A partnership policy in the long-term care context is a qualifying long-term care insurance contract that participates in a state-approved Long-Term Care Partnership Program. These policies meet specific federal and state requirements, including consumer protection standards and, often, inflation protection based on issue age. The key benefit is that if the insured exhausts partnership policy benefits and later applies for Medicaid, they may receive a dollar-for-dollar asset disregard equal to the amount of LTC benefits paid, allowing them to protect more personal assets from Medicaid spend-down rules. Partnership policies were created to encourage private LTC planning while easing pressure on public programs.

In real-world planning, advisors present partnership policies to clients who are concerned about both long-term care costs and the possibility of needing Medicaid assistance later in life. They verify which carriers and product designs are approved as partnership-qualified in the client's state and explain the specific asset protection rules and look-back periods involved. Advisors model scenarios showing how a partnership policy with, for example, three hundred thousand dollars of benefits could allow the policyholder to retain an equivalent amount of assets and still qualify for Medicaid if care needs continue beyond policy limits. They frequently coordinate with elder law attorneys to integrate partnership policies into comprehensive asset protection and estate plans. Advisors also emphasize that policyholders must still meet clinical eligibility for Medicaid and that rules vary by state. By understanding partnership policies, producers can offer nuanced long-term care solutions that combine private insurance benefits with potential public program coordination.