Washington’s Partnership program is active
Washington’s LTC Partnership program is effective December 1, 2011. Its governing Medicaid rule says people who purchase qualified Partnership policies may apply for LTC Medicaid under special financial-eligibility rules (WAC 182-513-1400).
The core protection is dollar-for-dollar asset disregard: assets may be protected up to the amount of insurance benefits paid by the qualifying Partnership policy. The rule says those protected assets are not taken into account for LTC Medicaid financial eligibility and are not subsequently subject to estate recovery for covered Medicaid and long-term-care services (WAC 182-513-1400).
What a Partnership policy does not do
Partnership protection does not eliminate every Apple Health question. Functional eligibility, income rules, transfer rules, service setting, reporting requirements, and policy qualifications still apply. Washington’s ordinary SSI-related LTC resource rule explicitly recognizes that a qualified Partnership policy may produce a higher resource standard based on benefits paid (WAC 182-513-1350).
It also does not make every long-term-care policy a Partnership policy. The Washington rule and OIC program materials should be used to confirm carrier certification, benefit payments, inflation-protection requirements where applicable, and documentation before relying on asset protection (WAC 182-513-1400; Washington Office of the Insurance Commissioner LTC page).
Compare this with the state’s public program rules
For a person without qualifying Partnership protection, Washington’s base SSI-related LTC resource standards are $2,000 for a single person or institutionalized spouse and $3,000 for a legally married couple, subject to the community-spouse rules. CMS’s 2026 community-spouse range is $32,532 to $162,660 (WAC 182-513-1350; CMS 2026 SSI and spousal-impoverishment standards).
Washington LTC Partnership: active, effective December 1, 2011, and designed to protect assets up to qualified policy benefits paid from LTC Medicaid resource testing and later estate recovery (
WAC 182-513-1400).
Before purchase or application, obtain the current outline of coverage, confirm that a proposed policy is Partnership-qualified, and assess the carrier, benefits, inflation features, premium sustainability, elimination period, and how benefits coordinate with the Apple Health 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).
Washington state incentive: Washington has no state income tax and offers no separate credit or deduction for LTC insurance premiums — only the federal incentives above apply (
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.
