Medicaid Partnership Long-Term Care Programs by State

Planning for long-term care is one of the most important financial decisions you can make as you approach retirement. Nursing home costs now exceed $10,965 per month for a private room in many parts of the country, and Medicaid typically requires you to spend nearly all of your assets before it will pay for your care. Medicaid Partnership long-term care programs offer a way to bridge this gap. These programs, available in roughly 40 states, let you buy a qualifying long-term care insurance policy and protect your assets dollar-for-dollar if you ever need to transition to Medicaid coverage.

What Are Medicaid Partnership Programs?

Medicaid Partnership programs are joint state and federal initiatives designed to encourage more Americans to plan ahead for long-term care costs. The programs create a link between private long-term care insurance and public Medicaid benefits. When you purchase a Partnership-qualified long-term care insurance policy and later exhaust those benefits, you can apply for Medicaid while keeping a portion of your assets that would normally need to be spent down.

The concept originated in the 1980s when four states — California, Connecticut, Indiana, and New York — launched pilot programs. The Deficit Reduction Act of 2005 (DRA) expanded the program nationally, allowing all states to create their own Partnership programs. Today, approximately 40 states have active programs. For a deeper comparison of how long-term care insurance interacts with Medicaid, see our guide on long-term care insurance vs. Medicaid.

The goal of Partnership programs is twofold. First, they reduce the financial burden on state Medicaid budgets by encouraging private insurance coverage. Second, they give individuals a way to protect their hard-earned savings while still having a safety net if their care needs exceed what their insurance covers.

How Dollar-for-Dollar Asset Protection Works

The central feature of most Partnership programs is dollar-for-dollar asset protection. This means that for every dollar your Partnership long-term care insurance policy pays out in benefits, you can shield one dollar of your personal assets from Medicaid's spend-down requirements.

Here is a simple example to illustrate how it works:

• You purchase a Partnership-qualified LTC policy with a total benefit pool of $200,000.
• Years later, you need long-term care and your policy pays out the full $200,000 in benefits over several years of care.
• You still need care after your policy benefits are exhausted. You apply for Medicaid.
• Because your policy paid $200,000 in benefits, you can keep $200,000 in assets and still qualify for Medicaid. Without the Partnership policy, you would need to spend down to roughly $2,000 in countable assets.

Indiana's original Partnership program used a slightly different model called total asset protection, where any amount of insurance purchased could protect all of your assets. However, most states that implemented programs after the DRA use the dollar-for-dollar model. Check with your state to confirm which model applies.

It is important to note that the asset protection also extends to Medicaid estate recovery. Normally, after a Medicaid beneficiary passes away, the state can attempt to recover long-term care costs from their estate. With a Partnership policy, the protected asset amount is also shielded from estate recovery, which means you can pass those assets to your heirs.

Which States Have Partnership Programs?

As of 2026, approximately 40 states have implemented Medicaid Partnership long-term care programs. The original four pilot states were California, Connecticut, Indiana, and New York. After the Deficit Reduction Act of 2005, most other states followed with their own programs.

States with active Partnership programs include, among others:

• Original pilot states: California, Connecticut, Indiana, New York
• Large-population states: Florida, Texas, Pennsylvania, Ohio, Georgia, North Carolina, Virginia, Michigan, New Jersey
• Other participating states: Alabama, Arizona, Arkansas, Colorado, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, Wisconsin, Wyoming, and others

States that have not implemented Partnership programs as of 2026 include Alaska, Hawaii, and Illinois. A few other states may have authorized the program through legislation but have not yet fully implemented it. Because state participation changes over time, always verify with your state Medicaid office or department of insurance before purchasing a policy.

Requirements for Partnership-Qualified Policies

Not every long-term care insurance policy qualifies as a Partnership policy. To receive the asset protection benefit, your policy must meet specific requirements set by both federal and state regulations.

• Tax-qualified status: The policy must be a tax-qualified long-term care insurance policy under federal guidelines. This means it meets the standards set by the Health Insurance Portability and Accountability Act (HIPAA).
• Inflation protection: The policy must include inflation protection. For buyers under age 61, compound annual inflation protection is required. For buyers ages 61 to 75, some form of inflation protection is required. For buyers over 76, inflation protection must be offered but may not be mandatory.
• State approval: The policy and the insurance company must be approved by your state's insurance department to participate in the Partnership program. Not all insurers offer Partnership-qualified policies in every state.
• Agent training: The insurance agent who sells you the policy must have completed state-required Partnership training. This ensures that agents properly explain how the program works and what benefits you receive.
• Purchased in a Partnership state: You must purchase the policy while you are a resident of a state that has an active Partnership program. If you buy a non-Partnership policy, you cannot later convert it to Partnership status.

How to Qualify for Medicaid After Using a Partnership Policy

Having a Partnership policy does not automatically qualify you for Medicaid. You still need to meet Medicaid's other eligibility requirements, including income limits. The Partnership benefit specifically addresses the asset test, not the income test.

Here is the general process for transitioning from a Partnership policy to Medicaid:

1. Your long-term care insurance policy pays benefits for your care until the benefit pool is exhausted.
2. You apply for Medicaid long-term care coverage in your state of residence.
3. Your state Medicaid office verifies your Partnership policy and the total amount of benefits it paid out.
4. The Medicaid office applies the dollar-for-dollar disregard, allowing you to keep assets equal to your total policy payout above the standard Medicaid asset limit.
5. If you meet all other eligibility requirements, Medicaid begins covering your care.

Keep in mind that you must still meet your state's Medicaid income requirements. Some states use income trusts or other mechanisms to help individuals qualify. For more details on Medicaid's financial requirements, read our guide on Medicaid spend-down rules for long-term care.

Real-World Scenarios: How Partnership Programs Help

To better understand the value of a Partnership program, consider these two scenarios involving a retiree with $350,000 in savings who needs long-term nursing home care.

Scenario 1: Without a Partnership policy

The retiree has no long-term care insurance. Nursing home care costs approximately $11,000 per month. After about 2.5 years of care, the retiree has spent nearly all of the $350,000 in savings. Once assets are reduced to about $2,000, the retiree qualifies for Medicaid. The family inherits essentially nothing from those savings, and the state may pursue estate recovery for any remaining assets.

Scenario 2: With a Partnership policy

The retiree purchased a Partnership-qualified LTC policy years earlier with a benefit pool of $250,000 (including inflation growth). The policy pays for the first several years of care, disbursing $250,000 in total benefits. When the policy benefits are exhausted, the retiree applies for Medicaid. Thanks to the Partnership asset protection, the retiree can keep $250,000 in assets (the amount the policy paid out) plus the standard Medicaid asset allowance. The family can eventually inherit those protected assets, and they are also shielded from Medicaid estate recovery.

The Inflation Protection Requirement

One of the most important requirements for Partnership policies is inflation protection. This requirement exists because long-term care costs rise steadily over time. Without inflation protection, a policy you buy today could fall far short of covering care costs 20 or 30 years from now when you are most likely to need it.

The inflation protection requirements for Partnership policies are based on your age at the time of purchase:

• Under age 61: Compound annual inflation protection is required. This means your benefits grow by a percentage each year, applied to the current (already increased) benefit amount. A 3% compound inflation rider on a $150 daily benefit would grow it to about $272 per day after 20 years.
• Ages 61 to 75: Some form of inflation protection is required, but it does not have to be compound. Simple inflation protection (which adds the same flat dollar amount each year) may be sufficient depending on your state's rules.
• Over age 76: Inflation protection must be offered to you, but you may not be required to accept it. However, declining inflation protection can reduce the long-term value of your policy and your asset protection.

With long-term care costs currently rising at 3 to 5 percent per year, inflation protection is a valuable feature even for non-Partnership policies. It ensures that your benefits remain meaningful when you actually need to use them, potentially decades after you purchase the policy.

State Reciprocity and Moving Between States

A common concern with Partnership policies is what happens if you move to a different state. The Deficit Reduction Act requires states that adopted Partnership programs after 2005 to honor Partnership policies from other participating states. This is known as reciprocity.

However, there are some important caveats:

• The original four Partnership states (California, Connecticut, Indiana, and New York) were established before the DRA and may have different reciprocity rules. New York, for example, historically did not guarantee reciprocity with other states.
• If you move to a state without a Partnership program, you may lose the asset protection benefit entirely, since Medicaid in that state may not recognize the Partnership designation.
• Your long-term care insurance policy itself remains valid regardless of where you move. The insurance benefits do not change. Only the Medicaid Partnership asset protection may be affected.

If you are considering a move in retirement, contact the Medicaid office in your potential destination state to confirm whether your Partnership policy will be honored. This simple step can save you from unexpected surprises down the road.

How to Find a Partnership-Approved Policy

Finding the right Partnership-qualified long-term care insurance policy requires some research. Here are the steps to get started:

1. Contact your state insurance department: Ask which insurance companies are approved to sell Partnership-qualified policies in your state. Your state insurance department maintains a list of approved carriers.
2. Work with a Partnership-trained agent: Only agents who have completed specific Partnership training are authorized to sell these policies. Ask any agent you work with to confirm their Partnership certification.
3. Verify the policy's Partnership status: Before purchasing, confirm in writing that the policy you are buying is Partnership-qualified. The policy documents should clearly state that it meets Partnership program requirements.
4. Compare multiple quotes: As with any insurance purchase, compare quotes from several carriers. Look at the benefit amount, benefit period, elimination period, and inflation protection options. The cost of inflation protection varies significantly between insurers.
5. Review the insurer's financial strength: Because you may not need your policy for 20 or 30 years, choose an insurance company with strong financial ratings from agencies like A.M. Best, Standard & Poor's, or Moody's.

For a broader overview of how long-term care insurance works, including benefit triggers and policy types, see our complete guide to long-term care insurance.

Is a Partnership Policy Right for You?

A Medicaid Partnership long-term care policy is worth considering if you fall into the broad middle class — you have enough assets to protect but not enough to comfortably self-insure against potentially years of long-term care costs. It is especially valuable if you want to preserve an inheritance for your family or if you are concerned about the possibility of outliving your care benefits.

A Partnership policy may be a good fit if you:

• Have assets between $100,000 and $500,000 that you want to protect
• Live in a state with an active Partnership program
• Are concerned about exhausting your insurance benefits and then spending down all your savings on Medicaid
• Want to leave a financial legacy to your children or spouse
• Plan to remain in your current state or another Partnership state through retirement

On the other hand, if you have very few assets, you may qualify for Medicaid without needing to purchase insurance. If you are very wealthy, you may prefer to self-insure or use other strategies. And if you live in a state without a Partnership program, you can still benefit from a standard long-term care insurance policy — you simply will not receive the additional Medicaid asset protection.

Medicaid Partnership long-term care programs represent one of the most effective tools available for middle-income Americans to plan for long-term care while protecting their financial security. By combining private insurance with a public safety net, these programs offer a practical path forward in a landscape where long-term care costs continue to rise. Talk to a licensed insurance agent with Partnership training in your state and consider consulting an elder law attorney who understands your state's Medicaid rules. The earlier you plan, the more options you will have to protect both your care and your assets.