Long-Term Care Insurance in Texas: Partnership Program, Medicaid, and Protecting Your Savings

Long-term care insurance pays for extended care services when you can no longer perform 2 or more Activities of Daily Living — bathing, dressing, eating, transferring, continence, toileting — or have a severe cognitive impairment such as Alzheimer's. Covered services typically include nursing home care, assisted living facilities, memory care units, home health care, adult day programs, and hospice. In Texas, a private nursing home room averages $75,000–$95,000 per year depending on the city.

The Texas Long-Term Care Partnership Program is a joint initiative between private carriers and Texas Medicaid. It allows Texans who purchase a qualified Partnership LTC policy to protect assets dollar-for-dollar equal to the benefits their policy pays. If your policy pays $200,000 in benefits, Texas Medicaid will not count the first $200,000 of your countable assets when determining eligibility — in addition to the standard Medicaid asset exemptions. This is a powerful incentive to purchase qualified private coverage.

To qualify for Texas Medicaid long-term care benefits (STAR+PLUS), a single applicant must have countable assets of approximately $2,000 or less. Certain assets are exempt — your primary home (if you intend to return), one vehicle, personal belongings, and prepaid funeral arrangements. These limits mean that a lifetime of savings can be rapidly depleted paying for nursing home care before Medicaid begins paying. LTC insurance prevents that spend-down.

Medicare provides very limited skilled nursing facility coverage. After a qualifying hospital stay of 3+ days, Medicare covers days 1–20 in full, then requires a daily copay (approximately $194/day in 2025) for days 21–100, and pays nothing after 100 days. Medicare does not cover custodial care — help with bathing, dressing, or eating — which is what most long-term care involves. Texas residents who plan to rely on Medicare for extended nursing care will find their plan falls well short.

The ideal window for purchasing LTC insurance is ages 50–65. At these ages, you are typically healthy enough to qualify for standard or preferred rates, premiums are substantially lower than at older ages, and you have time for benefits to grow with inflation protection. Waiting until your 70s significantly increases premiums and introduces the risk of a health event that makes you uninsurable. Most financial planners recommend having an LTC conversation no later than your mid-50s.

Yes. Certain life insurance policies include an accelerated death benefit or LTC rider that allows you to access the death benefit while living to pay for qualified LTC expenses. Hybrid life-LTC policies combine a death benefit with an LTC benefit pool — if you need care, benefits pay care costs; if you never need care, a death benefit passes to your heirs. This appeals to Texans who are reluctant to pay standalone LTC premiums for a benefit they may never use.

Inflation protection automatically increases your benefit amount each year to keep pace with rising care costs. Common options are 3% or 5% compound annual increases. For a 55-year-old who may not need care for 25–30 years, inflation protection is critical — a $200/day benefit grows to approximately $430/day at 3% compound over 25 years. Without it, your benefit loses purchasing power substantially. Partnership-qualified policies for buyers under 61 require minimum inflation protection to qualify for asset protection.

Texas is a community property state — most assets acquired during marriage are jointly owned. If one spouse needs long-term care without LTC insurance, community property assets are at risk of spend-down before Medicaid eligibility. The Community Spouse Resource Allowance provides some protection for the healthy spouse, but the limits are relatively low. LTC insurance protects both spouses — benefits pay for the insured's care, and the healthy spouse retains assets rather than spending them down on nursing home costs.

You can verify any insurance producer's license through the Texas Department of Insurance at tdi.texas.gov — search by name or license number. Sasson Emambakhsh holds Texas license #3460699 and is affiliated with Northwestern Mutual. Always verify that an agent is licensed before purchasing any insurance product.