LTC Partnership Programs

What Are Long-Term Care Partnership Programs?

Long-Term Care (LTC) Partnership Programs, also called Qualified State Long-Term Care Partnership Programs, are collaborations between private long-term care insurance companies and a state’s Medicaid program. These programs encourage individuals to purchase long-term care insurance to help cover care costs while reducing the financial strain on Medicaid.

For seniors who may need long-term care Medicaid in the future, these programs can protect some or all of a participant’s assets from Medicaid’s asset limit. They can also safeguard those assets from Medicaid’s Estate Recovery Program (MERP), which seeks repayment for care costs after a Medicaid beneficiary’s death. In short, they act as an asset protection strategy, allowing certain property and savings to pass to heirs instead of the state.

LTC Partnership Programs began in 1992 in four states—California, Connecticut, Indiana, and New York. A 1993 federal law paused expansion, but the 2005 Deficit Reduction Act allowed all states to create their own programs. Today, they are available in most states except Alaska, Hawaii, Massachusetts, Mississippi, Utah, Vermont, and Washington, D.C. State names and details vary, so it’s important to confirm specifics with your state’s Department of Insurance.

What Services Do LTC Partnership Programs Cover?

Long-term care includes a range of services for individuals who cannot perform daily activities like bathing, dressing, and toileting. Coverage may include:

In-home personal care assistance
Home health aides
Adult day care
Assisted living
Memory care
Nursing home care

What Are the Key Benefits of LTC Partnership Programs?

The primary advantage is asset protection. Partnership participants can keep assets above Medicaid’s usual limit and protect them from Estate Recovery. While this program protects assets, it does not shield a Medicaid applicant’s income.

Typically, Medicaid’s asset limit for long-term care is $2,000 (varies by state), excluding certain exempt items like a primary home, household items, and one vehicle. Without asset protection, applicants must spend down excess assets to qualify.

Partnership Programs allow applicants to protect an amount of assets equal to what their Partnership Policy paid out. For example, if a policy covers $100,000 in care, that same amount is disregarded from Medicaid’s asset limit and from MERP claims.

Example

Fred’s policy paid out $100,000 in benefits. Normally, Medicaid allows $2,000 in assets, but Fred can keep $102,000 total—$2,000 plus the $100,000 protected. He designates his $75,000 home and $25,000 in savings as protected, so they pass to his heirs after death without being claimed by Medicaid.

How Do LTC Partnership Programs Work?

To qualify for asset protection, one must have a Qualified Long-Term Care Insurance Policy that meets state Partnership Program requirements. For every dollar the policy pays for care, a dollar is protected from Medicaid’s asset and estate recovery rules.

If moving to another state, both states must have Partnership Programs, meet reciprocity rules, and the policyholder must meet eligibility requirements in the new state. Some states require full “exhaustion” of benefits before applying for Medicaid, while others allow protection for whatever amount was paid out before application.

Who Is Eligible for a LTC Partnership Program?

Partnership Policy Requirements

Reside in a state with a Partnership Program.
Purchase a partnership-qualified policy from a state-approved private insurer.
Be in reasonably good health (medical screening often required).
Have inflation protection (required for most buyers under age 75).
Policy must be a federally tax-qualified long-term care plan.
Be able to afford the ongoing premium cost.
For asset protection, receive Medicaid in the same state where the policy was purchased or in a reciprocal state.

Long-Term Care Medicaid Requirements

Have a functional need for long-term care (usually Nursing Home Level of Care).
Have income within Medicaid’s limit—generally $2,901/month in 2025.
Have countable assets at or below $2,000 (except in states like California with no limit). Partnership Policies allow protection of additional assets.

How Much Do LTC Partnership Policies Cost?

Premiums vary by company, age, marital status, sex, coverage amount, and inflation options. According to the American Association for Long-Term Care Insurance (AALTCI) in 2024:

Single male, age 55, $165,000 coverage: ~$950/year
Single female, age 55, $165,000 coverage: ~$1,500/year
Married couple, age 55, $165,000 each: ~$2,080/year
With 2% inflation protection, costs increase (e.g., single male ~$1,750/year, single female ~$2,800/year, couple ~$3,875/year).

Which States Offer LTC Partnership Programs?

Most states do, but Alaska, Hawaii, Massachusetts, Mississippi, Utah, Vermont, and Washington D.C. do not. Mississippi has passed legislation to create a program, and Utah authorized one in 2014, but it has not been implemented. Always confirm with your state’s Department of Insurance.

How Can Someone Get Started?

Contact your state’s Department of Insurance to confirm the program exists and learn about approved insurers. The state Medicaid agency can also be a resource for eligibility details and application assistance.