Michigan and the Long-Term Care Partnership Program: What You Need to Know to Protect Your Assets

Planning for long-term care is one of the most critical aspects of retirement preparation. With the rising costs of in-home caregivers, adult day care centers, assisted living, memory care, and nursing homes, many Americans face financial devastation when they need extended care. 

Michigan residents have a powerful tool that many Michiganders are unaware of that will protect their assets while securing quality care: the Michigan Long-Term Care Partnership Program. 

This state-backed initiative allows policyholders to shelter their assets and qualify for Medicaid while preserving assets equivalent to the benefits paid by their long-term care insurance. Most states are now participating in the program, and financial experts consider it one of the most underutilized retirement planning strategies available today. 

LTC Insurance is Working for Policyholders

Long-Term Care Insurance has been sold for decades, dating back to the 1970s, but it gained significant popularity in the 1990s. AHIP (America's Health Insurance Plans), a national trade association representing the U.S. health insurance industry, reports that more than $2.8 billion in LTC insurance benefits have been paid in Michigan since policies first became available. 

For decades, Long-Term Care Insurance has provided families with financial security and peace of mind, ensuring that care needs don't become family burdens. With over $2.8 billion in benefits paid in Michigan alone, its impact is a testament to the power of planning ahead—protecting dignity, independence, and the ability to choose quality care.

Many of these benefits paid for in-home care, helping older family members stay safe and comfortable in their own homes.

What is the Long-Term Care Partnership Program?

The Long-Term Care Partnership Program is a collaboration between state governments and private insurance companies. It encourages individuals to purchase Long-Term Care Insurance by offering additional asset protection if policy benefits are exhausted.

• Dollar-for-Dollar Asset Protection: For every dollar your long-term care insurance policy pays out in benefits, you can keep an equivalent amount of assets while still qualifying for Medicaid.
• State and Federal Oversight: Partnership policies must meet specific state and federal guidelines to ensure consumer protection.
• Specialized Training: Insurance agents selling partnership policies must undergo specialized training to ensure they understand the program and its benefits.

Many retirees mistakenly believe Medicaid will cover long-term care without consequences. In reality, Medicaid requires spending down assets to near poverty levels—unless you have a partnership-qualified policy.

Medicaid will pay for long-term care expenses by pre-approved providers for those with limited financial resources. Traditional health insurance and Medicare only pay for short-term skilled care.

How Dollar-for-Dollar Asset Protection Works

Asset disregard is a crucial benefit of the Partnership Program. Here's how it works:

1. You purchase a Michigan-approved long-term care insurance policy.
2. Your policy pays for long-term care services, such as nursing home care or home health care.
3. If your policy benefits run out and you still need care, you can apply for Medicaid.
4. Instead of spending down all your assets to qualify, you can retain assets equal to the benefits paid by your policy.

For example, if your long-term care insurance policy pays out $300,000 in benefits, you can keep $300,000 in assets and still qualify for Medicaid assistance.

The Rising Cost of Long-Term Care

Long-term care expenses continue to climb. According to the LTC News Cost of Care Calculator, the average annual cost of a private room in a Michigan nursing home is about $120,000, with costs in some areas of the state much higher. However, most long-term care is delivered at home or in assisted living (including memory care). Home health care and assisted living costs are also very costly and those costs are increasing, making early planning essential.

The biggest mistake people make is waiting too long to plan. By the time they need care, they either can't qualify for insurance or must rely entirely on their savings. The LTC Insurance Long-Term Care Partnership Program offers a proactive solution.

Why Long-Term Care Planning is a Key Part of Retirement Planning

Retirement planning isn't just about managing investments and Social Security—it must also address the reality of longevity and potential health challenges.

Living a long life is a gift, but it comes with inevitable changes—your body slows, your health shifts, and your mind faces new challenges. The key is not just to add years to life, but to prepare for those years with wisdom, care, and the grace to embrace each season as it comes.

As people live longer, they face greater risks of chronic illness, mobility hardships, accidents, dementia, and frailty. These issues often require extended care, which can be financially draining and emotionally and physically overwhelming for families.

• Health insurance and Medicare only cover short-term skilled care: Many retirees assume Medicare will pay for long-term care, but it only covers short-term rehabilitation, not ongoing assistance with daily activities.
• The cost of care is rising in Michigan and nationwide: The price of nursing homes, assisted living, and home care continues to climb, making it crucial to have a plan in place.
• Family impact: A major concern for many Michiganders is their loved ones. Without proper planning, adult children often find themselves in the role of caregivers or struggling to manage professional caregivers for their parents.

Lisa from Grand Rapids, whose father required long-term care, shares a common concern.

We weren't prepared, and I had to juggle my job while coordinating his care. It was stressful for everyone. I wish my parents had explored Long-Term Care Insurance when they were younger.

Having a long-term care plan in place allows your children to remain family members rather than becoming full-time caregivers. It ensures that professional care is available when needed, reducing stress and financial burden for everyone involved.

Who Should Consider a Partnership Policy?

A Michigan Long-Term Care Partnership policy may be a smart choice if:

• You want to protect your savings from long-term care costs.
• You're in reasonably good health - most people obtain coverage between ages 47 to 67.
• You're concerned about access to quality care, asset protection, and not burdening loved ones.
• You want the flexibility of private extended care options, especially at home, instead of relying on government-funded facilities.

If you already have a Long-Term Care policy, check if it qualifies for partnership benefits. If you have not yet considered adding Long-Term Care Insurance to your retirement plan, start by going to the LTC News Long-Term Care Insurance Education Center, where you can gain additional knowledge

Be sure to review your options with a specialist in long-term care planning. Few insurance agents and financial advisors have the expertise and experience needed to navigate LTC Insurance effectively. 

Additionally, many are not certified under the Partnership Program rules, which require specialized training to offer Partnership-eligible LTC Insurance policies with added asset protection benefits. You can rely on LTC News Trusted LTC Insurance Specialists when you seek accurate quotes for Long-Term Care Insurance. Quotes From Trusted Long-Term Care Insurance Specialists.

These LTC News trusted partners are professionals who are screened by LTC News and hold the esteemed CLTC designation, are endorsed by the American Association for Long-Term Care Insurance (AALTCI), and come highly recommended as Ramsey Trusted Pros by financial expert Dave Ramsey's organization (Ramsey Solutions).

The Best Time to Plan for Long-Term Care

Experts agree: the younger you are when you purchase Long-Term Care Insurance, the lower your premiums. The ideal time to secure coverage is before retirement, typically in your 40s to mid-60s.

RELATED: How Much Does Long-Term Care Insurance Cost at My Age?

• Premiums are based on age and health.
• Waiting too long can result in higher costs or ineligibility due to medical conditions.
• Partnership policies are not available from all insurance companies, so it's essential to compare options and work with a qualified specialist.

Shopping around and working with a knowledgeable specialist ensures you get the best coverage for your budget. Prices vary widely, even for the same benefits.

Most top LTC Insurance specialists represent all the major insurance companies that offer long-term care solutions.

• Compare LTC Insurance Providers

Finding the Right Policy

Not all insurance companies offer partnership-qualified policies. To find the right coverage:

• Work with a specialist in long-term care insurance.
• Compare premiums and benefits across multiple insurers.
• Verify that the policy meets Michigan Partnership Program qualifications.

RELATED: Obtaining Long-Term Care Insurance

Take Action Now

The Michigan Long-Term Care Partnership Program provides a rare opportunity to protect your assets while ensuring access to quality care. Don't wait until it's too late—explore your options, compare policies, and safeguard your future today.

For more details on Michigan's requirements, visit Michigan State Resources. If you live in another state, check your eligibility on LTC News.