The Long Term Care Partnership Program is generally referred as a public-private partnership between private insurance companies and states. It is a program that involves state government as well as private insurers. It is designed to reduce Medicaid expenditures by eliminating or delaying the need for some people to rely on Medicaid to pay for LTC services.

The main purpose of Long Term Care Partnership Program is to encourage people to prepare for their future care needs by purchasing insurance which pays when a person must be moved into a long term care facility such as a nursing home.

This program was developed in the 1980's to encourage people to purchase long-term care insurance instead of turning to Medicaid. Initially, there were only 4 states that participated in this program such as Connecticut, New York, Indiana, and California. The Deficit Reduction Act of 2005 now allows all states to participate in the Partnership Program.

The partnership polices in these new Partnership states must meet some criteria such as identified consumer protections, federal tax-qualifications and inflation protection. Under this program, the state will disregard the personal assets of policyholder equal to amounts paid out under a qualifying insurance policy while determining the person's eligibility for Medicaid assistance.

People who purchase qualified Long-Term Care Insurance Partnership policies get initial long-term care coverage from their private insurance carrier. If they seek Medical Assistance coverage for their long-term care needs, they can be allowed to eliminate some amount of personal assets and still be eligible for Medical Assistance. That amount will be equal to the amount of benefits which is received under the qualified Long-Term Care Insurance Partnership policy.

It is important to keep in mind that there are only certain types of long term care policies that qualify for the Partnership Program. The federal and state laws governing the program are subject to change. If you want to purchase a long term care insurance, you should talk with your agent about whether a Partnership Policy is appropriate for your needs.