Michigan Long-Term Care Insurance

Michigan law includes rate and inflation-protection rules

MCL 500.3926a requires an insurer to give DIFS at least 30 days' notice before it notifies policyholders of a pending premium rate-schedule increase, along with specified actuarial and projection information. For an exceptional increase, the statute requires 70% of the present value of additional premium to be returned to policyholders in benefits (MCL 500.3926a).

MCL 500.3909 says an insurer may not sell an LTC policy without also offering an inflation-protection option meeting one of the stated formulas. The statute also requires graphic comparisons of benefit growth over at least 20 years and potential future premium cost at ages 75 and 85 (MCL 500.3909).

The Partnership feature can protect assets dollar for dollar

MCL 400.112c and DIFS's 2016 bulletin describe Michigan's Long-Term Care Partnership Program. A qualifying certified Partnership Policy allows the holder to protect a dollar of Medicaid-countable assets for every dollar paid by the policy, both in Medicaid eligibility/spend-down and estate recovery (MCL 400.112c; DIFS Bulletin 2016-01-INS).

The statute also preserves the disregard for people who bought a policy before any future program discontinuation. That continuity clause does not affirmatively establish present new-sale availability (MCL 400.112c).

Confirm the current Partnership sales status before purchase

No primary DIFS or MDHHS material in the research file affirmatively states that Michigan Partnership policies are currently open to new sales. The available evidence is the absence of a discontinuation notice, so the program appears to remain available but should be confirmed directly with DIFS and the carrier before a buyer relies on that status (DIFS Bulletin 2016-01-INS; MCL 400.112c).

Compare this carefully hedged status with Florida's long-term-care insurance page, and see Traditional LTC Insurance for the broader insurance framework. Obtain a carrier-specific illustration and policy documents before choosing coverage.

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.