Navigating Long-Term Care in Alabama

Alabama participates in the long-term care partnership program. Qualified LTC Insurance policies are available, providing dollar-for-dollar asset protection. 

Quality care options are available statewide, and several insurance solutions are available. However, rapidly increasing costs for care services throughout Alabama are becoming burdensome on residents and their families for those who do not have Long-Term Care Insurance.

The variety of quality care options available in Alabama for those who require long-term health care services include:

• adult day care centers
• assisted living facilities
• continuing care retirement communities
• home health care providers
• memory care facilities
• rehabilitation facilities
• traditional nursing homes

Top insurance companies have several insurance options to help residents safeguard income and assets, protect lifestyles, and preserve a legacy. Plus, policyholders will have access to quality care options giving loved ones the time to be family instead of caregivers.

Federal Partnership Program

Alabama participates in the federal/state partnership program. This program provides additional asset protection. In the event that you exhaust your benefits from a qualified Alabama Partnership Long-Term Care policy, the state will provide you dollar-for-dollar asset protection. This would allow you to qualify for Medicaid long-term care benefits while retaining more of your assets than what Medicaid would typically allow.

Policy Example

This means even a small qualified long-term care insurance policy can have powerful asset protection. For example, if the policy paid $150,000 in benefits that same amount will be “disregarded” from the spend-down requirements. For many, this can protect a large part of their estate. This means you would be allowed to keep the amount your policy paid in benefits in addition to the Medicaid allowable amount and still qualify for the Medicaid Long-Term Care benefit. The Partnership Program also protects those assets after death from Medicaid estate recovery.

Reciprocity

Most states have reciprocity with other states' long-term-care partnership programs including Alabama. This means if you move from or to Alabama your partnership asset protection follows you as well.

Medicaid

The Alabama Medicaid program will pay for long-term health care if an individual has little or no income and assets. The Long-Term Care Medicaid spend down is $2,000. A spouse’s minimum asset allowance is a minimum of $27,480 up to a maximum of one-half of countable assets up to $137,400. Your spouse’s minimum monthly income allowance is $2,177.50 * The home equity limit is $636,000.

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

Alabama Medicaid Estate Recovery Program

When a person applies for Medicaid and requires long-term services and supports, their estate will be subject to the Medicaid Estate Recovery Program, otherwise known as MERP.

Under the Alabama Estate Recovery Program, the assets subject to recovery will include your home and other real estate, bank accounts and other financial assets, vehicles, cash, and even household goods.  

Remember, Medicaid 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. 

Once the person receiving Medicaid long-term care services dies, Alabama law (Act 2019-489) requires that notice be provided to the Alabama Medicaid Agency at the commencement of a probate proceeding and bar payments of claims before the state determines the amount of recovery to be required. 

The state may "look back" up to 60 months before application for Medicaid 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. 

State Resources for Aging and Long-Term Care in Alabama

There are a variety of state resources available to help residents and their families with issues of aging and long-term health care. Many of these services benefit low-income families. 

• Alabama Area Agencies on Aging - 800-243-5463

Eleven agencies across Alabama help older people with available resources. The agency offers information and referrals on long-term care planning, nursing home care, and access to available government benefits.

• Alabama Long-Term Care Ombudsman - 334-242-5753

The Alabama Long-Term Care Ombudsman assists those living in long-term care facilities and advocates for them when necessary. The Ombudsman's office can assist care recipients and their families when they have concerns with the day-to-day care provided in long-term care facilities, including health and safety matters. 

The agency's role is to resolve problems, protect rights, and ensure fair treatment and quality care. The Ombudsman also partners with the Alabama Medicaid Agency to support "Gateway to Community Living." The program assists eligible residents in transitioning from long-term care facilities back into the community.

• Alabama State Health Insurance Assistance Program - 334-242-5743

The State Health Insurance Assistance Program (SHIP) helps all Medicare-eligible individuals obtain accurate and objective health insurance information to assist state residents in making informed health coverage decisions. SHIP counseling also helps individuals understand their rights and protections under their Medicare coverage.

Products Approved in Alabama

A variety of affordable products are approved in Alabama for Long-Term Care Insurance planning including traditional partnership certified plans, limited-duration plans, and asset-based or “hybrid” plans.

Rate Stability Rules

In addition, Alabama 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.

Tax Incentives

A state tax deduction is available for Alabama residents. Premiums paid for a Long-Term Care Insurance policy can be deducted pursuant to Section 40-18-15 of the state tax code. There are several requirements which most Long-Term Care insurance policies meet. Federal tax incentives also may apply.

Reverse Mortgages in Alabama

Reverse mortgages are available in Alabama. A reverse mortgage is a home equity loan where the borrower does not have to make payments.

This type of mortgage can increase monthly income, eliminate mortgage payments, and even fund Long-Term Care Insurance. However, there are many rules in Alabama on these products, and you should seek the help of a qualified and licensed mortgage broker. 

If you have significant equity in your home and you and your spouse are at least 62 years old, you can get a reverse mortgage to turn your equity into funding long-term health care, pay for an LTC Insurance policy, pay bills and add to your retirement lifestyle.

The home must be the principal residence without any tax liens. 

Learn more about reverse mortgages by clicking here.