Maine Long-Term Care Insurance

The Maine Long-Term Care Partnership is active in the official materials

Maine’s Bureau says a qualifying Partnership policy gives increased protection from income and asset spend-down for MaineCare. When MaineCare determines eligibility, it will not count assets equal to the benefits paid under a qualifying policy; the Bureau’s example says a policy that pays $50,000 allows MaineCare to disregard $50,000 of assets (Maine Bureau of Insurance LTC guide).

The state maintains a list of individual policies and group certificates approved for use in the Partnership Program, updated July 24, 2024. That list includes an approval dated July 7, 2023, so the program is not presented as a closed legacy-only framework; actual new-policy availability must still be confirmed with the insurer or licensed agent (Maine Partnership approved policies).

Partnership protection is not a complete plan

Maine’s estate-recovery statute recognizes a claim where a recipient received or was entitled to long-term-care insurance benefits connected to an asset/resource disregard and MaineCare paid nursing-facility or other long-term-care services. The statute therefore needs to be read with the policy, the amount of benefits actually paid, and the client’s estate plan (Maine Title 22 §14).

The Bureau advises consumers to discuss whether a Partnership policy is appropriate with their agent, and it identifies age, health, retirement goals, income, and assets as relevant purchase considerations (Maine Bureau of Insurance LTC guide).

Verify the exact policy before buying or relying on it

Ask whether the exact policy form is approved for Maine Partnership use, whether it is available for new sale, what inflation protection and benefit triggers apply, and how benefits coordinate with MaineCare. Do not assume another state’s Partnership rules or an older Maine policy apply unchanged.

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).

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.