The federal programs (Medicare Parts A through D, Medigap plan standardization, Medicaid) are covered in the national Senior and Special Needs guide. Alabama's exam adds state rules for Medicare supplement policies (Ala. Code 27-19-50 and following, and Ala. Admin. Code 482-1-071) and long-term care insurance (Ala. Code 27-19-100 and following, and 482-1-091).

Federal backdrop in brief

• Medicare covers people 65 and older and some younger people with disabilities.
• Medigap policies fill gaps in Original Medicare and are standardized into lettered plans.
• The federal Medigap open enrollment period is six months, beginning when a person is both 65 or older and enrolled in Part B.
• Medicaid is needs-based, jointly funded by the federal government and the states, and pays for custodial long-term care for people who qualify. Asset transfers for less than fair value in the 60 months before applying can create a penalty period.

Medicare supplement rules in Alabama

• Outline of coverage. A Medigap policy may not be delivered unless the outline of coverage was given to the applicant at the time of application (27-19-56).
• Free look. The policy must prominently state the right to return it within 30 days of delivery for a premium refund paid directly to the applicant (27-19-57).
• Preexisting conditions. A Medigap policy may not limit benefits for losses incurred more than six months after coverage begins. It also may not define a preexisting condition more broadly than one treated or advised within six months before coverage (27-19-53).
• Replacement. When a Medigap sale replaces another Medigap policy, the applicant must receive the notice regarding replacement required by the NAIC-based rule (482-1-071-.18).

Long-term care insurance in Alabama

Renewability and design.

• An LTC policy may not be cancelled or nonrenewed because of the insured's age or declining mental or physical health (27-19-105).
• It may not cover only skilled nursing care, or give significantly more coverage for skilled care than for lower levels of care.
• It may not make benefits depend on a prior hospitalization. A rider requiring prior institutional care for noninstitutional benefits can't require a stay of more than 30 days.

Preexisting conditions. A preexisting condition can be defined only as one treated or advised within six months before coverage. It may be excluded only for losses beginning within six months after coverage starts (27-19-105(c)).

Free look. An LTC applicant may return the policy within 30 days of delivery for a full premium refund (27-19-105(f)).

Contestability (27-19-106):

No field issue. An LTC policy may not be field issued, meaning issued by an agent or administrator under delegated underwriting authority based on the applicant's health (27-19-106(d)).

Nonforfeiture. The insurer must offer a nonforfeiture benefit. If the applicant declines it, a contingent benefit upon lapse applies after a substantial rate increase (27-19-107).

Producer training. LTC sellers complete a one-time 8-hour LTC course, then 4 hours of LTC training for each later renewal period. The general CE exemptions don't apply to this requirement (482-1-091-.32).

Key numbers

Common exam traps

• The Medigap outline of coverage is due at application, not at delivery.
• The free look for Medigap and LTC is 30 days. The 10-day free look applies to individual health policies.
• An LTC policy can't be field issued in Alabama.
• An LTC policy can't require a prior hospital stay, and can't cover only skilled care.
• After two years, LTC coverage can be contested only for knowing and intentional misrepresentation.