Long-Term Care Partnership Program: States, Reciprocity, Rules

What the page answers, and what it does not

Most pages on this topic list states and say “dollar for dollar”. This page reads the statute and the state documents for the three points that decide whether a partnership policy pays off for a person with $250,000 to $2,000,000: what exactly is protected, what a policy must contain at your age, and whether the protection survives a move. It differs from our pages on the Medicaid look-back and asset protection trusts and on the community spouse and home equity limits, which cover planning without insurance, and from our hybrid policy tax guide, which covers the tax side of the same contracts.

One correction to the way this is usually described. The partnership is not a federal product; it is a state plan amendment approved by CMS. Each state decides its own effective date, and a policy bought before that date cannot qualify. Federal law sets the floor and the states add their own rules, such as the inflation percentage, how you designate protected assets and who may use the disregard.

What the disregard protects, line by line

The federal definition sits in the Medicaid estate recovery section, not in a separate partnership statute. The conditions on the policy and the state are in the table.

The Deficit Reduction Act added a time rule: a state plan amendment may apply to policies issued on or after a date not earlier than the first day of the first calendar quarter in which the amendment was submitted (section 6021(a)(3)). So the effective date in the state’s amendment is not always the day the state started selling.

Two limits sit outside the statute but inside the state documents we read. Ohio’s rule says the disregard “is only available to the individual on whose behalf the qualifying QLTCP benefits were paid,” and Washington says the protected value does not carry over to a spouse. A couple therefore needs a policy for each spouse to double the shield (our reading). Washington also lists home equity above its standard among assets that cannot be protected, and Ohio’s rule says a disregard “cannot reduce patient liability or cost of care”: the disregard is about assets, not about the income a nursing-home resident must contribute.

Inflation protection by age at purchase

The statute fixes a floor by the buyer’s age on the purchase date. It does not set a percentage; states and the market fill that in.

A reading note. The CMS 2006 background note summarizes the middle band as “61 to 76” and the top as “over 76”. The statute says a buyer who “has attained age 61 but has not attained age 76”, so 76 is already in the optional band. The federal text controls, and the statute is what the table uses. The state percentages above are dated: the 2009 report reflects October 2008, and we did not read the current inflation rule of other states.

Worked example: a $300,000 policy and a $650,000 estate

This is our arithmetic. The numbers are an illustration, not a forecast.

Assume a single person with $650,000 of assets that count for Medicaid, a state resource limit of $3,000 (Minnesota’s published figure; many states use $2,000), and a partnership policy that has paid $300,000 in benefits and is exhausted.

• Without a partnership policy. To qualify, the person must bring countable assets down to $3,000. Spend-down: $650,000 minus $3,000 = $647,000.
• With the policy. Ohio’s rule lets disregarded resources total the disregard plus the resource limit, so the person can hold $300,000 plus $3,000 = $303,000 and qualify. Spend-down: $650,000 minus $303,000 = $347,000. The disregard protects $300,000, which is 46.2 percent of the estate.
• At death. Suppose Medicaid then pays $90,000 of nursing facility care and the estate holds $303,000 with $300,000 designated as protected. Only the unprotected $3,000 is exposed to the claim, assuming no other exemption applies. Without the policy the estate would have held about $3,000 in either case, so the heirs' difference is the $300,000.

How the answer changes with the benefits actually paid, for the same $650,000 estate:

And how the same $300,000 disregard compares with different estates:

Three cautions come straight from the state documents. First, the rule is on benefits paid: Washington’s example 3 has a policy that paid only $125,000 when the insured died with a $185,000 home, so “since the policy only paid out $125,000, that is the amount exempt from estate recovery” and the state recovers on the remaining $60,000. Second, you usually have to designate the assets. Washington requires an asset designation form at application and at each annual review, and Minnesota says that once designated, an asset “cannot be undesignated in favor of protecting another asset,” although it may be spent and still counts against the limit. Third, a transfer of designated assets is handled by state rule: Ohio sets a restricted coverage period only for the excess of an improper transfer over the remaining disregard, and Washington asks you to report and verify any transfer of protected assets.

On estate recovery generally, including which assets each state reaches after death, see our state guide on how Medicaid estate recovery works by state. The partnership rule matters there because section 1396p(b)(1)(C)(ii) removes the recovery duty on the disregarded amount in a state with a qualified partnership, and the 2008 reciprocity standard extends that exemption to out-of-state policies in participating states.

Which states run a program

Not every state publishes a clean list, and the documents we could open give different dates and counts. We built the table only from documents we opened; any cell we did not verify says so.

The remaining states are not in this table because we did not open their documents. For a count, the sources disagree because they are from different years. ASPE’s June 2012 brief says the 2005 law repealed the 1993 ban and “40 additional states now sponsor Partnership policies” on top of the original four. The Florida Legislature’s report found 20 states with an active program as of October 2008. A March 2025 paper in Health Economics lists 10 jurisdictions as non-partnership (Alaska, the District of Columbia, Hawaii, Illinois, Massachusetts, Michigan, Mississippi, New Mexico, Utah and Vermont) and counts 3 states adopted in 2006, 20 in 2007 and 2008, 10 in 2009 and 2010 and 4 in 2011 and 2012 (our arithmetic: 37, or 41 with the four pre-1993 states). That paper takes its state data from a trade association’s website, and its sample period is not 2026, so treat the list as a lead and not as a fact for today. We found no current federal list; the Deficit Reduction Act told HHS’s National Clearinghouse for Long-Term Care Information to maintain one for reciprocal states, and we could not open it.

Reciprocity between states

The reciprocity rule is a federal standard that states join by default.

• Section 6021(b) of Public Law 109-171 told HHS to develop standards for “uniform reciprocal recognition” of partnership policies, under which benefits “will be treated the same by all such States,” and states with a partnership “shall be subject to such standards” unless they notify the Secretary in writing that they elect to be exempt.
• HHS published the standard on September 2, 2008 (73 Federal Register 51302), effective January 1, 2009. It was a notice with a comment period; we found no later final text.
• In a participating state, a person who bought a policy in another participating state and applies there “will receive an asset disregard in an amount equal (dollar for dollar) to the benefits received under the policy,” with the same estate recovery exemption.
• Both ends must participate. The notice says “both the State in which the individual is applying, and the State in which the Partnership policy was purchased, must currently be participating in the reciprocity standards,” and an exemption applies “regardless of when a Medicaid applicant originally purchased a Partnership policy.”
• A person already found eligible with a disregard keeps it if the state later becomes exempt. A state must give 60 days written notice to leave.
• A pre-1993 state joins only by a new plan amendment. Indiana did on April 1, 2009.

What reciprocity does not do is as important. The notice says an applicant “must meet all other Medicaid eligibility requirements in the State in which they are applying,” and it gives the example that one state may require benefits to be exhausted before applying while another allows an application with benefits remaining. So the state where you move decides the home equity limit, the resource limit, the designation procedure and the transfer rules. Texas puts the risk on the form it requires with every policy: “The purchase of a Partnership policy, however, does not guarantee you the ability to disregard assets.” Washington’s page gives the sharpest example: New York policies under the total-asset model do not meet its requirements. Since the DRA allows only dollar-for-dollar policies (GAO says insurers may not offer the total-asset feature found in New York and Indiana), a new policy sold today is dollar for dollar.

Partnership policy or hybrid life/long-term care policy

A hybrid contract pairs long-term care benefits with a life insurance death benefit or an annuity value; our hybrid long-term care tax guide covers its tax treatment, including why a charge against cash value gets no medical deduction and how a Section 1035 exchange works. The partnership label and the hybrid label answer different questions, and they can overlap: the statute requires a tax-qualified contract under Section 7702B(b), and a qualified hybrid is one. Whether a given hybrid is certified as a partnership policy in your state is an insurer-by-state question that we did not verify, and it is the first thing to ask in writing.

The trade-off, from the documents and our reading:

• What a partnership policy adds. An asset shield of the benefits paid, from Medicaid eligibility and from estate recovery. It does nothing if you never need Medicaid. ASPE’s 2012 brief says it is “not clear that the Partnership has caused an increase in total sales” and that the policyholder profile “looks similar to traditional private LTCI.”
• What it costs in design. Inflation protection is required by age: compound annual under 61, some level 61 to 75. A contract without it cannot qualify for a buyer in those bands, and compound protection raises the premium or lowers the starting benefit (our reading).
• What a hybrid adds. A death benefit or value that does not depend on using care and a different premium structure. Those features are not in the statute and vary by contract; read the contract.
• How to compare. Ask for the partnership status in writing, the inflation design for your age, the dollars the contract can pay, and the assets you expect to keep. At $2,000,000 a $300,000 disregard protects 15.0 percent (our arithmetic); at $650,000 it protects 46.2 percent.

For the premium side of the same contracts, see the long-term care premium deduction limits by age.

What the official counts show about who uses it

GAO counted about 218,000 policies sold and about 190,000 active in the four original states in 2006, with 73,811 in California (through March 2006), 33,040 in Connecticut (through March 2006), 31,750 in Indiana (through June 2006) and 51,262 in New York (through December 2005). ASPE’s June 2012 brief, citing a 2011 industry report, put the national total at 747,487 sold and 640,897 in force, 12 percent of 2005-2010 sales (14 percent of individual and 6 percent of group). In Connecticut, 53,064 policies bought in the first 18 years produced 1,311 claims, and 95 of those claimants went on Medicaid after using up their benefits. Our arithmetic: 7.2 percent of claims and 0.18 percent of policies bought. We found no later official count.

Our reading for a reader with $250,000 to $2,000,000: the shield is aimed at a reader who could end up on Medicaid after a long claim. It is most valuable when a policy is likely to run out and the estate is not much larger than the benefits, and least where the estate dwarfs the policy.

Decision points before buying or relying on a policy

What the documents make decisive, not a recommendation (our reading):

• Effective date of your state’s amendment. A policy issued before it cannot qualify. We read this date for only a few states.
• Your age on the purchase date. It sets the inflation requirement: under 61 compound annual; 61 to 75 some level.
• Which state you will apply in. Reciprocity needs both states to participate on the day you apply, and the state of application sets the other Medicaid rules.
• How the shield is claimed. Designation forms, annual reviews, proof from the insurer, and rules on transfers differ by state.
• Two people, two policies. The shield does not pass between spouses in the Ohio and Washington texts.
• What stays outside. Home equity above the limit, trust assets and annuity interests listed in Washington’s rule are not protected.

A partnership policy is sold by a licensed insurance agent trained under the state’s program; the Medicaid application is made to the state agency; elder law attorneys draft the legal planning. The match below connects you with fee-only or fee-based financial advisers who can put the policy against the rest of the balance sheet: how much care you could pay for yourself, what the premiums cost and what tax and estate effects follow. An adviser does not decide Medicaid eligibility or whether a policy is certified.

This is analysis of public documents, not investment, legal or tax advice.

What a reader can do with this

• Ask the insurer in writing: is this contract a partnership policy in my state, as of which plan amendment date, and which inflation option makes it qualify at my age?
• Ask your state Medicaid agency or insurance department for the current partnership list and reciprocity status. The documents we read are dated: North Dakota’s page, Louisiana’s FAQ and Indiana’s page carry no date.
• Do the sum for your own estate: estate minus (benefits you expect the policy to pay plus your state’s resource limit) is the spend-down; compare it with what the premiums cost.
• If you may move, check that both your current state and the state you may retire to participate in the reciprocity standard, and that the new state’s rules on home equity and designation suit you.
• If a spouse is also insured, treat the two shields as separate: Ohio and Washington texts do not let one pass to the other.
• Read the estate recovery rules of your state in our state guide before relying on the shield for heirs.
• Compare with a hybrid using the hybrid tax guide, including the 1035 and per diem rules.

FAQ

Sources, read and saved on November 8, 2026: 42 U.S.C. 1396p, United States Code 2024 edition, Government Publishing Office (govinfo.gov); Public Law 109-171, section 6021, govinfo.gov; HHS ASPE, State Long-Term Care Partnership Program: State Reciprocity Standard, 73 Federal Register 51302, September 2, 2008 (FR Doc. E8-20225, text copy at vLex); CMS DEHPG/DEEO Long-Term Care Partnerships Background, July 25, 2006; GAO-07-231, May 2007; HHS ASPE Research Brief, Long-Term Care Insurance, June 2012; Florida OPPAGA Report 09-08; Washington Health Care Authority long-term care partnership page (WAC 182-513-1400 to 182-513-1455); North Dakota Insurance Department partnership page; Fla. Admin. Code R. 69O-157.201 and Ohio Admin. Code 5160:1-6-02.2 (Cornell LII copies); Minnesota DHS Health Care Eligibility Manual 2.4.2.2 and Minnesota Department of Commerce partnership page; Indiana Long Term Care Insurance Program reciprocity page; Louisiana Department of Health FAQ; Pennsylvania Act 40 of 2007; Texas Department of Insurance form LHL569; Costa-Font and Raut, Health Economics 34(6), March 15, 2025. State pages carry no update dates unless stated; worked examples are our arithmetic. State rules and plan amendment dates differ and change.