Colorado Long-Term Care Insurance Information

Colorado offers a wide range of services and resources if you need long-term care now—or are planning ahead for future care needs. The state participates in the Long-Term Care Partnership Program, allowing you to purchase qualified Long-Term Care Insurance policies that provide dollar-for-dollar asset protection from future care costs.

In addition, Colorado offers state tax incentives for Long-Term Care Insurance, making coverage more affordable for many residents.

Colorado offers a full spectrum of long-term care services, including:

• Adult day care centers
• Assisted living facilities
• Continuing care retirement communities (CCRCs)
• Home health care and in-home support services
• Memory care for dementia and Alzheimer’s
• Rehabilitation and skilled nursing facilities
• Respite care services
• Traditional nursing homes

Several insurance solutions are available to safeguard income and assets from the rising costs and burdens of aging. Plus, all tax-qualified Long-Term Care Insurance policies in Colorado have various consumer protections in addition to available tax benefits.

Federal Partnership Program

Colorado participates in the federal-state Long-Term Care Partnership Program, a public-private initiative involving insurers, the state Medicaid program, the Division of Insurance, and the Department of Human Services. This program allows you to purchase a qualified Long-Term Care Insurance policy that provides dollar-for-dollar asset protection if you later need Medicaid to help pay for long-term care.

If you exhaust your policy benefits, you may still qualify for Medicaid while retaining assets equal to the benefits paid—helping you preserve more of your savings than standard Medicaid rules typically allow.

Policy Example

This additional asset safeguard is called dollar-for-dollar asset protection. If your Colorado Partnership Long-Term Care policy pays $450,000, for example, that same amount will be disregarded when calculating the spend-down requirements for Medicaid. The Partnership Program also protects those assets after death from Medicaid estate recovery.

Colorado is using this approach to give its citizens greater control over how they finance their long-term care and to help shore up the public safety net against upcoming demographic pressures.

Reciprocity

Most states have reciprocity with other states' long-term-care partnership programs including Colorado. This means if you move from or to Colorado your additional partnership asset protection will be honored.

Medicaid

Colorado’s Medicaid program, Health First Colorado, will pay for long-term care services if you meet eligibility requirements. In 2026, the Medicaid asset limit remains $2,000 for an individual. For married couples, the community spouse may retain between $32,532 and up to $162,660 in countable assets. The minimum monthly maintenance needs allowance for a spouse is $2,643.75. The home equity limit is $1,033,000.

For more information about the Medicaid program visit www.medicaid.gov

Colorado Medicaid Estate Recovery Program

When you receive long-term care services through Health First Colorado, your estate may be subject to recovery under the Medicaid Estate Recovery Program (MERP). Recovery generally applies to probate assets such as your home, bank accounts, and other financial property. The state will not pursue recovery while a spouse is living or force a surviving spouse to leave the home. Colorado enforces a five-year look-back period for asset transfers. If you have a qualified Partnership Long-Term Care Insurance policy, the benefits paid are protected from both Medicaid eligibility limits and estate recovery.

The Colorado Medical Assistance Estate Recovery Program is a federally mandated program that requires the state to recover the cost of care services if assets remain in the estate at the time of death. Health Management Systems is a third-party provider that performs the recovery service on behalf of the state.

Assets subject to recovery will include your home and other real estate, bank accounts, other financial assets, vehicles, cash, and even household goods. Certain assets in trusts are also subject to recovery. Remember, Medicaid (Health First Colorado - Medicaid in Colorado) will provide long-term care services only if you have little or no income and assets. However, the state will never require a living spouse to move out of their home. 

If the deceased does not own assets when they die, there will be nothing to recover.

The state may "look back" up to 60 months before application for Health First Colorado long-term care services to determine when income was reduced and resources were transferred.

If a person had a qualified Partnership Long-Term Care Insurance policy, the total amount of benefits paid by the policy would be sheltered from asset recovery. 

You can learn more here - Health First Colorado Recoveries | Colorado Department of Health Care Policy & Financing

Long-Term Care Costs Rising in Colorado

Colroado has seen rising costs of long-term care services throughout the state. The cost of extended care services is based on the type of services required and where you or a loved one lives. Use the LTC News Cost of Care Calulcator to see the current costs in your zip code,

Denver

Denver is the largest metro area in Colorado. The average skilled nursing facility cost runs around $11,829 a month. Assisted Living averages $5,700 a month plus sur-charges. Adult Day Care Centers average $2,503 a month. Care at home, based on a 44-hour week, averages $6,753 a month.

Remember, assisted living cost estimates are for base costs. These long-term health care facilities will also have surcharges that will be added to the bill based on additional services that the care recipient requires. 

More Locations

Other large population centers in Colorado include Arvada, Aurora, Boulder, Centennial, Colorado Springs, Fort Collins, Greeley, Lakewood, Pueblo, Thornton, and Westminster.

State Resources for Aging and Long-Term Care in Colorado

You don’t have to navigate long-term care alone. Colorado offers a strong network of state agencies, regional programs, and nonprofit organizations designed to help you or a loved one access care, understand benefits, and maintain independence. Many of these services are free or low-cost.

• Colorado Association of Area Agencies on Aging (AAA)  - 303.866.5700

Colorado has 16 Area Agencies on Aging (AAAs) serving communities statewide (updated from older counts).

AAAs are often your first point of contact and can help you:

• Explore long-term care options and plan ahead
• Access in-home services, caregiver support, and adult day programs
• Connect with nutrition programs and transportation services
• Get case management and referrals to Medicaid programs

👉 Many AAA offices also provide local SHIP counseling and ombudsman access.

• Colorado Long-Term Care Ombudsman Program - 303-862-3524

The Ombudsman has training professionals to receive complaints and resolve problems in situations involving quality of care, use of restraints, transfer and discharge, abuse, and other aspects of resident dignity and rights. Ombudsman services are free, confidential, and resident directed.advocates for residents in:

• Nursing homes
• Assisted living residences
• Other long-term care settings

Services include:

• Investigating complaints
• Protecting resident rights
• Resolving care and safety concerns

All services are free and confidential.

• Colorado State Health Insurance Assistance Program - 888-696-7213

Colorado SHIP provides free, unbiased Medicare counseling.

You can get help with:

• Medicare plan comparisons and enrollment
• Understanding what Medicare covers—and does not cover—for long-term care
• Billing issues, appeals, and financial assistance programs

👉 The program also includes the Senior Medicare Patrol (SMP) to help detect fraud and errors.

• Colorado Department of Health Care Policy and Financing - 800-221-3943

This agency administers Health First Colorado (Medicaid) and long-term care programs, including:

• Home- and Community-Based Services (HCBS) waivers
• Nursing home coverage
• In-home support programs

These programs help you remain at home longer and avoid institutional care when possible.

• Colorado In-Home Support Services Program - 800-221-3943

Colorado’s In-Home Support Services (IHSS) program allows Medicaid members to:

• Direct and manage their own care
• Hire caregivers (including family in some cases)
• Receive help with daily activities like bathing, dressing, and housekeeping

A case manager helps coordinate services and ensure proper care.

• Colorado Facility Comparison Tool - 303-692-2,000

The Colorado Department of Public Health and Environment provides a facility comparison tool that allows you to:

• Search nursing homes and assisted living facilities
• Review inspection reports and citations
• Compare quality and compliance history

👉 This is a valuable tool when evaluating care providers.

• Colorado Adult Protective Services - 844-264-5437

Adult Protective Services helps protect vulnerable adults from:

• Abuse
• Neglect
• Exploitation

APS can investigate concerns and arrange emergency services when needed.

Colorado offers a comprehensive network of aging and long-term care resources, including Area Agencies on Aging, Medicaid programs, SHIP counseling, and ombudsman services. These organizations provide free, trusted guidance to help you make informed decisions and maintain independence.

Rate Stability Rules

In addition, Colorado consumers enjoy additional peace-of-mind as the state has adopted Long-Term Care Insurance Rate Stability Rules.  These rules, developed the National Association of Insurance Commissioners, makes it much harder for an insurance company to get an approved rate increase.

Products Approved in Colorado

A variety of affordable products are approved in Colorado for Long-Term Care planning. In addition to the traditional policies, including partnership certified policies, Colorado residents can consider limited duration policies and asset-based “hybrid” plans.

Tax Incentives

Colorado has a state income tax credit equal to the lesser of 25% of premiums paid for an LTC insurance policy, or $150 per policy. Individuals who qualify for the credit are those with federal taxable income less than $50,000 ($100,000 for joint filers claiming credit for 2 policies). The federal tax incentives also apply.

Reverse Mortgages in Colorado

Reverse mortgages are available in Colorado and can be a useful way to access home equity to help fund retirement or long-term care needs.

A reverse mortgage—most commonly a federally insured Home Equity Conversion Mortgage (HECM)—allows you to convert a portion of your home’s equity into tax-free cash. Unlike a traditional loan, you are not required to make monthly mortgage payments. The loan is typically repaid when you sell the home, move out permanently, or pass away.

A reverse mortgage may allow you to:

• Supplement retirement income
• Eliminate an existing mortgage payment
• Pay for in-home care 
• Help fund a Long-Term Care Insurance policy
• Cover medical expenses or daily living costs

To qualify for a reverse mortgage in Colorado:

• You must be age 62 or older
• The home must be your primary residence
• You must have sufficient equity in the home
• You must maintain the property and stay current on property taxes and homeowners insurance
• You must complete HUD-approved counseling before obtaining the loan

👉 The home does not have to be fully paid off, but equity levels will determine how much you can borrow.

The loan balance increases over time, reducing home equity. Reverse mortgages in Colorado can provide a flexible way to convert home equity into income to help pay for long-term care and retirement needs. However, these loans are complex and should be carefully evaluated with a qualified professional as part of your overall financial and long-term care plan.

Learn more about reverse mortgages on LTC News.

LTC Tax

Colorado is one of several states that is considering following the State of Washington in implementing a tax on income for any person who does not own a qualified Long-Term Care Insurance policy. What is unknown is if they implement the tax plan if they will offer any reasonable time for state residents to purchase qualified policies if they do not already own one. 

It is highly recommended to speak with a qualified specialist to consider your options - Work With a Specialist | LTC News

Life Settlements and Viatical Settlements in Colorado

Life settlements and viatical settlements are available in Colorado and can provide a way to help pay for long-term care by converting an existing life insurance policy into cash.

A life settlement allows you to sell your life insurance policy to a licensed third party for a lump sum that is greater than the policy’s cash surrender value but less than the death benefit. The buyer assumes future premium payments and receives the death benefit later.

A viatical settlement is designed for individuals who are terminally or chronically ill, typically with a limited life expectancy. Because of this, viatical settlements often provide higher payouts and faster access to funds.

f you qualify, proceeds can be used to:

• Pay for in-home care, assisted living, or nursing home services
• Cover hospice or palliative care expenses
• Pay for medications, medical equipment, or therapies
• Supplement retirement income or ease financial strain on family

👉 For individuals facing serious illness, viatical settlements can provide immediate financial support to improve comfort and quality of life.

Colorado regulates life and viatical settlements to protect consumers:

• Providers and brokers must be licensed by the state
• Transactions require clear disclosures and informed consent
• There are protections against fraud and unfair practices
• Restrictions generally apply to selling newly issued policies (often within the first two years)

Important Considerations

• Selling your policy will reduce or eliminate the death benefit for your beneficiaries
• Life settlement proceeds may be taxable, depending on your situation
• Viatical settlements are generally tax-free if IRS requirements are met

Life settlements and viatical settlements in Colorado can provide a valuable source of funds to help pay for long-term care, especially in cases of serious or terminal illness. However, because these transactions affect your estate, taxes, and Medicaid planning, it’s important to work with a licensed professional and carefully evaluate your options.

Remember that selling your policy will reduce or eliminate the death benefit for your beneficiaries. Learn more about life settlements/viatical settlements on LTC News.

The information on this page is based on the best available sources.