long-Term Care Insurance Policy, also referred to as a Partnership Policy. The principle is dollar-for-dollar protection: for every dollar the insurance policy pays out for long-term care, a dollar is protected from Medicaid consideration.
A common question is whether a Partnership Policy purchased in one state is valid if the policyholder applies for long-term care Medicaid in a different state. The answer depends on several factors. Both states must have Partnership Programs, the policyholder must meet the Partnership Program requirements of the state where they are applying for Medicaid, they must satisfy that state’s Medicaid eligibility criteria, and the two states must have a reciprocal agreement. Reciprocity ensures that asset protection is maintained even if the policyholder moves across state lines.
Regarding Partnership Program requirements, some states require policyholders to fully exhaust their insurance benefits before applying for long-term care Medicaid. This means the entire benefit amount of the policy must be paid out before Medicaid eligibility is considered. Conversely, other states do not mandate benefit exhaustion; asset protection is granted based on the amount the policy has paid out up to the point of Medicaid application.
Long Term Care Partnership Program Eligibility Criteria
When to Purchase a Policy?
Prospective participants in Long-Term Care Partnership Programs should purchase a Partnership Policy while they are in relatively good health and before long-term care is immediately needed. It’s generally too late to enroll in the program if an individual is already living in a nursing home, as they are unlikely to qualify for a new policy. Similarly, a diagnosis of Alzheimer’s or a related dementia, even in an otherwise healthy individual, would likely disqualify them from obtaining a policy. Health screenings are a standard requirement for long-term care insurance policies.
Eligibility for LTC Partnership Programs involves two main components: the criteria associated with a Qualified Long-Term Care Insurance Policy and the general eligibility criteria for long-term care Medicaid. It’s important to remember that specific requirements can vary by state; the rules are not uniform nationwide.
Partnership Program / Policy Criteria
- State Program Availability: The individual’s state of residence must offer a Partnership Program.
- Qualified Policy Purchase: A partnership-qualified policy must be purchased from a private insurance company. Both the insurer and the specific long-term care policy must be approved by the state Partnership Program in the purchaser’s state of residence. Non-partnership long-term care insurance policies, while providing coverage, do not offer Medicaid asset protection or Medicaid Estate Recovery protection.
- Health Status: The applicant must be in reasonably good health to secure coverage.
- Inflation Protection: Partnership-qualified policies are typically required to include inflation protection, adjusting benefit levels to keep pace with rising long-term care costs. This can result in total benefits paid out exceeding the originally purchased amount. An exception to this requirement is often made for individuals over the age of 75.
- Federal Tax Qualification: The Partnership Policy must be a federally tax-qualified long-term care plan, allowing a portion of the premium costs to be tax-deductible.
- Premium Affordability: The individual must be able to afford the ongoing monthly or annual premiums.
- Reciprocity or State of Purchase: To ensure asset protection (from asset limits and Medicaid Estate Recovery), the policyholder must receive long-term care Medicaid in the state where they purchased the partnership policy, or in a state with a reciprocal LTC Partnership Program agreement.
Long Term Care Medicaid Eligibility Criteria
To qualify for long-term care Medicaid, applicants must meet the following general criteria:
- Functional Need for Long-Term Care: This usually requires demonstrating a need for care at a Nursing Home Level of Care. More information on Nursing Home Level of Care is available.
- Limited Monthly Income: In 2025, the income limit is generally around $2,901 per month, though this figure can vary.
- Limited Countable Assets: Most states set an asset limit of $2,000 for countable assets. However, a Partnership Policy allows for additional asset protection beyond this limit. California, notably, has no asset limit, allowing individuals with unlimited assets to qualify.
State-specific Medicaid long-term care requirements can be reviewed for detailed information. Exceeding income or asset limits does not automatically disqualify applicants from Medicaid; Medicaid planning strategies are available to help individuals navigate these rules. Information on Medicaid planning strategies is accessible here.
LTC Partnership Programs Costs
The cost of a Long-Term Care Partnership Policy is highly variable, influenced by factors such as the insurance provider, the age of the policy purchaser (premiums are lower for younger individuals), marital status (couples often receive lower premiums than individuals), gender (women typically face higher premiums), and the extent of coverage or benefit amount.
According to the American Association for Long-Term Care Insurance (AALTCI) data from 2024, the average annual premium for a traditional long-term care insurance policy with $165,000 in coverage for a 55-year-old single male is approximately $950 (or about $79 per month). For a woman of the same age and coverage level, the average annual premium is around $1,500 (or $125 per month). For a 55-year-old married couple, with $165,000 coverage for each spouse, the average annual cost is about $2,080 (or $173 per month).
Premiums increase with inflation protection options. For initial coverage of $165,000 with a 2% annual benefit increase, the average annual cost for a 55-year-old single man is approximately $1,750 ($146 per month), and for a woman of the same age and coverage with the same benefit increase, it’s around $2,800 ($233 per month). For a married couple, both 55 with $165,000 coverage and a 2% benefit increase, the average annual cost is about $3,875 ($323 per month).
Which States Have LTC Partnership Programs?
Long-Term Care Partnership Programs are available in most U.S. states. Currently, Alaska, Hawaii, Massachusetts, Mississippi, Utah, Vermont, and Washington, D.C. do not have these programs. Mississippi has recently passed legislation to establish a program, which is expected to be implemented soon. Utah authorized a Partnership Program in 2014, but it has not been fully implemented due to a lack of long-term care insurers offering Partnership Policies in the state. To verify the status of a Partnership Program in a specific state, contact the state’s Department of Insurance. Contact information for state Departments of Insurance is available here.
How to Get Started
The first step is to contact your state Department of Insurance to confirm the presence of a Long-Term Care Partnership Program in your state. The Department can provide detailed information about the program and guide you towards insurance companies that offer Partnership Policies in your area. Alternatively, your state Medicaid agency may also offer helpful resources. State Medicaid agency contacts can be found here.
