Long Term Care

Standards for Provisions

- A Medicare supplement policy cannot offer benefits that duplicate the benefits Medicare provides. - A Medicare supplement policy cannot define a pre-existing condition more restrictively than a condition for which medical advice was given or treatment recommended by or received from a doctor within six months before the effective date of coverage. A policy cannot exclude or limit benefits on the basis of a pre-existing condition if the loss incurred more than six months before the effective date of coverage.

Initial Enrollment Period

- A person can enroll in Medicare up to three months before or up to three months after the month the person first becomes eligible for Medicare. For those who are not disabled this is at age 65. The initial enrollment period (IEP) is a seven-month period that includes the month in which the recipient turns 65. - Enrollment may be deferred while a person has primary coverage under an employer's health plan, due to the person remaining employed at age 65. A person can also defer enrollment without a penalty while covered by an employer-sponsored health plan.

Paying for Medicare

- Although Medicare eligibility begins at age 65, Medicare Part A coverage is available without a premium only for those who have reached their Social Security full retirement age (66 and eventually rising to 67). - Those who defer Social Security retirement are eligible for free Part A coverage at age 65, even if they have not reached their full retirement age. Enrollment is not automatic, however, so they must act to enroll. - Parts B, C, and D have monthly premiums that may be deducted automatically from one's Social Security retirement benefits.

Part A Deductibles and Coinsurance

- Before Medicare Part A pays benefits, the Medicare beneficiary must pay a deductible at the beginning of each benefit period. That deductible increases each year. The Part A hospitalization benefit period, deductible, and coinsurance look like this: - Days 1-60: All eligible hospital costs are covered after the beneficiary pays a deductible ($1,408 in 2020). - Days 61-90: Beneficiary pays a daily coinsurance ($352 in 2020); Medicare pays the daily balance. - 60-day lifetime reserve: Beneficiary pays a daily coinsurance ($704 in 2020); Medicare pays the daily balance.

community spouse resource allowance (CSRA)

- If a person is married and only one spouse needs long-term care, the Medicare-Aid rules allow the at-home spouse to keep a certain amount of the couple's combined community and separate property. - If a person is married and only one spouse needs long-term care, North Carolina's Medicare-Aid rules allow the at-home spouse to keep a certain amount of the couple's combined community and separate property known as the community spouse resource allowance. In 2011, this amount is $109,560.

spending down

- If an applicant's assets exceed certain limits, the applicant must deplete them before becoming eligible - The concept of spending down is especially significant with respect to long-term care. Even those with moderate financial means may find it impossible to pay for necessary long-term care without turning to Medicaid but qualifying for it requires that they spend down a significant amount of their assets.

Part B Monthly Premium

- If an individual does not sign up for Part B during his or her initial enrollment period the monthly Part B premium is increased. The increase—also referred to as a "premium surcharge"—is 10 percent for each full 12-month period beyond the initial enrollment date. The surcharge will have to be paid as long as the individual's Part B coverage is in effect.

Qualified Medicare Beneficiary (QMB)

- In North Carolina and other states, the state Medicaid program must provide supplementary assistance to low-income Medicare beneficiaries who are enrolled in Part A. - pays for the Part A deductible, Part B premium, Part A and B deductibles, and Part A and B co-payments.

Part A Skilled Nursing Facility Coverage

- It pays the full cost for care in a skilled nursing facility for the first 20 days. Coverage continues beyond the first 20 days, but the patient then pays a coinsurance amount ($176 per day in 2020). Medicare benefits are not available for skilled nursing facility care that extends beyond 100 days. - required to be immediately preceded by an inpatient hospital stay of at least three days. - distinctly different from long-term care or custodial care. Skilled nursing care means the patient needs services that only a trained medical professional can perform

Part C

- Medicare Advantage - is a managed care plan alternative to Original Medicare. Provided through commercial insurance companies, this comprehensive plan combines the coverage of Parts A and B and delivers it like a PPO.

Part A Eligibility

- Most people who are fully insured (with at least 40 quarters of coverage, or work credits) under Social Security are automatically enrolled in Part A. They pay no premium for Part A coverage. Coverage begins the first day of the month in which they turn 65 years old. - Those who are not automatically enrolled can enroll during the seven-month period that begins three months before they turn age 65, includes the month of their birthday, and ends three months after their birthday. Persons who are not fully insured (with at least 40 quarters of coverage, or work credits) under Social Security pay a premium for Medicare Part A coverage: - Those with 30-39 quarters of coverage pay $252 every month (in 2020). - Those with 0-29 quarters of coverage pay $458 every month (in 2020).

Part B Premiums and Deductibles

- Part B requires a monthly premium based on the insured's annual income. - The insured must also pay an annual deductible ($198 in 2020). Then Part B pays 80 percent of Medicare-approved health care charges - Medicare beneficiaries submit deductible and coinsurance payments directly to the provider. The provider bills Medicare for its portion of the charges, and Medicare reimburses the provider.

Part D: Prescription Drug Insurance

- Part D requires a monthly premium that varies from plan to plan. These plans may involve an annual deductible and usually require a coinsurance payment. - Most Medicare drug plans have a coverage gap (the Medicare "donut hole") that requires the beneficiary to pay all drug costs after the beneficiary and the plan have spent a certain amount for covered drugs during the year. Once the beneficiary reaches the plan's out-of-pocket limit during the coverage gap, coverage resumes. For the rest of the calendar year, the beneficiary pays a small coinsurance amount for prescription drugs.

Medicare Coverage Overview

- Parts A and B, called "Original Medicare," together provide complete medical coverage. They require deductibles and coinsurance, just like a reimbursement insurance policy. - Parts C and D are recent additions to Medicare. They offer a managed care plan option (Part C) and a prescription drug program (Part D).

Core Benefits

- Plan A contains the basic core benefits of Medigap insurance. The other plans add benefits to Plan A's core benefits. The core benefits are: - Part A hospital coinsurance - additional Part A hospital benefits - 365 additional days of inpatient hospital care after depletion of the Original Medicare hospital benefits - Part B coinsurance after the annual deductible is met - Parts A and B blood coverage for the first three pints of blood per calendar year

Nonqualified Policies

- Policies that do not meet HIPAA's requirements - Under a nonqualified long-term care policy, benefit payments may be triggered by medical necessity

Annual Election Period

- Qualified individuals who want to change Medicare Advantage plans, switch from a traditional Medicare plan to a Medicare Advantage plan, or change Part D prescription drug plans may do so during an annual election period (AEP), sometimes called the open enrollment period. The AEP runs from October 15 through December 7; new coverage becomes effective the following January 1. - Those who want to switch from a Medicare Advantage plan to Original Medicare may do so during a special disenrollment period that runs from January 1 through February 14 each year.

The Need for LTC Insurance

- The annual costs for long-term care services are expensive everywhere. Depending on the type of service rendered, the annual median cost in the United States ranges from about $20,000 to over $100,000. LTC insurance helps seniors by giving them: - the freedom to choose where they receive their long-term care - assurance that they will not have to spend down their assets to qualify for benefits

Part A Benefits for Hospice Care

- The benefit period for hospice care begins with two consecutive 90-day periods and may continue with an unlimited number of 60-day extensions. Each benefit period can be extended if the beneficiary is recertified as terminally ill. - The hospice benefit has no deductibles. Medicare pays reasonable costs of hospice care.

Inflation Protection

- The cost of long-term care continues to increase. Inflation protection is therefore an important option in LTC policies. Agents are required to tell prospective policyowners that this option is available. - Because inflation protection increases benefits to keep pace with inflation, federal law makes it automatic in a policy unless the buyer rejects it in writing. (Applicants indicate this rejection on the application.) Insureds have two options for inflation protection: - Simple inflation protection: increases the original benefit on a simple interest basis, usually by 5 percent per year. This option is recommended for insureds in their 60s or older. - Compound inflation protection: increases the original benefit on a compound interest basis, usually by 5 percent per year. This option is recommended for insureds younger than age 60.

Standard Plans

- There are ten standard Medicare supplement plans, labeled "A" through "N." Each plan offers different benefits. These benefits increase as plans advance from A to N. - (Four older plans—E, H, I, and J—were discontinued in 2010, though persons who had these plans in effect at that time can continue them. Plans M and N became available in 2010.) - All insurance companies selling Medicare supplement policies must sell Plan A and either Plan C or Plan F. They may sell any of the other plans, too.

Creditable Coverage

- Those eligible for Medicare Part D but covered by their employer's group health plans may decline Medicare Part D. To later add Part D coverage, they may have to pay a late enrollment penalty. - No penalties are assessed if the group plan provides creditable coverage (the employer's drug coverage is at least comparable to Medicare Part D coverage). If the employer's health plan does not provide creditable coverage, individuals must enroll in Part D when they become eligible to avoid the late enrollment penalties.

Medicare Enrollment

- Those who apply for Social Security retirement benefits at age 65 are automatically enrolled in Medicare Parts A and B. - Part B requires a monthly premium. Those who do not want Part B coverage must contact the Social Security Administration to opt out. When they become eligible for Original Medicare (Parts A and B), enrollees may instead choose Part C (Medicare Advantage) coverage. - A person who wants to enroll in Medicare at age 65 but defers Social Security retirement benefits must take steps to enroll in Medicare. This is because Medicare enrollment is not automatic if done before a person applies for Social Security retirement benefits.

Specified Low-Income Medicare Beneficiary (SLMB)

- To be considered a Specified Low-Income Medicare Beneficiary (SLMB), a person must be enrolled in Medicare Part A and must have household income that is between 100 and 120 percent of the federal poverty level. - For those individuals who qualify as SLMBs, Medicare-Aid will pay for their monthly Medicare Part B premiums.

North Carolina Long-Term Care Partnership

- To encourage more people to purchase long-term care coverage - The program involves a public-private partnership between the state and private insurance companies that is designed to reduce Medicaid expenditures by eliminating or delaying the need for people to rely on Medicaid to pay for long-term care expenses. Through the Partnership program, individuals buy private long-term care insurance partnership policies, and when long-term care is needed, the partnership policy will pay benefits first. If additional long-term care assistance is required after the policy's benefits have been exhausted, a policyholder may then qualify for Medicaid under special eligibility rules.

Part D

- adds prescription drug coverage to Medicare Parts A and B. It is provided through Medicare-approved commercial insurers.

Medicare assignment

- agreement between a health care provider and Medicare. Participating Medicare providers agree to charge no more than Medicare-approved amounts for specific treatments and services. - limiting charge: Health-care providers who do not accept assignment are not permitted to charge a Medicare beneficiary an amount that is greater than 15 percent above the Medicare-approved charge.

Part B Gaps:

- annual deductible - 20 percent coinsurance - charges above the Medicare-approved amount

Benefit Periods and Benefit Amounts

- benefit amount: the dollar amount that will be paid for qualifying care, typically expressed as a daily amount - benefit period: the length of time for which benefits will be paid - Common benefit periods are two to five years, though some policies offer lifetime benefits. Benefit amounts are normally flat daily amounts, such as $50, $100, or $200 a day. - The policyowner chooses the benefit period and daily benefit amount when applying for the policy. The owner also selects the elimination period, which may be 0 to 365 days. The longer the benefit period and the larger the benefit amount, the higher the premium

medical savings account (MSA)

- combination of a high-deductible health-care coverage plan and a medical savings bank account.

Long Term Care Policy Coverage

- comprehensive policies: that provide benefits for services at all levels of institutional, home, and community-based care - facility-only policies: that limit coverage to care in institutional settings - home care-only policies: that limit coverage to care in the insured's home or care in the community

Part A Benefit Period

- covers eligible hospital costs for up to 90 days in any single benefit period. A benefit period ends 60 days after release from the hospital. If a subsequent hospitalization benefit period is separated by at least 60 days from the previous period, a new 90-day benefit period will apply for the subsequent hospitalization. - There is no limit to the number of 90-day benefit periods available to Medicare beneficiaries. - Medicare beneficiaries have an additional reserve of 60 days. If any single hospitalization benefit period exceeds 90 days, the patient may tap into this reserve.

Medicaid Eligibility

- disability or age (at least 65 years) - income limitations - asset limitations While each state sets its own rules for Medicaid eligibility, all provide coverage for: - children in families earning less than the federal poverty level (eligible for CHIP) - pregnant women with family incomes below a certain federal level - people who are blind or disabled with income below a certain federal level - people who are at least age 65 and whose income and financial resources are below their state's qualifying limit

Medicare

- federal health insurance program, administered by the Centers for Medicare & Medicaid Services (CMS), for people age 65 and older and for certain disabled individuals. Medicare is a Social Security program that covers medical expenses for qualified individuals. Like Social Security, Medicare is funded primarily by payroll taxes. - Health care providers bill Medicare directly for services rendered to Medicare patients, so patients do not submit claim forms. Medicare benefits are paid directly to the health care provider. In this way Medicare functions like a preferred provider organization (PPO).

Inflation Protection

- guaranteed purchase option: which allows policyholders to periodically buy additional coverage - annual benefit inflation option: which automatically increases a policy's benefits every year on a compound or simple interest basis.

Part A

- hospital insurance - covers inpatient hospital care, skilled nursing home care, post-hospital home health care, and hospice care.

Guarantee of Insurability

- lets the policyowner increase the daily benefit without additional underwriting, regardless of the policyowner's health. This option is available every two or three years, depending on the contract. - If the option is exercised, the premium increases based on the insured's age when the option is exercised.

Medicare SELECT

- managed care plan. Insureds receive their care exclusively from the plan's network of providers. Medicare SELECT plans are sold through either: - a managed care provider - an insurance company that offers the policy's benefits through a network of doctors, hospitals, and health care service providers - Every Medicare SELECT plan must be labeled with the type of Medigap plan on which it is based. It must also include the word SELECT. - less expensive because participants must get services through the plan's network. - only supplements Medicare Parts A and B. It cannot be used to supplement Medicare Advantage (Part C), which is itself a managed care alternative to Parts A and B.

Part B

- medical insurance - covers PHYSICIAN'S services, outpatient hospital care, physical therapy, ambulance trips, medical equipment, and some preventive services. Part B supplements Part A coverage.

Part A Gaps:

- per benefit period deductible - daily hospital coinsurance payments - hospital coverage beyond 150 days - daily coinsurance payments for skilled nursing facility care - skilled nursing facility care beyond 100 days - home health care

health maintenance organization (HMO)

- plans look much like PPOs because both plans have a network of providers that provide a full range of health care. What distinguishes an HMO plan from the Medicare beneficiary's standpoint is that HMO plans are generally more rigorous about using network providers. In an HMO, out-of-network care may not be covered at all - a patient often may not access specialists without a referral from his or her primary care physician—a general practitioner who acts as a gatekeeper to the HMO's other services. - most cost effective

Part B Exclusions

- prescription drugs - vaccinations - routine eye care and eyeglasses - hearing aids and hearing exams - dental care - health care received outside the United States - skilled nursing facility care - cosmetic surgery - personal comfort items

Medicaid

- provides health care coverage to people whose income, health, or age qualifies them for it. - funded by the federal and state governments, but the states administer it. The federal government pays a percentage of Medicaid expenditures, which varies by state. - Children in families whose income is less than the federal poverty level are eligible for Medicaid coverage through the Children's Health Insurance Program (CHIP). - Those who are blind, disabled, or at least age 65 are eligible for Medicaid if their income and financial resources qualify. Medicaid is especially helpful to elderly people because the cost of long-term nursing home care and catastrophic illness can exhaust their Medicare benefits and personal savings.

Nonforfeiture Benefit

- states that if the policyowner cancels the LTC policy, a minimal amount of paid-up LTC benefits will remain in force. - The amount of paid-up coverage is usually equal to the sum of premiums that were paid to fund the policy.

Purpose of Medicare Supplement Plans

- supplement Original Medicare (Parts A and B). They do not supplement Medicare Advantage (Plan C) plans because those plans already cover many of the gaps that a Medigap policy covers. Persons who qualify for Medicare can buy a Medicare supplement policy regardless of their health condition if they: - are age 65 and older and - apply for a Medicare supplement policy within six months of enrolling in Medicare Part B - The insurance company cannot deny or condition the issue of a policy because of one's medical history, health status, or claims experience.

Diagnostic Related Groups (DRGs)

- system of coding hospital procedures or services. Medicare allows a hospital a certain predetermined payment for diagnoses within certain diagnostic groups. - For example, the DRG system allows eight days of hospitalization for a broken hip.

Elimination Period

- the policy payments begin after the insured has satisfied the policy's elimination period (or waiting period). - An elimination period is defined in terms of service days or calendar days. With calendar days, a specific number of days must pass before benefits are payable. With service days, only the days on which the insured received care are counted. - A policy with a longer elimination period costs less than one with a shorter elimination period.

adult day care program

- type of group care and supervision provided outside the home to adults who may be physically or mentally disabled. Care is provided on less than a 24-hour basis.

Part B Eligibility

- voluntary and available to anyone who qualifies for Part A. No one may enroll in Medicare Part B if not enrolled in Part A. Unlike Part A, Part B requires a monthly premium. - Part B is not available to those covered under Part C (Medicare Advantage), since Part C includes the coverage of both Parts A and B.

Waiver of Premium Provision

- waives the premiums if the insured becomes eligible for benefits. If it is a standard provision, there is no additional premium. - Some policies waive the premium when benefits become payable. Others require that benefits be paid for a specified period (such as 90 days) before premiums are waived.

Limitation on Inpatient Mental Health Coverage

A Medicare beneficiary is eligible for up to 190 days of inpatient mental health care in a psychiatric hospital in his or her lifetime. After 190 days, the Medicare beneficiary must pay the full cost of any additional days of such care.

Limitations on Out-of-State Policies

A group policy issued in another state may not be offered to North Carolina residents unless the other state's insurance regulator has determined that the policy meets the state's requirements for LTC policies, which are substantially similar to North Carolina's requirements.

Standards for Long-Term Care Insurance

A long-term care insurance policy may not - be canceled, nonrenewed, or terminated due to the insured's age or deterioration of mental or physical health; - contain a provision establishing a new waiting period if the existing coverage is converted to or replaced by a new form within the same company (unless an increase in benefits was voluntarily selected); or - provide coverage for skilled care only or provide significantly more coverage for skilled care in a facility than for lower levels of care.

Guaranteed Renewable

All Medicare supplement policies are guaranteed renewable. A policy cannot be canceled because of the insured's health. Premiums may be increased, though the increase must apply to all such policies issued by the insurer, and not just to a particular insured's policy.

Eligibility for LTC Benefits

An LTC policy provides benefits after the insured meets a benefit trigger as defined in the policy. Benefits are triggered by: - the insured's inability to perform two or more activities of daily living (ADLs) - the insured's loss of cognitive ability, such that it limits the ability to care for oneself without help or supervision (cognitive abilities being include the ability to think, reason, perceive, or remember) - medical necessity

Indemnity vs. Reimbursement Contract

An indemnity contract pays the full daily benefit even if the cost of the care is less. In this respect it is like a valued contract. The more common reimbursement contract limits the daily benefit to the actual expense and does not exceed the maximum daily benefit amount that the policy specifies.

Advertisements

An insurer must provide a copy of any Medicare supplement advertisement it intends to use in North Carolina to the Commissioner for review and approval.

Disclosure Notices

Before making a change requested by a policyholder that would cause a partnership policy to lose its qualified status, the insurer must notify the policyholder within 30 days regarding how the action would affect the insured. The insurer must also obtain the insured's signature indicating that he or she consents to the change.

Medicaid Benefits

For Medicare beneficiaries who are eligible for their state's Medicaid program, Medicaid is the secondary insurer. Medicare is the primary insurer.

Covered Drugs

Formulary tiers tell Medicare beneficiaries how much, if anything, they must pay for certain drugs provided by their plan. Most plans have three tiers, though some have four: - Tier 1: Generic drugs, which are usually the least inexpensive to the consumer - Tier 2: Preferred brand name drugs - Tier 3: Non-preferred brand name drugs - Tier 4: Specialty drugs, which are usually the most expensive brand name drugs

Coverage and Cost-Sharing for Blood

If a hospital charges a Medicare inpatient for blood, Part A covers the cost of all but the first three pints provided each calendar year. However, since hospitals often get blood at no charge from blood banks, patients usually aren't charged for it.

Special Enrollment Period

Individuals who are covered under their employer's medical plan may defer coverage of Medicare Part B until they retire. A special enrollment period (SEP) allows them to sign up for Part B after their IEP without penalty. The SEP is available during the eight-month period that begins the month after employment or group coverage ends, whichever happens first

Benefits

LTC insurance benefits that reimburse long-term care expenses are not subject to federal income taxation. However, these benefits are subject to a daily limit. This limit ($380 in 2020) is adjusted annually for inflation. Benefit payments over this limit will be taxed as income unless offset by the taxpayer's unreimbursed long-term care expenses.

How Benefit Amounts Are Defined

LTCI benefits are usually defined in the contract to be a maximum amount of money payable per day or per month and for a maximum number of years. However, if the claimant uses less than the maximum amount of benefits permissible in a given period, as a rule, the unused excess lengthens the maximum number of years benefits are payable. This is known as the pool of money clause found in most policies.

Part A Coverage

Medicare Part A is hospital coverage that covers: - inpatient hospital costs - skilled nursing facility costs - home health care costs - hospice costs

Medicare Conditional Payments (Subrogation)

Medicare does not pay for claims to the extent that the beneficiary will receive, or could receive, an insurance payment or workers compensation. However, Medicare may pay a claim when the primary insurance plan does not make an immediate payment. Then Medicare has the right to subrogate the payment and seek reimbursement from the primary insurer when it does make the payment.

No Prescription Drug Coverage

Medicare supplement plans sold today cannot include prescription drug coverage, which is available through Part D.

Part A Home Health Care Coverage

No prior hospitalization is required for this coverage. There is no limit on the number of home health care visits. Medicare Part A pays for all approved services. It also pays 80 percent of the approved amount for durable medical equipment, such as wheelchairs.

Long-Term Care Insurance Act

North Carolina has enacted the Long-Term Care Insurance Act, which governs the sale and issuance of long-term care insurance policies in the state.

Coverage for Active Workers

Persons over age 65 who continue working and are covered under an employer's medical plan can also be covered under Medicare. Medicare coverage does not affect the amount of their future Social Security benefits. If they file a claim, the employer's plan is usually the primary payor and Medicare is the secondary payor. (If the employer has fewer than 20 employees, Medicare usually pays first.)

Required Disclosures

Policyholders have the unconditional right to return a policy within 30 days of its delivery and to have the entire premium refunded.

General Enrollment Period

Qualified individuals who did not enroll in Part A or Part B during the IEP when they were first eligible can enroll during a general enrollment period (GEP) between January 1 and March 31 each year. Coverage will begin July 1. It may be necessary to pay a higher premium for late enrollment.

Open Enrollment

Regardless of health status, people may buy a Medicare supplement policy if they are at least 65 years old and apply within six months (the open enrollment period) after enrolling in Part B.

Special Needs Plan

SNPs are available only to individuals who: - are institutionalized - are dually eligible for both Medicare and Medicaid - have severe or disabling chronic medical conditions

Taxation of Benefits

The benefits received under a qualified long-term care policy are generally tax free

intermediaries

The organizations handling Part A claims from hospitals, skilled nursing facilities, home health agencies, and hospices

carriers

The organizations that handle Medicare Part B claims

Levels of Long-Term Care

There are three levels of long-term care: skilled, intermediate, and custodial

Pool of Money Concept

They treat the total benefit amount as a sum of money available to cover all types of long-term care for however long the pool lasts.

custodial care

This care helps a person with daily living activities like bathing, dressing, or eating. While custodial care must be directed and monitored by a licensed physician, it does not need to be administered by skilled professionals and is often given by nurse's aides. It can be given in nursing homes, assisted living facilities, adult day-care centers, respite centers, or a person's home.

skilled nursing care

This is continuous, 24-hour care delivered by licensed medical professionals, under the direct supervision of a doctor. This care is usually delivered in a nursing home.

intermediate care

This is ongoing care for a person's condition but is not needed all day. It is delivered by registered nurses, licensed practical nurses, and nurses' aides who are supervised by a doctor. Typically provided to patients who are recovering from acute medical conditions, it is usually delivered in a nursing home. It may also be given in one's home, an assisted living facility, or a community-based center.

Part C Eligibility

Those eligible for Medicare Parts A and B qualify for Part C, Medicare Advantage plan. They must live in the service area of the managed care plan they select when enrolling in Part C.

Qualified LTC Policy Premiums

With a tax-qualified LTC plan, premiums are a qualifying medical expense for federal income tax purposes. Subject to limits, they may be added to other out-of-pocket medical expenses in qualifying for a medical expense deduction. The amount of premium that may be deducted is subject to maximum limits based on the taxpayer's age.

rolling

agents switch people each year to obtain higher first-year commissions.

Life Policy Rider

an LTC endorsement gives financial support for the costs of medical care, nursing home care, and assisted living care while the insured is alive. An insured is eligible for its benefit when he or she is diagnosed as chronically ill from a medical or cognitive (mental health) condition.

attained age rating

an insured's premium will increase as he or she gets older. If individuals buy the plan at age 65, they will pay what the company charges 65-year-old customers. Then at age 66, they will pay whatever the company is charging 66-year-old customers.

Medicare Eligibility

available to U.S. citizens and certain permanent residents who meet at least one of the following: - are at least 65 years old - have received Social Security disability checks for at least two years - have end-stage renal disease (ESRD, a kidney disease requiring a transplant or dialysis) - have amyotrophic lateral sclerosis (ALS, or Lou Gehrig's disease) Permanent legal residents must live in the United States for at least five years to qualify for Medicare.

Part B: Medical Insurance

available to those with Part A, covers medical care beyond hospitalization. There is no annual out-of-pocket maximum for Part B claims. However, benefit payments can differ when a person receives care from a non-Medicare-approved physician.

activities of daily living

bathing, continence, dressing, eating, toileting, and transferring.

Preferred provider organizations (PPOs)

companies that have contracted with various hospitals, physicians, and other types of health-care providers to form a network that offers a complete range of care. The design of most Medicare Advantage PPO plans encourages its enrollees to choose providers in the PPO network by making it less costly to use network providers than going out of the network for care.

Coverage for Inpatient Hospital Care

coverage covers costs only for items that are medically necessary, that is, needed for the diagnosis or treatment of a medical condition. It will not pay for a television or telephone in the room or for personal grooming or comfort items

Patient Protection and Affordable Care Act of 2010

eliminated the deductible and coinsurance cost share for most preventive services that are part of a personalized prevention service plan.

Omnibus Budget Reconciliation Act (OBRA)

enacted mandatory federal Medigap standardization requirements

Medicare Improvements for Patients and Providers Act of 2008

expressly authorizes implementation of the Medigap policy revisions adopted by the NAIC in 2008.

Medicare Administrative Contractor (MAC)

federal government substituted Medicare administrative contractors (MACs) for these private insurers to process Medicare claims and payments. In addition to processing claims and payments, MACs enroll health care providers in the Medicare program and train them in Medicare billing requirements.

Medicare-Aid

free Medicaid program for North Carolina residents who are eligible for Medicare and have limited income and resources. The program helps pay Medicare premiums, co-payments, and deductibles.

Outline of Coverage

gives the insured a summary of the basic benefits offered by the Medicare supplement plan, including fees and charges and required disclosures of information. This information permits the insured to compare benefits and charges with other plans.

Quality Improvement Organization (QIO)

group of practicing doctors and other health care experts paid by the federal government to check and improve the care given to Medicare patients. They must review an insured's complaints about the quality of care given

issue age rating

if individuals first buy the plan at age 65, they will always pay the premium that the company charges 65-year-old customers, no matter what their age

Loss Ratios

insurance companies are required to use a certain percentage of the premium to pay benefits as opposed to applying it to their administrative expenses, operating costs, salaries of employees, and the like.

Part D Eligibility

is available to those covered by Medicare Parts A, B, and C. It is available as a stand-alone plan. It can also be added to Original Medicare (Parts A and B) or included with Medicare Advantage (Part C).

tax-qualified LTC policy

meets HIPAA requirements for benefits; a nonqualified plan does not meet these requirements. A tax-qualified LTC policy has tax advantages not available to nonqualified policies. However, tax-qualified policies must adhere to requirements not imposed on nonqualified policies.

Estate recovery

placing a statutory claim on the estate of a deceased Medicaid recipient

Private fee-for-service (PFFS)

plans operate on a fee-for-service basis like Original Medicare, but they are different because it is the PFFS plan, rather than Medicare, that establishes the approved amount that will be paid for each service.

Genetic Information and Nondiscrimination Act of 2008

prohibits the denial or the discrimination of pricing of Medigap policies based on genetic information

Respite care

refers to providing temporary support to the primary caregiver of an aged, disabled or handicapped individual by taking over that person's tasks for a limited time in the insured's home.

Return of Premium

returns part of the premium paid for the LTC coverage to the insured's estate or to a named beneficiary when the insured dies. The amount of the premium returned is based on whether the insured used the policy's benefits and if so, to what extent.

Home health care services

services and medical supplies provided in a person's home

Medicare Savings Program

state-run program offered in each state that reduces Medicare costs for eligible persons. The program helps persons with limited income and financial resources pay for Medicare Part B premiums. It may also help pay for Medicare deductibles and coinsurance.

Resource protection

the amount of resources that a Medicaid recipient can protect during the long-term care Medicaid eligibility determination process.

Homemaker services

type of support services provided by para-professionals who help elderly individuals in their own homes. They include assistance in managing household budgets, planning meals, purchasing food, housekeeping duties, consumer education, and basic personal and health care.

Prospective Payment System (PPS)

way to pay a hospital a preset amount for a certain number of days of care for each diagnosis rather than each hospital submitting bills for a patient's stay

Special Needs Plans

were created to help manage the extra health-care needs of individuals in the following groups: - those with certain chronic or disabling diseases such as heart disease, diabetes, or HIV/AIDS - those living in a nursing home or certain other institutions - those who qualify for both Medicare and Medicaid ("dual eligibles")

Private Fee-for-Service Plan

which is a Medicare-approved private insurance plan. Medicare pays the private plan for traditional Medicare-covered services, and the plan determines which additional services it will cover and what share of expenses the Medicare beneficiary will pay.