Understanding Indiana’s Long-Term Care Partnership Program

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One of the most important resources available to Indiana residents is the Indiana Long-Term Care Insurance Program (also known as a Partnership Program). Indiana was one of the first states to adopt this model, which aims to encourage residents to purchase long-term care insurance by offering a significant financial incentive: asset protection.

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Here’s how it works. Normally, to qualify for Medicaid’s long-term care coverage, you need to "spend down" your assets to meet eligibility guidelines (which is around $2,000 in countable assets for an individual). However, if you purchase a state-approved Partnership Policy, you can retain an amount of assets equal to the benefits paid out by your policy and still qualify for Medicaid if you exhaust your policy benefits.

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For example, say your long-term care insurance policy pays out $200,000 in benefits. Under the Partnership Program, you can keep $200,000 in assets and still be eligible for Medicaid—essentially shielding your retirement savings or family home.

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To qualify as a Partnership Policy in Indiana, the insurance product must meet specific requirements. For people under 76 years old, the policy must include automatic compound inflation protection. For those above 76, some form of inflation protection must still be included, but it doesn’t have to be compound. These policies are also portable, meaning if you move to another Partnership Program state, your asset protection may travel with you, depending on that state’s rules.

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It’s a smart way to blend private insurance with public benefits. But remember: not all long-term care policies are Partnership-approved. Always check with the Indiana Department of Insurance or consult a licensed insurance agent who understands the system.

What Does Long-Term Care Insurance Cover in Indiana?

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Many people assume that long-term care insurance only covers nursing homes, but that’s far from the truth—especially in Indiana where state laws promote flexibility in benefits and care options. A well-structured long-term care policy opens up possibilities that align better with your personal needs and preferences.

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Most Indiana long-term care insurance policies cover a range of services including:

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• In-home care: Assistance with daily tasks from certified health aides
• Assisted living facilities: Residential care that offers meals, supervision, and help with medications
• Skilled nursing facilities: More intensive 24-hour care for chronic medical needs
• Adult day healthcare services: Structured daytime programs with medical and social support
• Respite care: Temporary relief for full-time caregivers
• Hospice and end-of-life care: Supportive services in the home, facility, or hospital

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In addition to standard coverage, many policies offer customization options. You can often choose the maximum daily or monthly benefit, how long coverage will last, and whether you want inflation protection to keep benefits in line with rising care costs.

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Inflation protection is particularly important in Indiana. With care costs rising between 2% to 5% annually, a fixed benefit amount may fall short after 10 or 20 years. So, many financial advisors recommend selecting compound inflation protection—even if it increases your premiums. It’s a small price to pay to ensure your future needs are met.

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Also consider the elimination period—the "deductible" of long-term care insurance. This is the number of days you must pay out-of-pocket for care before your insurance kicks in. In Indiana, elimination periods typically range from 30 to 90 days.

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Understanding these components helps you build the most cost-effective and comprehensive plan for your family’s needs. Speak to a trusted insurance advisor and ask how coverage aligns with Indiana's typical care environments and costs.