What the public materials establish about sales
The Insurance Department has a page titled “Companies Approved To Offer Partnership Policies.” It says Rule 13 and Rule 94 establish insurer requirements, that forms must be filed before marketing Partnership-qualified policies, and that approved companies will be posted as forms are approved (Arkansas Insurance Department approved Partnership companies).
Those materials support an active regulatory framework rather than a stated closed or legacy-only program. The public page reviewed does not display a current carrier list or expressly say a qualifying policy is available for sale today, so confirm a carrier's current Arkansas approval and policy status before purchase (Arkansas Insurance Department approved Partnership companies).
Insurance and Medicaid are separate calculations
DHS policy says long-term-care insurance payments are not considered in the eligibility process but are counted toward cost of care, whether paid to the facility or directly to the recipient. The policy treatment of an actual policy and the Partnership asset disregard should be reviewed together, not assumed from a sales brochure (DHS Medical Services Policy Manual, H-410).
DHS's estate-recovery guide also says assets disregarded under a Qualified Long-Term-Care Partnership Policy that remain at the policyholder's death are exempt from estate recovery, while assets not disregarded through such a policy are subject to recovery under the guide's description (DHS Medicaid Estate Recovery Guide).
Compare the policy, not only the label
A buyer should obtain the actual policy and verify whether it is Partnership-qualified in Arkansas, the daily or monthly benefit, benefit period, elimination period, inflation terms, covered settings, exclusions, premium history, and insurer licensing. Those are contract-specific features and cannot be inferred from the word “Partnership.”
The Insurance Department's Partnership description makes the later Medicaid disregard contingent on meeting Medicaid's income and other eligibility rules. Arkansas's $2,982 LTSS income cap and other eligibility rules remain relevant even when a policy has paid benefits (Arkansas Insurance Department Partnership overview; DHS 2026 Medicaid Quick Reference Chart).
Regulator: Arkansas Insurance Department.
Partnership effect: Medicaid disregards assets equal to qualifying policy benefits paid, if other Medicaid requirements are met.
Sales status: the public materials show an approval framework but require current carrier confirmation (
Arkansas Insurance Department).
Keep the evidence of qualification
Retain the Partnership disclosure, policy schedule, benefit-payment statements, premium history, and any insurer confirmation of Arkansas qualification. Those documents can be important if Medicaid asset treatment or estate-recovery protection is later requested.
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).
Arkansas state incentive: Arkansas permits the same premium deduction allowed for federal purposes, effectively mirroring the age-based federal limits above on the state return (
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.
