Alabama Long Term Care Partnership Program

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The Alabama Long Term Care Partnership Program is a program which is administered by the Alabama Medicaid Agency in consultation with the Alabama Department of Insurance. Under this program, the individuals who purchase long term care insurance policies that meet all requirements can apply for Medicaid under special rules for determining financial eligibility and estate recoveries.

It has become effective March, 2009. First among its coverage provided is Asset Protection. In accordance to the program, the asset protection or “asset disregard” is applied by disregarding an amount of assets, above and beyond the asset disregard or allowance otherwise provided under the Medicaid plan, equal to the amount of the insurance benefits received from a partnership policy.

But, the asset disregard does not include return of premium payments made upon the termination of a partnership policy since such payments do not represent insurance benefits. And, the eligibility for benefits under Medicaid is also subject to other eligibility requirements, such as applicable income limitations, home equity limitations and other applicable resource restrictions.

Alabama’s partnership program also covers inflation protection. This benefit applies (a) for individuals 61 below, the policy must provide compound annual inflation protection at a rate of not less than three percent and increases at a rate based on changes in the consumer price index; (b) for individuals age 61 but has not yet reached 76, the policy must provide some level of inflation protection; (c) for individuals 76 above, the policy may or may not be required to provide inflation protection.

Moreover, the state’s partnership program requires partnership policies to be qualified under federal tax law. The policy must be a qualified long term care insurance contract which provides insurance benefits on a reimbursement, cash benefit basis, indemnity insurance basis, or on a “per diem or other periodic basis without regard to the expenses incurred during the period to which the payment relates.

Partnership policies are similar to regular long-term care insurance policies except they must include inflation protection to keep up with the rising cost of long term care services, and asset protection, also known as asset disregard.

Also, the policy must cover an insured who is a resident of Alabama. The issue date is the effective date of coverage under the policy. A non-partnership long-term care policy may be exchanged for a Partnership Policy. In terms of policies issued by other states, Alabama’s partnership program recognizes them.

Read more about Alabama long term care partnership program and research various options when preparing for a long term care plan. See what CLASS Act means.

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