The Illinois Department of Insurance (IDOI) regulates long-term-care insurance in the state. Producers who sell or solicit these policies need a Health line-of-authority license, an eight-hour Partnership certification course, and ongoing training to keep that certification current at renewal.
Illinois's Partnership program is still open, and it offers eligibility asset protection for policyholders — though it's important to understand that Partnership protection covers Medicaid eligibility, not estate-recovery exposure, so the two shouldn't be confused. Policy filings in the state fall under 50 Illinois Administrative Code Part 2012, with section 2012.145 specifically governing Partnership policies.
Does Illinois have a Long-Term Care Partnership program?
Yes. Illinois takes part in the Long-Term Care Partnership program created by the federal Deficit Reduction Act of 2005 (DRA). DRA Partnership states follow consumer-protection standards drawn from the National Association of Insurance Commissioners (NAIC) Long-Term Care Insurance Model Act and Model Regulation. A Partnership-qualified policy gives you dollar-for-dollar asset protection: for every dollar the policy pays in benefits, Illinois Medicaid can disregard a dollar of your assets when it decides eligibility, and the same amount is protected from estate recovery after death.
How the protection works (illustrative): if a Partnership policy pays $200,000 in benefits before you apply for Medicaid, Medicaid can disregard $200,000 of your assets on top of the state's regular asset limit, and that same amount is protected from Medicaid estate recovery later.
What makes a policy Partnership-qualified
- It's a tax-qualified long-term care policy under Internal Revenue Code § 7702B.
- It meets the state's Partnership consumer-protection standards and is issued while you're a resident of a Partnership state (each state sets its own start date and residency rule).
- It carries the required inflation protection for your age when you buy: compound annual protection if you're under 61, some level of protection from 61 through 75, and optional protection at 76 or older.
If you move to another state
Illinois law (215 ILCS 132/20) directs the state to follow the federal Deficit Reduction Act rules on reciprocity with other Partnership states. In general, that means a Partnership policy bought in another reciprocal state keeps its dollar-for-dollar protection in Illinois, and an Illinois policy keeps it in other reciprocal states. Confirm with the Illinois Department of Healthcare and Family Services before you rely on it.
The original four: California, Connecticut, Indiana and New York started their Partnership programs before the Deficit Reduction Act of 2005. Their programs were designed separately from the NAIC-based DRA model, so their rules differ (for example, some offered Total Asset protection), and California doesn't take part in reciprocity. If you bought a policy in one of these states, confirm how it's treated with the Medicaid agency where you'll apply.
Not every insurer offers Partnership-qualified policies in every state. When you compare quotes, ask whether each policy is Partnership-qualified in Illinois.
Sources and official resources
- Illinois Department of Insurance: Long-Term Care Insurance
- Illinois Compiled Statutes: 215 ILCS 132, Illinois Long-Term Care Partnership Program Act
- Illinois Administrative Code: Section 2012.145, Long-Term Care Insurance Partnership Program
- Illinois HFS: Long Term Care
- New York State Partnership for Long-Term Care: State Partnership Programs and Reciprocity map
- U.S. Code: 42 U.S.C. § 1396p (liens, estate recovery, transfers of assets, Partnership disregard)
Rules and figures change. Confirm current details with the agency before you act.