Short answer: If someone with an approved Partnership policy uses its benefits and later applies for Medicaid long-term care, Texas disregards assets equal to the benefits the policy paid, dollar for dollar. Those protected assets are also ignored in later estate recovery.
The Partnership for Long-Term Care program is run by the Texas Health and Human Services Commission with the Texas Department of Insurance. Each dollar a Partnership policy pays out in benefits lets the policyholder keep a dollar of otherwise countable assets above Medicaid’s normal resource limit when applying for long-term care Medicaid.
By statute, Texas may not count those disregarded resources in determining Medicaid eligibility, the amount of assistance, or any later recovery from the person’s estate. A person can apply for Medicaid before the policy is exhausted, but Medicaid will not pay for services the policy covers until the policy benefits are used up.
The protection is for assets, not income; the person must still meet Medicaid’s other rules. If the program were ever discontinued, people who bought approved policies beforehand keep the protection. Medicaid planning involves legal and tax questions, so pair this with an elder law attorney for any specific plan.