LTC Partnership reciprocity lets eligible long-term care policies provide dollar-for-dollar Medicaid asset protection even if you move from your original state to another state that participates in the reciprocity compact. In plain English: benefits paid by a qualified Partnership policy can allow you to keep an equal amount of assets if you later apply for Medicaid—and many states agree to honor that protection when you relocate. At Diversified Insurance Brokers, we help you compare carriers, confirm Partnership eligibility, and structure benefits that travel with you.

What Is an LTC Partnership Policy?

An LTC Partnership policy is a state-approved long-term care insurance contract that meets specific consumer-protection standards—most notably, offering Medicaid asset disregard. For every $1 of long-term care insurance benefits paid on your behalf, you can generally keep $1 of assets from spend-down calculations if you later apply for Medicaid. This protection is in addition to standard estate allowances and can meaningfully preserve savings for a spouse or heirs.

How Reciprocity Works When You Move

Most states participate in a reciprocity compact that recognizes Partnership asset protection earned in another participating state. If you bought a Partnership policy in State A and later retire to State B (that honors reciprocity), the amount of asset disregard you’ve accrued should be recognized when you apply for Medicaid in State B—subject to that state’s Medicaid rules and residency requirements.

• Dollar-for-dollar protection follows you: Benefits paid under your original Partnership policy can translate into protected assets in your new state.
• You must still meet Medicaid rules in your new state: Eligibility thresholds, income rules, and estate recovery procedures vary by state.
• Reciprocity ≠ benefits portability terms: Your policy benefits (home care vs. facility, daily/monthly limits) travel nationwide per contract; reciprocity specifically refers to how your asset disregard is treated if you need Medicaid.

Partnership Eligibility Basics (What Makes a Policy “Count”)

• State approval: The policy must be issued under a state’s Partnership program.
• Inflation protection: Many states require age-based inflation options at purchase (e.g., 3% or 5% compound for buyers under certain ages). We’ll configure this alongside your elimination period and benefit period.
• Consumer protections: Policies must meet specific disclosure and design standards to qualify.

Note: Not all carriers file Partnership-eligible versions in every state, and features can differ. We’ll confirm availability and rules for your residence and any states you’re likely to move to.

Why Partnership Reciprocity Matters

• Mobility: You can relocate for family or climate and still have your accrued asset protection recognized in many states.
• Spouse protection: Asset disregard can help preserve savings for the healthy spouse if one partner needs extended care and eventually Medicaid support.
• Estate preservation: Disregarded assets may be shielded from spend-down, improving the odds of leaving something behind.

Designing a Policy with Reciprocity in Mind

Start with your preferred care setting and budget, then build out the key levers:

• Elimination period (EP): Decide between calendar vs. service-day EPs and a wait length (e.g., 30/60/90 days). Calendar-day EPs typically reach benefits faster when care is intermittent.
• Inflation protection: 3% or 5% compound (simple or CPI-linked options vary). Inflation is central to Partnership eligibility in many states and critical for younger buyers.
• Monthly benefit & benefit period: Balance home-care goals with likely facility costs. Couples often coordinate designs with shared spousal benefits.
• Home vs. facility emphasis: If aging-in-place is the priority, pair design with LTC vs. assisted living considerations.

For Couples: Coordinating Protection

Partnership policies can be issued individually and coordinated as a couple’s strategy. Many clients:

• Use shared spousal benefits to stretch a pool across two lives.
• Choose a calendar-day EP to simplify claim logistics when one spouse is coordinating care.
• Review LTC planning strategies for budget tiers and caregiver relief features.

Traditional LTC vs. Hybrid Life/LTC—What About Partnership?

Partnership eligibility has historically been associated with stand-alone LTC policies, but state rules evolve. If you’re weighing hybrids, start with our guide Hybrid Life vs. Traditional LTC to understand trade-offs in guarantees, legacy value, and LTC leverage, then we’ll confirm state-specific Partnership options.

Examples of Asset Disregard (Simple Illustrations)

• Example 1: Your Partnership policy pays $250,000 of LTC benefits. If you later apply for Medicaid in a reciprocity state, you may be able to exclude $250,000 of assets from spend-down calculations (subject to that state’s rules).
• Example 2: A couple relocates closer to their children. Their accrued Partnership benefits are recognized in the new state; they coordinate with shared spousal benefits and an EP aligned with expected home care.

Important Caveats & Good Habits

• State rules vary: Medicaid eligibility and estate recovery procedures differ. Partnership reciprocity addresses asset disregard recognition—other criteria still apply.
• Keep paperwork: Retain your Partnership disclosure, declarations page, and benefit statements showing benefits paid (for asset disregard tracking).
• Re-review after moves: When you change residency, schedule a benefit review with us to align design and documentation with your new state’s procedures.

Frequently Asked Questions