The North Dakota Partnership Program is described as active
The Insurance Department's Partnership Program page says the Long-term Care Partnership Program offers Medicaid asset protection to consumers who buy policies satisfying the federal Deficit Reduction Act requirements. It says that benefits paid under a qualifying policy can shelter an equal amount of assets for Medicaid eligibility. The same official page says only policies issued after January 1, 2007, the effective date of North Dakota's Medicaid Plan Amendment, are eligible. That public description indicates an open program rather than a closed legacy-only arrangement, though a buyer must confirm that a specific current policy is Partnership-qualified before purchase (North Dakota LTC Partnership Program).
HHS's Partnership fact sheet adds that protected assets are not counted for Medicaid financial eligibility and are not subsequently subject to Medicaid estate recovery, absent fraud or an overpayment due. This is dollar-for-dollar asset protection tied to benefits paid under a qualifying policy; it is not a waiver of medical need, transfer rules, policy premiums, or every estate creditor claim (North Dakota HHS Partnership fact sheet).
Connect insurance to the Medicaid plan carefully
North Dakota's regular long-term-care Medicaid rules still use resource limits, client share, functional need, and a five-year review for disqualifying transfers. A Partnership policy can change the resource side only to the extent and under the conditions the state recognizes. Keep the original policy, Partnership disclosure, benefit-payment records, and any correspondence showing qualification, because those documents may be needed if a later Medicaid application is made (North Dakota HHS eligibility; ND Medicaid transfer fact sheet).
Before buying, confirm the carrier's current approval, the policy's written Partnership status, benefit triggers, inflation protection, premium schedule, and how the projected benefits fit the household's broader long-term-care plan.
Federal Tax Incentives for LTC Insurance Premiums (2026)
Beyond any state-level benefit, a tax-qualified LTC insurance contract (one meeting IRC § 7702B)
carries several federal tax benefits, and a number of the relevant limits increased for 2026:
- Age-based premium deduction: eligible premiums count as a medical expense on
Schedule A (to the extent total unreimbursed medical expenses exceed 7.5% of AGI), up to 2026 limits
of $500 (age 40 or younger), $930 (41–50), $1,860 (51–60), $4,960 (61–70), and $6,200
(over 70) — all increased from 2025 (IRS Revenue Procedure 2025-32, § 4.27).
- Self-employed and business deductions: self-employed individuals can deduct 100%
of eligible premiums up to the same age-based limits without itemizing, and C-corporations can generally
deduct LTC premiums paid for employees as an ordinary business expense under IRC § 162, uncapped by
the individual age-based limits.
- Tax-free benefits: benefits from a tax-qualified contract are generally excluded
from income under IRC § 7702B(d); per-diem/indemnity contracts are tax-free up to $430/day (about
$13,079/month) for 2026 (IRS Revenue Procedure 2025-32, § 4.62).
- HSA-funded premiums: HSA funds can be withdrawn tax-free to pay eligible LTC
premiums, up to the same age-based limits above.
- New for 2026 — penalty-free retirement withdrawals: SECURE 2.0 Act § 334
lets eligible 401(k), 403(b), and governmental 457(b) participants under 59½ withdraw funds to pay
premiums on a certified LTC contract without the usual 10% early-withdrawal penalty, up to the least of
the actual premium paid, 10% of the vested account balance, or a statutory cap of $2,600 for 2026. The
distribution itself is still fully taxable as ordinary income and is not available from IRAs
(IRS Notice 2026-33).
North Dakota state incentive: North Dakota offers a credit equal to premiums paid, capped at $250/year, for residents with a North Dakota Partnership-qualified plan — on top of the federal incentives above (
Got LTCi, State Tax Incentives).
State tax rules change frequently and the credit/deduction summary above is not exhaustive —
confirm current eligibility, forms, and amounts with your state department of revenue or a tax
professional before relying on any figure here.
Not mutually exclusive. Most families combine two or three funding pillars — this one rarely stands alone.
The
Journey Assessment ranks all ten pillars against your specific situation and
recommends the top three.
