Long term care insurance can be a blessing when services are needed to care for a senior.  Depending on the policy, benefits may be provided for home health care, assisted living care, and/or care in a skilled nursing facility.  The insurance can provide the senior and his or her family with assurance and comfort that the senior will get necessary care without being forced to liquidate assets.  However, policies can be as varied as ice cream flavors (which seem to multiply by 100 at least every day).  This means individuals shopping for long term care insurance must be very alert and cautious when selecting a policy. Fortunately, many states, including Alabama, have created a program to reduce the confusion in selecting a policy.

In 2005, federal law authorized the states to create long term care insurance partnership programs. Essentially, a long term care insurance policy that is part of the partnership program is one that has been reviewed and approved by the state as a plan that will allow for certain assets to be disregarded when applying for Medicaid benefits for long term care.

Any approved policies must include annual compound inflation protection for persons under 61 years of age. The policies must also provide some form of inflation protection for persons between 61 and 76 years of age.  Inflation protection is very important as the cost of nursing home care increases.

Without inflation protection, a person that purchased a policy promising to pay benefits of $86 dollars per day for nursing home care in 1992, is left with the burden of paying an additional $54 to $105 per day out of pocket since the average cost per day in a nursing home can be approximately $140 to $190 per day (please note, the cost of nursing home care varies widely).

The State of Alabama has a list of companies providing approved long term care partnership plans. This list can be found at: www.aldoi.gov/Consumers/LongTermPartnership.  

Please note that just because a company is on this list does not mean that all policies offered by the company are partnership policies. Further, just because a policy is not a partnership policy does not mean it an inferior policy.  However, it does mean that the policy has been reviewed and approved by Alabama Medicaid Agency and the Alabama Department of Insurance as meeting legal requirements for long term care policies in Alabama. As with all things, you will need to exercise caution in reviewing and choosing a policy.

Editor’s Note: Melanie B. Bradford is an attorney located in Scottsboro, Alabama at 803 Garland Ferry Road at the intersection of Veterans Drive and Garland Ferry near The Daily Sentinel. Her phone number is 256-259-3301. The Alabama State Bar requires any communication that may be interpreted as an ad to state: “No representation is made about the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.”

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