Medicare - Certification Exam

Core (Basic) Benefits

(1) Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period (2) Coverage of Part A Medicare eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used. (3) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of one hundred percent (100%) of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer's payment as payment in full and may not bill the insured for any balance. (4) Coverage under Medicare Parts A and B for the reasonable cost of the first three (3) pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations (5) Coverage for the coinsurance amount, or in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount, of Medicare eligible expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible (6) Hospice Care: Coverage of cost sharing for all Part A Medicare eligible hospice care and respite care expenses.

Exclusions: Cost Sharing

- Part B excludes coverage for routine physical exams, routine foot care (including flat feet or subluxations of the foot), eye/dental/hearing exams and treatment, most immunizations, medically unnecessary cosmetic surgery, private duty nurses, intermediate skilled nursing and custodial care, skilled nursing home care after 100 days, the first 3 pints of blood, acupuncture, orthopedic shoes, chiropractic care, and prescription drugs. Physician charges above Medicare's approved amount, care received outside of the U.S., and expenses incurred as a result of war are also excluded from Medicare Part B. -Part B coverage for mental health services is limited to a benefit of 45% of approved charges. -Only drugs given at a doctor's office or hospital are covered by Medicare Part B. -The 3-pint "blood-deductible" only applies if it has not already been met by Medicare Part A.

Premiums

-A Medicare supplement policy using issue age to determine premiums is more expensive initially because they lock your age when you purchase the policy and cannot increase in the future based on age. -A Medicare supplement policy using attained age to determine premiums is less expensive initially because they don't lock in your age and instead increase premiums incrementally as you age. -No insurer shall use attained age as a structure for its Medicare supplement insurance rates unless the structure is fully disclosed to the applicant at the time of application or time of delivery if the purchase is by mail order. -Insurers can also use a community rating, meaning the community will all be charged the same rate if enrolled in the same plan.

Medicare Supplement Policies

-A Medigap policy is a Medicare supplement insurance policy sold by private insurance companies to fill "gaps" in Medicare Parts A and B. Medigap policies do not pay costs for Medicare Parts C and D. -A person who has a Medicare Advantage plan does not need a Medigap policy because these plans generally cover many of the same benefits that a Medigap policy would cover. In fact, it is illegal for anyone to sell a Medigap policy to a person who is in a Medicare Advantage plan, unless the individual is changing coverage to Original Medicare. - If an individual's Medigap policy provides prescription drug coverage, then the individual cannot also have a Part D plan. -Medicaid may cover expenses not paid for Medicare for eligible low-income participants. Those who are eligible for Medicaid in addition to Medicare do not need supplemental insurance.

Medicare Part C (Medicare Advantage) Managed Care : Covers the following:

-A all-encompassing alternative to Parts A and B utilizing HMOs, PPOs, Private Fee-For-Services -Medicare Part D; In , federal legislation expanded Medicare to include Prescription Drug Insurance

Medicare Part D: Premiums

-A maximum deductible of $405 must be paid by the individual before the plan begins to pay. -After the individual has met the deductible, the plan typically requires a coinsurance of 25% (insurance company pay's 75%) or a flat dollar copayment until the total paid by the plan and the individual reaches $3,750. -Once the combined spending between the individual (including the deductible) and the plan reaches $3,750 the individual is in their coverage gap (the doughnut hole), where the individual pays 44% of generic prescription drug costs and 35% of brand-name drug costs. This coverage gap is in effect until the individual has spend $5,000 out-of-pocket for the year. -Once the $5,000, total out-of-pocket amount is reached, the plan's catastrophic coverage begins, which includes all covered prescription drug costs except for small copayment or coinsurance.

Medicare Select

-A type of Medicare supplement that works like a Managed Health Care Plan. You must choose providers that belong to a network (except in cases of emergencies). -Examples of Medicare Select organizations include provider groups, PPOs, hospital marketing plans, and groups that are formed or operated by insurers or third-party administrators. -With a Medicare Select plan, the insured agrees to use preferred providers, and in exchange, pay a lower premium.

Respite Care

-Allows a family member or caregiver a break from caring for a loved one who is confined to their home. -Requires a copayment of 5% of Medicare approved charges for inpatient respite care and $5 coinsurance for outpatient prescription drugs -Has a maximum benefit of 5 days at a time.

Eligibility and Enrollment: Medicare Supplement Policies

-Any person who is eligible for Medicare coverage and has enrolled in Parts A and B is also eligible to enroll in a Medicare Supplement policy. Open enrollment for Medigap policies spans a six-month period beginning on the first day of the month in which the individual is age 65 or above and enrolls in Part B. Coverage may not be denied based on a person's health status, claims experience, or pre-existing medical condition if an individual enrolls during the open enrollment period. -Each Medigap policy insures one individual, so a married couple wanting Medigap coverage would require two separate Medigap policies. Everyone pays monthly premiums for Medigap coverage.

Definitions

-Applicant: the person who seeks to contract for insurance benefits for an individual policy or the proposed certificate holder in a group policy. -Certificate: any certificate delivered or issued for delivery in this state. -Insurer: entities subject to Articles 65 through 67 of this chapter. -Medicare Supplement policy - group or individual policy designed to supplement the hospital, medical, or surgical expenses covered under Medicare.

The Long-Term Care Market

-As individuals age, they are likely to suffer from acute and chronic illnesses or conditions. An acute illness is a serious condition, such as pneumonia or influenza, from which the body can fully recover with proper medical attention. The patient may also need some assistance with chores for short periods of time until recovery and rehabilitation from the illness are complete. Some people will suffer from chronic conditions, such as arthritis, heart disease, or hypertension, which are treatable but not curable illnesses. When chronic conditions such as diabetes or heart disease initially manifest, many people ignore the inconvenience or pain they cause. Over time, a chronic condition frequently goes beyond being a nuisance and begins to inhibit a person's independence. Typically, the need for LTC arises when physical or mental conditions impair a person's ability to perform the basic activities of everyday life, such as feeding, toileting, bathing, dressing, and walking. This is the risk that long-term care insurance is designed to protect. -LTC policies typically set age limits for issuing policies. While some newer policies can be more lenient regarding age, Individual Long-term care policies are generally available to applicants between the ages of 40 and 85. Those younger than age 40 are typically too young to think about buying this coverage, while those over age 85 tend to be uninsurable (ineligible).

Medicare Part D: Prescription Drug Plan - Eligibility and Enrollment An individual can enroll in Part D if the individual has Parts A and B and lives in the plan's service area. If there is no plan offered in the area, Federal standard Part D plan will be provided. An individual can enroll into, drop, or change a Part D plan during the following periods:

-During the initial Medicare enrollment period. -During the open enrollment period for Medicare Part D (October 15th - December 7th). Coverage begins on the first of the year. if an individual moves out of state or outside the plan's service area, they must notify the plan that they are moving, and can enroll in a new plan during the open enrollment period.

Medicare Advantage : Eligibility and Enrollment

-During the open enrollment period. October 15th through December 7th annually. Coverage begins on January 1st the following year. Open enrollment is for those who want to make changes to their plan or change from Original Medicare to Medicare Advantage. if an individual has a Medicare Part C plan and moves out of state or outside of the plan's service area, the individual will have to enroll in a new plan during the open enrollment period. -During the general enrollment period. If you enrolled in Medicare Part A and or B during the January-March A B general enrollment, you can take advantage of the April 1st-June 30th general enrollment for Medicare Part C and D.

Additional Notes on Medicare Advantage

-Each Part C plan has a different premium which is charged in addition to any premiums for Parts A and B. Coverage for Part D may be charged separately if included in the plan. In addition to premiums, some Part C plans charge an annual deductible. -An individual cannot have both Part C coverage and a Medicare Supplement policy. Agents are not permitted to sell Medicare Supplement policies to individuals who are enrolled in Part C. -Most Part C plans include prescription drug coverage. An individual who has Part C without prescription coverage and enrolls in part D will be disenrolled from Part C and will have Original Medicare coverage. -As of 2012, Part C plans cannot charge a Medicare beneficiary more than Original Medicare for specific medical services, such as chemotherapy, dialysis, and skilled nursing facility care. Additionally, there is an annual cap for out-of-pocket costs for services received from Parts A and B each year. This maximum varies from plan to plan.

Additional Regulations

-Every insurer providing group Medicare supplement insurance benefits must file a copy of the master policy and any certificate used the state in accordance with the filing requirements and procedures applicable to group policies issued in that state. -Every insurer providing Medicare supplement insurance or benefits in North Carolina will provide a copy of any Medicare supplement advertisement intended for use in North Carolina whether through written, radio, or television medium to the Commissioner for review or approval by the Commissioner. -The producer who solicits the application is primarily responsible for determining the appropriateness of a Medicare supplement policy for a proposed insured. Producers must do their best to ensure that the applicant is purchasing coverage that suits their needs and does not duplicate existing coverage. It is illegal to sell a Medicare Supplement policy to an individual who already has one or has a Medicare Advantage plan unless they are leaving that plan. -When replacing an existing policy, the producer must provide the applicant a Notice Regarding Replacement explaining the replacing coverage in comparison to the existing coverage. Included in the Notice, the applicant must be provided a 30-day free look period for the replacing coverage. -Insurers must send notice to each policyholder at least 30 days prior to the annual effective date of coverage or renewal stating any changes or modifications in Medicare benefits, coverage and premiums.

Incontestability Period

-For a policy that has been in force for less than six months, an insurer may rescind the policy or deny an otherwise valid claims upon a showing of misrepresentation by the insured that is material to the acceptance for coverage. - For a policy that has been in force for at least six months but less than two years, an insurer may rescind the policy or deny an otherwise valid claims upon a showing of misrepresentation by the insured that is both material to the acceptance for coverage and that pertains to the condition for which benefits are sought. - After a policy has been in force for two years, the policy is incontestable upon the grounds of misrepresentation on the application alone. That policy may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health.

Inpatient Hospitalization : Inpatient means the recipient must receive over-night care or treatment in a hospital. This includes semiprivate room and board (meals), as well as nursing services, hospital services and supplies, prescription drugs given while in the hospital.

-For the first 60 days of hospitalization during any one benefit period, Medicare pays for all covered services, except for the initial deductible (currently$1,340). -For the first 61st through 90th day of hospitalization, Medicare pays a reduced amount of the covered services. The patient is responsible for a daily coinsurance (currently $335 or 1/4). -For the 91st day onward the patient may draw from their 60 Lifetime Reserve Days. However, once those days are used, the patient would be required for any future hospital time during that benefit period. -When using the life time reserve days, the patient is still responsible for the daily deductible (currently$670 or 1/2) -Excludes: private duty nursing, private rooms, personal care items, and amenities such as a television or phone use. -Even when hospitalized, physician's fees are covered by Medicare Part B NOT Medicare Part A. -The maximum number of days that can be used in one benefit period is 150, this includes using all an individual's life time reserve.

Additional Common Long-Term Care Features and Benefits include:

-Guaranteed Insurability Option - allows the insured to purchase additional insurance coverage in the future without providing evidence of insurability. Increases are available at specific dates or life events and are typically limited to 5% per year. -Waiver of Premium Option (provision) - provides the security to a policyowner of preventing a policy from lapsing for nonpayment of premiums while the insured is disabled. The insurance can stop paying premiums when they start receiving long-term care benefits under their policies. This typically requires a disability to be total and permanent as well as waiting period between diagnosis and the benefit taking effect. -Suitability or Financial Worksheets - are used to determine whether or not issuing long-term care insurance to an applicant is appropriate. This excludes life insurances that accelerates the death benefit for long-term care. This worksheet typically must be completed prior to completing an application. If an applicant does not meet the recommended financial or personal asset suitability test criteria, they should receive a notification letter and be given an option to waive the results of the financial suitability test to proceed with the purchase of the policy. -A Return of Premium - option allows a portion of the premiums paid to be returned if an LTC policy is lapsed, or an insured dies before benefits are paid out. The amount of the premium returned is based on whether the insured used the policy's benefits and if so, to what extent.

Availability of Coverage

-If the application for a Medicare supplement policy is made during open enrollment, an insurer cannot deny or discriminate its pricing based on the applicant's health status, claims experience, health care, or medical condition. -If an applicant applies for coverage during their open enrollment and as of that date has had continuous creditable coverage of at least six months, the insurer cannot exclude benefits for pre-existing conditions. if the period of creditable coverage is less than six months, the insurer must reduce the exclusionary period for pre-existing conditions by the total period of creditable coverage that the applicant has satisfied by the enrollment date. -Every Medicare supplement policy that an insurer sells must be made available to all qualified applicants regardless of their age. -Insurers must offer at least standardized supplement Plan A to person eligible for Medicare by due to disability before age 65 and as well as standardized Plan C or F if offering either of those to persons eligible for Medicare due to age. To be eligible, a person must apply during the six-month period beginning with the first month the person first enrolls in Medicare Part B. An insurer may develop premium rates specific to the disabled population.

Medicaid

-If you are eligible for both Medicare and Medicaid, you are known as dual eligible. Those who have Medicare and full Medicaid coverage, most likely have all of their healthcare covered between the two programs. When someone is dual eligible for Medicare and Medicaid, Medicare is the primary insurer and Medicaid is the secondary insurer. -If a Medicare supplement policyholder becomes eligible for Medicaid, the supplement policy must suspend benefits and premiums at the policyholder's request for up to 24 months, but only if the insurer is notified within 90 days of the date on which the policyholder becomes eligible for Medicaid.

North Carolina Specific Rules and Regulations for Medicaid

-In North Carolina, the Division of Medical Assistance (DMA), an agency of the North Carolina Department of Health and Human Services (DHHS), administers the state's Medicaid program. Medicare-Aid program is a program for residents of North Carolina who are eligible for Medicare and have limited financial resources. The various program through Medicare-Aid help pay Medicare premiums, co-payments, and deductibles. -To determine financial resources when trying to qualify for Medicare-Aid long-term care assistance, North Carolina distinguishes between countable (or nonexempt) assets and unavailable (or exempt) assets. Exempt assets are those that are not taken into account when determining financial eligibility for Medicare-Aid.

Original Medicare Enrollment There are three enrollment periods for Medicare Part A and Medicare Part B:

-Initial Enrollment: includes the three months leading up to your the birthday, the month of your 65th birthday, and the three months after your the birthday. 7 months in total. -Annual, general or open enrollment is January 1st through March 31st -Special enrollment Period (SEP) Typically, a late enrollment penalty does not apply if enrollment is made during the special enrollment period. Those receiving Social Security Disability for at least twenty-four months, those experiencing the disabling onset of Lou Gehrig's disease, or those with End Stage Renal Disease may also qualify for a SEP> There is an 8-month SEP that begins upon retirement or termination of group health coverage, whichever occurs first, if you delayed enrollment due to a group health coverage. however, A person can enroll anytime they or their spouse, are working and the person is covered by an employer or union-sponsored group health plan.

Medicare Part A: Hospital Coverage: Covers the following:

-Inpatient care in hospitals -Skilled nursing facilities (if hospitalized before entering) -Drugs administered as part of inpatient treatment

Underwriting LTC Policies

-Insurers need to carefully determine if an applicant is insurable prior to approving the application. The applicant must receive a copy of the application upon policy delivery, at the latest, and this application becomes part of the entire contract. -Older individuals applying for LTC coverage may be required to provide medical records, along with an attending physician's statement, in addition to undergoing a physical exam and ADL evaluation. -Post-Claims underwriting, the act of approving all applicants and waiting to underwrite until a claim is filed, then later denied claims for health or other reasons, is prohibited in LTC policies.

Original Medicare :

-Medicare Part A is compulsory hospitalization insurance (HI) that provides specified hospital and related benefits. It is compulsory in that all workers covered by Social Security finance its operation through a portion of their FICA taxes and automatically receive benefits once they qualify for Social Security benefits. -Medicare Part B is a voluntary program designed to provide supplementary medical insurance (SMI) to cover physician services, medical services, outpatient care, preventative care, and supplies not covered under Part A. Those who desire the coverage must enroll and pay a monthly premium.

Cost Sharing

-Medicare providers are required to file Medicare claims for covered services and supplies at least 12 months after the date the services were provided by filling out the Patient Request for Medicare Payment form. -Original Medicare recipients will receive a Medicare Summary Notice in the mail every 3 months for Medicare Part A and Part B covered services. This notice shows all your services or supplies that providers and suppliers billed to Medicare during the three-month period, what Medicare paid, and what you may owe the provider. This notice is not a bill.

QIOs have binding authority in regard to its review of hospital activities and is responsible for:

-Monitoring appropriateness, effectiveness, and quality of care provided to Medicare Patients. -Review complains regarding the quality of care given by hospitals (inpatient, outpatient ,and ER), ambulatory surgical centers, home health agencies, skilled nursing facilities, Medicate private fee-for-service plans, etc. -Provide "best practices" and assist with improvement of physicians, hospitals, nursing homes, home health agencies, etc. -Improving quality of care for beneficiaries. -Protecting the integrity of the Medicare Trust Fund by ensuring that Medicare pays only for services and goods that are reasonable and necessary and that are provided in the most appropriate setting. -Protecting beneficiaries from violations of the emergency Medical Treatment and Labor Act (EMTALA)

Standards for policy provisions

-No Medicare supplement policy or certificate in force in North Carolina shall contain benefits that duplicate benefits provided by Medicare. -No long-term care insurance policy can use a definition of "pre-existing condition" that is more restrictive than the following: "pre-existing condition" means a condition for which medical advice or treatment was recommended by, or received from a provider of health care services, within six months preceding the effective date of coverage of an insured person.

Required Benefits Include

-Non-Forfeiture options: allow the insured to surrender the policy without forfeiting all the premiums they have paid. It ensures the insured will at least receive some of the benefits from the policy if they stop paying premiums after a specified period. The larger the amount of premiums paid, the larger the nonforfeiture benefit will be. If an applicant rejects the nonforfeiture benefit, the insurer must provide a contingent nonforfeiture benefit, which provides protection if the policyowner is no longer able to pay premiums due to a premium increase beyond a specified level. This provision is usually provided through one of the following methods: -Cash Value Surrender Options - Lump sum payable when the policy is surrendered -Extended Term Options - Coverage is extended for a limited period and no further premiums are required -Paid Up or Reduced Insurance Options - daily benefit amount or benefit period is reduced and no further premiums are required. -Coverage cannot be restricted to only skilled care -Conversion privilege to state partnership program -Conversion privilege to individual policy from group policy -Free-look review/return period provides a full premium refund if policy is returned within 30 days of delivery, regardless of reason -Clear and concise language -Prevention of hospitalizations or institutionalization benefit triggers -Inflation or cost of living protection provides increases in the amount of insurance protection tied to an inflation index (consumer price index) without requiring the insured to provide evidence of insurability. It is designed to safeguard the insured from the effects of inflation on health-care costs. The younger you are when purchasing a long-term care policy, the more concerned about inflation protection you should be because you may not need long-term care protection for many years. -Insureds have two options for inflation protection in a long-term care policy. Compound inflation protection increases the original benefit on a compound interest basis, usually by 5% per year. Simple inflation protection increases the original benefit on a simple interest basis, usually by 5% per year.

Automatic Part A and Part B Enrollment:

-On the first day of the month a person reaches age 65 and is eligible to receive or is currently receiving Social Security or Railroad Retirement Board benefits. -After 24 months of receiving Social Security disability (coverage would start month 25) -The month of Lou Gehrig's disease disability onset -Those enrolled in Part A will automatically be enrolled in Part B unless the individual declines the coverage

Medicare Part B: Medical (Physician) Insurance: Covers the following:

-Outpatient medical services -Preventative care

Medigap Core Benefits: The standardized core (basic) benefits for all Medigap policies are offered in Plan A and must be included in Plans B, C, D, F and High Deductible, G, M and N. They cover:

-Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period -Part A Medicare eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used -Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100% of the Medicare Part A eligible expenses for hospitalization paid, subject to a lifetime maximum benefit of an additional 365 days -Coverage under Medicare Parts A and B for the reasonable cost of the first three (3) pints of blood (or equivalent quantities of packed red blood cells) -Services for treatment of mental disorders, pap smears and mammograms, blood-glucose monitoring strips, nutritional IVs, bone marrow transplants, hormone-replacement therapy, hospice care, and any speech, hearing, or language disorders -Coverage of cost sharing for all Part A Medicare eligible hospice care and respite care expenses. Plan B: - 100% of the Medicare Part A inpatient hospital deductible amount per benefit period. Plan C; -100% of the Medicare Part A inpatient hospital deductible amount per benefit period. -Coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A. -Coverage for all of the Medicare Part B deductible amount per calendar year regardless of hospital confinement. -Coverage to the extent not covered by Medicare for 80% of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician and medical care received in a foreign country, which care would have been covered by Medicare if provided in the United States and which care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of $250, and a lifetime maximum benefit of $50,000. Plan D: -100% of the Medicare Part A inpatient hospital deductible amount per benefit period. -Coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A. -Coverage for all of the Medicare Part B deductible amount per calendar year regardless of hospital confinement.

Plan Types and Benefits: Medicare Supplement Policies

-Plans purchased before June of 2010 will remain in force and are renewable for life. As of June 2010, there are 10 standardized Medigap plans which have a letter designation of A, B, C, D, F, G, K, L, M, or N. These policies were standardized by the National Association of Insurance Commissioners (NAIC) to help consumers understand and compare them and make informed buying decisions. The benefits of each plan may not be altered by insurers, nor may the letter designation be changed (although insurers may add names or titles to the letter designations). -Medigap policies must supplement both Medicare Part A and Medicare Part B and automatically adjust its benefits to reflect statutory changes in Medicare. Plans K and L differ from the other Medigap plans as they were designed to give beneficiares an incentive to control costs by offering lower premiums, but high out of pocket costs. Insurance companies that sell Medigap policies must offer Plan A, and if a company offers any Medigap plan besides Plan A, it must also offer either Plan C or Plan F.

Loss Ratio

-Policies shall return to policyholders benefits that are reasonable in relation to the premium charged. Each state Commissioner may adopt rules to establish minimum standards for loss ratios of policies based on incurred claims experience (or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis) and earned premiums in accordance with accepted actuarial principles and practices. -Every insurer providing policies or certificates may be required to annually file its rates, rating schedules, and supporting documentation to demonstrate that it is in compliance with the applicable loss ratio standards of the State. -All filings of rates and rating schedules shall demonstrate that the actual and expected losses in relation to premiums comply with the requirements of the state. -The loss ratio (total amount of benefits paid out compared to the total amount of premium dollars collected) for Medicare Supplement policies must be at least 75% for group contracts and 65% for individual contracts.

Standard Policy Provisions

-Policyholders must be provided a free look period of 30 days from the date of delivery to the policyholder. Additionally, each policy must contain a disclosure on the first page of the policy that the policy may be returned during that 30 days period for any reason and all premiums will be refunded less any claims. -Medicare supplement policies must include renewal or continuation provisions that detail the issuer's right to change premiums and any automatic increases at renewal based on the policyholder's age. Policies must be guaranteed renewable (must renew the policy each year but can increase premium) or non-cancellable (must renew the policy each year and cannot increase the premium). An insurer can cancel a Medicare supplement plan after the nonpayment of premiums. -The loss ratio (total amount of benefits paid out compared to the total amount of premium dollars collected) for Medicare Supplement policies must be at least 75% for group contracts and 65% for individual contracts. -Accident and sickness losses must be treated the same. The accidental means test cannot be used. -After a Medicare policy has been in effect for a period of six months, benefits cannot be limited or denied because the individual has pre-existing conditions. Pre-existing conditions cannot be defined more restrictively than condition(s) for which medical treatment or advice was received by a physician in the six months prior to the policy effective date. Pre-existing condition limitations or exclusions must be clearly and prominently disclosed in the policy. -Individuals who become eligible to receive Medicaid benefits are permitted to suspend their Medicare Supplement policy if the request is made within 90 days of receiving Medicaid benefits for a maximum of two years. Upon ineligibility for Medicaid, the individual's coverage will automatically resume within 90 days of Medicaid benefits ending.

Items that don't count towards the coverage gap: Part D Some individuals may qualify for extra help to pay their Part D costs. These individuals will:

-Receive assistance for paying the Part D premiums, deductible, coinsurance, and copayments; -Not have a late enrollment penalty -not experience a doughnut hole -not pay copayments during the catastrophic coverage period To qualify for extra help, an individual must meet the following requirements: -Have Medicare Part A and/or Part B; -Annual income no more than $18,210 for an individual (24,960 if married) -Have lived in one of the 50 states or the District of Columbia -Have combined savings, investments, and real estate not worth more than $14,100 ($28,150, if married) -Annual income must be limited to $17,655 for an individual or $23,895 for a married couple Countable resources do not include: -Primary residence -Once car -Burial plot -Up to $1,500 for burial expenses if you have put that money aside -Furniture -Other household and personal items

The Blood Deductible

-Recipients are responsible for the first three pints of blood each year, known as the "blood deductible." -Individuals are not charged for donated blood. -Blood after the first 3 pints per calendar year are covered by Medicare.

Additional Requirements for Qualified LTC Plans

-Recipients cannot be reimbursed by the plan for medical expenses or services covered by Medicare. -Plans must provide nonforfeiture options and inflation protection. -Policies must be guaranteed renewable and cannot accrue cash value. -A cash surrender value option may be offered only if the dividends or refunds are applied to reduce future premiums or increase future benefits.

Preferred Provider Organizations (PPOs): Preferred provider organization plans (PPOs) are similar to managed care plans. They differ in that beneficiaries don't need referrals to see specialist providers outside the network, and they can see any doctor or provider that accepts Medicare. A preferred provider organization is a collection of health care providers such as physicians, hospitals, and clinics who offer their services to certain groups at prearranged discount prices.

-Regional PPOs may limit the maximum amount that members pay for care outside the network. -Preferred provider organizations usually operate on a fee-for-service basis (where the cost of each service is scheduled), not on a prepaid basis. -PPO's have agreed to offer their services to the group where patient fees are discounted. in return, the group refers its member to the PPO and the providers broaden their patient base. Members of the PPO select from among the preferred providers for needed services. A reduced benefit is typical if the member chooses a provider outside of the PPO.

Facilities, Services & Conditions Defined

-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. -Estate Recovery : involves placing a statutory claim on the estate of a deceased Medicaid recipient -Resource protection : refers to the amount of resources that a Medicaid recipient can protect during the long-term care Medicaid eligibility determination process

Medicare Part D: Prescription Drug Plan The Medicare Prescription Drug and Modernization Act of 2003 established a new Medicare Part D prescription drug benefit. Since January 2006, Medicare offers insurance coverage for prescription drugs to anyone who has Medicare Part A or Part B. Coverage is available in one of the three options:

-Stand-alone, private prescription drug plans that only offers prescription drug benefits. People in these plans get other medical services through the Original Medicare Plans. -Those who want to receive their entire medical and drug benefits from one source can join a Medicare Advantage plan and choose a prescription drug plan that will provide an integrated benefit covering their hospital, physician, and drug costs. Medicare Part C private plans must provide complete medical and drug coverage through these plans. -The law provides federal subsidy payments to employers and unions that sponsor qualified retiree prescription drug plans.

Health Maintenance Organizations (HMO) : A health maintenance organization, or HMO, is a type of managed care organization offering comprehensive prepaid health care services to its subscribing members. HMOs finance health care services for their subscribers on a prepayment basis, but they also organize and deliver the health services as well. HMOs are known for stressing preventive care.

-Subscribers pay a fixed periodic fee to the HMO and are provided wit ha broad range of health services, from routine doctor visits to emergency and hospital care and sometimes even prescription drug coverage. -When joining an HMO, a member will usually be asked to select a primary care physician which is a doctor who provides all care for a particular member and controls all referrals for specialized care, and in some cases, hospital care. This is known as the gatekeeper system. -A closed panel is when an HMO is represented by a group of physicians who are salaried employees and work out of the HMO's facility. -For non-emergency situations, a subscriber may be required to pay up to 100% of the billed amount if a health provider is chosen outside of the network. If a need for emergency health services arises for an enrollee of an (HMO), the enrollee should proceed directly to the nearest emergency room. -Health maintenance organizations may be self-contained and self-funded based on dues or fees from their subscribers. They may also contract for excess insurance or administrative services provided by insurance companies.

Guaranteed Issue Under the Omnibus Budget Reconciliation Act (OBRA) of 1990, Medicare supplement insurance may not discriminate in pricing or be denied on the basis of an applicant's health status, claims experience, receipt of health care or medical condition. Medicare Supplement Policies must be Guaranteed Issue if they are purchased for during the following times:

-The 6-month open enrollment period once an individual first signs up for Medicare Part B. -60 days prior to or within 63 days after the termination of or leaving a group health plan, or 63 days from the date on a claim denial (if this is the only way the enrollee knows coverage ended). If the individual has COBRA coverage, they can either buy a Medicare Supplement policy immediately or wait until the COBRA coverage ends. -An insurer must provide an offer of conversion to individual coverage for certificate holders when a group Medicare Supplement insurance policy is terminated and not replaced. -60 days prior to or within 63 days after changing from a Medicare Advantage Program to Original Medicare and a Medicare Supplement program. This applies to an individual moving out of the plan's service area, or if their program stops giving care in the area. -When moving from one Medigap policy to another, the replacing company must waive all preexisting condition requirements for benefits currently included in the plan being replaced for which that plan's preexisting condition requirement has been met. If there is still time left on the replaced plan's preexisting condition waiting period, that balance may be transferred over to the new policy. Also, if the new policy contains benefits not previously included in the policy being replaced, those benefits exclusively may allow for a new preexisting condition window of 6 months from the effective date of the new policy.

Qualified Vs Non-qualified Plans

-The Health Insurance Portability and Accountability Act (HIPAA) of 1996, determined that LTC policies are to be treated as other health insurance contracts, meaning if the rules outlined are followed, the policy qualifies for favorable tax treatment. To receive this tax-exempt status, the LTC policy must be "qualified" by conforming to standards under HIPAA guidelines set forth by the Internal Revenue Code and adopt certain provisions of the NAIC's long-term care insurance model regulation. -Insurers can sell both qualified and non-qualified LTC policies. Outside of the tax differences, the biggest difference between the two types of policies is what needs to happen before benefits will start. The benefit triggers under a tax0qualified plan are more stringent than those for a nonqualified plan.

Benefit Standards: The North Carolina Department of Insurance adopted the National Association of Insurance Commissioners Medicare Supplement Insurance Minimum Standards Model Act. There are ten standardized Medicare supplement plans that may be sold after June 1, 2010 (Plans A, B, C, D, F, G, K, L, M, and N). The core benefits of these plans include the following:

-The Part A coinsurance for the 61st-90th day in the hospital (currently $335) -The Part A coinsurance for any hospital confinement after the 90th day (currently $670) -The reasonable cost of the first three pints of blood per year -The 20% Part B coinsurance amount -Hospice care -After using all the Medicare hospital inpatient coverage (including the lifetime reserve days) all Medicare-eligible hospital charges will be covered for a lifetime maximum of 365 days

Qualifying for Benefits

-The benefit trigger is an event or condition that must occur before policy benefits become payable. A long-term care policy may condition the payment of benefits on cognitive impairment or the inability to perform activities of daily living. This condition must have been certified by a licensed professional, such as a medical doctor, nurse, or social worker within the previous 12 months. LTC policies issued in North Carolina must specify that an insured must be unable to perform at least two ADLs or be cognitively impaired. -The physical diagnosis of a chronically ill individual is one who has been certified as being unable to perform at least two activities of daily living. Activities of daily living (ADL's) are eating, toileting, transferring, bathing, dressing, and continence, and mobility. A long-term care policy must consider at least five of these ADLs. -The cognitive impairment diagnosis is a deficiency in a person's mental capacities regarding: -Short or long-term memory -Orientation as to person, place, and time -deductive or abstract reasoning -judgment as it relates to safety awareness (require substantial supervision to protect their health or safety) -Long-term care policies must include a description of the procedures for appealing and resolving benefit determinations.

Partnership Plans Designs

-The primary plan design allows the owner of a partnership plan to receive insurance benefits before applying for Medicaid. Under the plan, the insurer reimburses the insured for services that would have been covered by Medicaid if the insured care had been an eligible Medicaid recipient. Those services include nursing home care, home health care, adult day care services, respite care, and supportive home. -A second model of asset protection allows participants to keep all of their assets after receiving insurance benefits for three years of nursing home care, six years of home health care, or a combination of the two (in which two days of home care equal one day of nursing home care).

Medicaid: Income

-The primary way to qualify for Medicaid nursing home and health care benefits, is by passing the means test. The means test verifies that the applicant has limited income and assets and cannot afford the cost of their medical expenses. Income limitations are massed on your Modified Adjusted Gross Income (MAGI). -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 $123,600 of the couples combined community and separate property known as the community spouse resource allowance. - Even if your income exceeds Medicaid income levels in your state, you may be eligible under Medicaid spend down rules. under the spend down process, some states allow you to become eligible for Medicaid as "medically needy," even if you have too much income to qualify. This process allows you to "spend down," or subtract, your medical expenses from your income to become eligible for Medicaid. To be eligible as "medically needy," your measurable resources also must be under the resource amount allowed in your state. To qualify for the ability to "spend down" the person must be under 21, over 65, blind, or disabled. Families with one or both parents absent, dead, disabled, or out of work can also qualify. -Federal law protects spouses of nursing home residents form losing all of their income and assets to pay for nursing home care for their spouse. When one member of a couple enters a nursing home and applies for Medicaid, his or her eligibility is determined under spousal impoverishment rules. Spousal impoverishment helps make sure that the spouse still at home will have the money needed to pay for living expenses by protecting a certain amount of the couple's resources, as well as at least a portion of the nursing home resident's income, for the use of the spouse who is still at home.

Part C & D Enrollment

-Those enrolled in Part A and B can choose to enroll in Part C (Medicare Advantage) or enroll in Part D (prescription Drug Coverage) -When enrolling in Part A and B during your Initial Enrollment Period -During the General Enrollment Period (April 1st - June 30th) if you delayed enrolling in Part B until the Part B General Enrollment Period (January 1st - March 31st). -During the Fall Open Enrollment Period (October 1st - December 7th) -Those enrolled in Original Medicare who wish to change to Medicare Advantage would do so during the fall open enrollment period or during a special enrollment period if they experienced a relocation, change in or qualified for Medicaid or Extra Help with prescription drug costs, became institutionalized in skilled nursing or long-term care hospital, or if you are Switching to a plan with a 5-star overall quality rating -You must be enrolled in Parts A and B to join an Advantage Plan. Upon joining an Advantage plan you would be "switching" to Medicare Part C. -You cannot be enrolled in both Part C and Part D

Part A Enrollment:

-Those not eligible for premium-free Part A coverage must apply during their initial enrollment period or a special enrollment period to avoid a 10% premium increase penalty. -Enrollment in Part B coverage must happen during the initial enrollment period or a special enrollment period to avoid a 10% premium increase penalty for each year the enrollment is postponed. -Those who do not sign up during the initial enrollment period may sign up during the general enrollment period but may face a 10% premium penalty for each year the enrollment was postponed. -For coverage to begin on the first day of the month in which an individual turns age they must enroll during the 3 months leading up to their birthday month -If the individual's birthday is on the first day of the month, and they enroll during the 3 months leading up to their birthday, coverage will begin on the first day of the month prior. -A person who has Part A coverage and TRICARE must have Part B coverage in order to keep their TRICARE coverage, unless the service member is on active duty. Prior to the active duty member's retirement, enrollment in Part B must occur to maintain TRICARE coverage without interruption.

Prohibited Practices

-Twisting: Using misrepresentations or inaccurate comparisons to induce a person to terminate or borrow against their current insurance policy to take out an insurance policy with another insurer -High pressure tactics: Used to induce the purchase of insurance through force, fright, threat, or undue pressure -Cold lead advertising: Failing to disclose that the purpose of the marketing effort is insurance solicitation -Misrepresentation: misrepresenting a material fact in selling a long-term care insurance policy

Problems with Medicaid Estate Planning

-Under the Deficit Reduction Act of 2005, this look-back period has been extended to five years (60 months). Also, the home equity exemption has been limited to $750,000. The ineligibility period is determined by dividing the amount of the asset transfer by the figure Medicaid determines to be the average private cost of a nursing home in the state. -If any assets are left in a Medicaid's recipient's estate, Medicaid can seek reimbursement for benefits it paid by filing a lien or claim against the estate. Assets that were previously exempt when applying for Medicaid (such as a person's home) will be considered part of the estate against which Medicaid may recover. -The resulting number of ineligibility months begins when the applicant: -Is in the nursing home -has spent down the asset limit for Medicaid eligbility -has applied for Medicaid coverage -has been approved for coverage, except for the transfer, as of the date of the initial asset transfer

Items that count towards the coverage gap: Part D

-Your yearly deductible, coinsurance, and copayments - The discount you get on brand-name drugs in the coverage gap -What you pay in the coverage gap.

Conformance with Federal Laws and Regulations The Commissioner can adopt rules to ensure that Medicare supplement policies conform to any requirements imposed by federal law. This includes:

-require refunds or credits if policies do not meet loss ratio requirements -establish a uniform methodology for calculating and reporting loss ratios -assure that the public has access to policies, premiums, and loss ratio information of issuers of Medicare supplement insurance -establish standards for Medicare SELECT policies and certificates -Any other changes required by Congress or the U.S. Department of Health and Human Services, or any successor agency.

What is a Prospective Payment System (PPS)?

A Prospective Payment System (PPS) is a method of reimbursement in which Medicare payment is made based on a predetermined, fixed amount. The payment amount for a particular service is derived based on the classification system of that service (for example, diagnosis-related groups for inpatient hospital services).

Provider Sponsored Organization (PSO)

A Provider Sponsored Organization (PSO) is managed by one or more medical providers. Medical services are received from the plan's provider(s).

Quality Improvement Organization

A Quality Improvement Organization is a group of health care experts, practicing doctors, and consumers organized to improve the quality health care delivered to people across America. QIOs work under the direction of the Centers for Medicare & Medicaid Services to assist Medicare providers with quality improvement and to review quality concerns for the protection of beneficiaries and the Medicare Trust Fund

Medicare medical Savings Account (MSA) Plans

A consumer-directed Medicare Advantage Plan similar to Health Savings Account Plans available outside of Medicare. Medicare MSA Plans combine a high-deductible insurance plan with a medical savings account that you can use to pay for your health care costs.

Reserve Standards and Loss Ratios

A loss ratio is determined by dividing the losses by total premiums received. For long-term care policies th eloss ratio is required to be at least 60% for individual policies and at least 75% for group policies. In evaluating the expected loss ratio and necessary reserves, consideration shall be given to all relevant factors, including: -Statistical credibility of incurred claims experience and earned premiums -Ther period for which rates are computed to provide coverage -Experienced and projected trends -Concentration of experience within early policy duration -Expected claim fluctuation, claims adjustment procedures, and margins in claims costs -Experience refunds, adjustments, or dividends -Renewability features and ability to increase premiums -Interest and expense factors -The types of covered long-term care facilities -Experimental nature of the coverage -Policy reserves -Mix of business by risk classification -Product features such as elimination/waiting periods, deductibles, benefit amounts, and inflation protection. Loss ratio calculations and requirements typically exclude life insurance policies that accelerate benefits for long-term care. A life insurance policy that funds long-term care benefits entirely by accelerating the death benefit is typically considered to provide reasonable benefits in relation to premiums paid. However, the policy must still comply with some of the provisions.

Requirements for Advertising

All long-term care insurance advertisements must be filed with the Commissioner for approval prior to use. The insurer must retain all advertisements for at least three years from the date of firs tuse.

State Workers' Compensation Programs

All states have workers' compensation laws, which were enacted to provide mandatory benefits to employees for work-related injuries, illness, or death. Employers are responsible for providing workers' compensation benefits to their employees. -They are based on the principle that work-related injuries are compensable by the employer without regard to who was at fault. However, the amount of compensation payable is limited and fixed by law. Generally, such compensation encompasses medical care costs, disability income, rehabilitation benefits, and for certain specified injuries, specific lump, and sum benefits. Because of the wide variation among state programs, the laws of each state must be examine to discover available coverages and benefits.

Benefit Limits

Almost all LTC policies set benefit limits in terms of how long the benefits are paid or how much the dollar benefit will be for any one covered care service or a combination of services. Often, one policy will include separate maximum coverage periods or amounts for nursing home care and home health care. In some cases, policies may offer unlimited lifetime coverage. In North Carolina, all LTC policies must provide coverage for at least 12 consecutive months.

Long-Term Care Insurance

Americans are living longer, and many can expect to live a substantial portion of their lives in retirement. That's the good news. The bad news is many individuals over age 65 still must deal with poor health during their retirement years. As people age, they consume a larger proportion of health care services because of chronic illness such as Alzheimer's disease, heart disease, and stroke. The cost of the extended day-in, day-out care some older people need can be staggering. It can cost as much as $75,000 a year or more for nursing home care and upwards of $3,500 a month for home health care aides who come to one's home. As beneficial as Medicare and Medicare supplement insurance are to the elderly in protecting them against the costs of medical care, neither of these programs fully cover long-term custodial or nursing home care. Medicare supplements cover the daily co-payments for nursing home expenses, but not beyond Medicare's 100-day benefit period. Medicaid covers some of the costs associated with long-term care, but a person is ineligible for Medicaid until he is practically destitute. Long-term care coverage is necessary to assist those who have exhausted their Medicare and Medigap coverage but still do not qualify for Medicaid.

Eligibility and Enrollment

An individual can enroll in Part C if the individual has Parts A and B, lives in the plan's service area, and doesn't have ESRD. Individuals with ESRD cannot join a Part C plan. However, an individual who has Part C coverage when ESRD develops can either remain in the plan or join a different plan offered by the insurer. People who have successful kidney transplants may be permitted to join a Part C plan. An individual insured under an employer health plan may also be insured under a Part C plan. In addition to their initial Medicare enrollment period, an individual can enroll into, drop, or change a Part C plan during the following periods.

Private Fee-for-Service Plan (PFFS)

Another Medicare Advantage option is a private fee-for-service plan (PFFS). This type of plan offers a Medicare-approved private insurance plan. Medicare pays the plan for Medicare-covered services while the PFFS plan determines, up to a limit, how much the care recipient will pay for covered services. The Medicare beneficiary is responsible for paying the difference between the amount Medicare pays and the PFFS charges.

Renewability : LTC Policies

As a result of the 1996 Health Insurance Portability and Accountability Act (HIPAA), all long-term care policies sold today must be guaranteed renewable or noncancelable. This means the insurance company cannot cancel the policy and must renew coverage each year, if premiums are paid. A guaranteed renewable policy allows the insurer to raise premiums but only for entire classes of insureds. With a noncancelable policy, premiums cannot be increased.

Filing Requirements

Before an issuer can offer a group policy in this state that has been offered in another state, the insurer must file evidence with the Commissioner that the policy has been approved by another state regulatory authority with requirements similar to those in this state.

Levels and Types of Long-Term Care

Broadly speaking, the kinds of services and support associated with long-term care are provided at three levels: institutional care, home-based care, and community care. Within each of these broad levels are many types of care. Any or all of these may be covered by a long-term care insurance policy. Typical types of coverages are explained in the following: -Skilled nursing care is continuous, around-the-clock care provided by licensed medical professionals under the direct supervision of a physician. Skilled nursing care is usually administered in nursing homes. -Intermediate nursing care is provided by registered nurses, licensed practical nurses, and nurse's aides under the supervision of a physician. Intermediate care is provided in nursing homes for stable medical conditions that require daily, but not 24-hour, supervision. -Custodial care aids in meeting daily living requirements, such as bathing, dressing, getting out of bed, toileting, and so on. -Home health care is care provided in the insured's home, usually on a part-time basis. It can include skilled care (e.g., nursing, rehabilitative, or physical therapy care ordered by a doctor) or unskilled care (e.g., help with cooking or cleaning). Formal caregivers are those associated with a service system, as opposed to family members or friends -Adult day care is designed for those who require assistance with various activities of daily living, while their primary caregivers (usually family or friends) are absent. These day care centers offer skilled medical care in conjunction with social and personal services, but custodial care is usually their primary focus. -Respite care is designed to provide a short rest period for a family caregiver. There are two options: either the insured is moved to a full-time care facility or a substitute care provider moves into the insured's home for a temporary period, giving the family member a rest from his care-giving activities. -Continuing care is a new kind of LTC coverage, continuing care coverage, is designed to provide a benefit for elderly individuals who live in a continuing care retirement community. Retirement communities are geared to senior citizens' full-time needs (both medical and social) and are often sponsored by religious or nonprofit organizations. It provides independent and congregate living and personal, intermediate, and skilled nursing care. It also attempts to create an environment that allows each resident to participate in the community's life to whatever degree desired. Remedial care is NOT a level of long-term care

General statues Ref: Chapter 58, Article 54

Chapter 58, Article 54 applies to all individual policies or group certificates delivered or issued for delivery in North Carolina. The rules do not apply to contracts issued to one or more employers or labor organizations or to the trustees of a fund established for these organizations

Reporting

Each insurer offering long-term care insurance in North Carolina must - Maintain records for each agent of that agent's amount of replacement sales as a percent of the agent's total annual sales - Maintain records of the number of lapses of long-term care insurance policies sold by agents as a percent of the agent's total annual sales - Report annually by June 30th - The 10 percent of its agents with the greatest percentages of lapses and replacements - The number of lapsed policies as a percent of its total annual sales and as a percent of its total number of policies in force as of the end of the preceding calendar year - The number of replacement policies sold as a percent of its total annual sales and as a percent of its total number of policies in force as of the end of the preceding calendar year

Suitability

Each insurer, except an insurer issuing life insurance that accelerates benefits for long-term care, must train its agents in the use of its suitability standards. The insurer also needs to maintain a copy of its suitability standards and make them available for inspection upon request by the Division. To determine whether the applicant meets the standards developed by the insurer, the agent and insurer shall develop procedures that take the following into consideration: -The ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage. -The applicant's goals or needs with respect to long-term care and the advantages and disadvantages of insurance to meet these goals of needs. -The values, benefits, and costs of the applicant's existing insurance, if any, when compared to the values, benefits, and costs of the recommended purchase or replacement.

Medicaid: Additional Qualifications

Eligibility for Medicaid is determined by state requirements in three areas: disability or age, income limitations, and asset limitations. Different qualification programs may also require the applicant to: -Be disabled, blind, or have dependent children who are blind, disabled or pregnant. -Be under the age of 21 or over the age of 65 -Require nursing home care.

Medicare Part B

Financed by the Supplementary Medical Insurance (SMI) Trust Fund, which is funded through general tax revenue and premiums paid by benefit recipients.

Permitted Compensation

First-year commissions or compensations for the sale of a Medicare supplement policy may not exceed 200% of the commission or compensation for selling or servicing the policy in the first renewal year. Subsequent commission or other compensation must be the same as that in the first renewal year and for no fewer than five years. For replacements, no compensation or commission greater than the renewal compensation for the replacing issuer is permitted.

Hospice Care

Hospice care focuses on pain relief for individuals who have a physician diagnosed terminal illness that is expected to result in death within six months. The goal of hospice care is to provide comfort to the individual (and their family) during their last moments of life, not curing the individual. Benefit periods begin the day hospice care begins. -Support services may be provided inpatient or outpatient and include: medical care, nursing care, symptom management (pain relief drugs), social services and family counseling -Available for two 90-day periods followed by an unlimited number of 60-day periods. -To continue to get hospice care, the hospice medical director or other hospice doctor must recertify that the patient is terminally ill, at the start of each period. -Prescription drugs require the lesser of $5 or 5% copayment. -Excludes: Charges for non-medically necessary services, such as television, telephone, private rooms and nursing service (unless medically necessary).

Assignment

If a doctor has accepted a Medicare assignment, the doctor will bill the patient directly. The patient then fills out a Medicare claim form and attaches the itemized bills from the doctor. These providers are known as Non-participating providers or suppliers. Non-participating providers have the option of accepting Medicare assignment or can charge no more than 15% above Medicare approved charge (known as the limiting charge).

Minimum Standards for Home Health Care Benefits

If an insured qualifies to receive care in a nursing home or community residential care facility, the insured must be given the option to receive the necessary care in the insured's home, with a minimum daily benefit of $25. If a policy provides benefits for home health care, it must cover adult day care services and cannot limit benefits to services provided by Medicare-certified providers. A policy providing benefits for home health care services may not limit or exclude benefits by: - Requiring that the insured or claimant would need skilled care in a skilled nursing facility if home health care services were not provided - Requiring that the insured or claimant first or simultaneously receive nursing or therapeutic services in a home or community setting before home health care services are covered - Limiting eligible services to services provided by registered nurses or licensed practical nurses - Requiring that a nurse or therapist provide services covered by the policy that can be provided by a home health aide or by another licensed or certified home care worker acting within the scope of their licensure or certification - Requiring that the insured or claimant have an acute condition before home health care services are covered

Replacement

If the sale will involve replacement, the agent must provide the applicant (at the time of application) a Notice Regarding Replacement explaining the replacing coverage, and that the applicant will have a 30-day free look period for the replacing coverage.

Qualified Disabled and Working Individual (QDWI) Program

If you qualify for QDWI, you get help paying your Part A premium. To qualify for QDWI, you must be entitled to Medicare Part A because of a loss of disability-based Part A due to earnings exceeding Substantial Gainful Activity; have an income not higher than 200% of the FPL, and resources not exceeding twice the maximum for SSI ($4,000 for an individual, and $6,000 for married couple in 2018); and not be otherwise eligible for Medicaid. -Individual monthly income limit: $4,132 -Married couple monthly income limit: $5,572 -Individual resource limit: $4,000 -Married couple resource limit: $6,000

Specified Low-Income Medicare Beneficiary (SLMB) Program

If you qualify for SLMB, you get help paying for your Part B premium. To qualify for the SLMB Program, you must be eligible for Medicare Part A and have an income that is at least 100% but doesn't exceed 120% of the FPL +$20. -Individual monthly income limit: $1,234 -Married couple monthly income limit: $1,666 -Individual resource limit: $7,560 -Married couple resource limit: $11,340

Medicaid Benefits

Individual states design and administer the Medicaid programs through their Department of Public Welfare under broad guidelines established by the federal government. on average, the federal government pays 57% of program expenditures, called the Federal Medical Assistance Percentage (FMAP), but this varies by state based. State Governments cover the remaining percentage for their state.

Cost Sharing :

Individuals with Part B coverage are responsible for paying an annual deductible of $183 and possibly 20% coinsurance (of the Medicare approved amount) for most covered charges, including durable medical equipment. Recipients are responsible for 55% of approved amount for mental health services. Preventative services are typically provided without cost to the recipient by doctors who accepts assignment.

Requirement to Offer Inflation Protection

Insurers are required to offer individuals who buy an LTC insurance policy the option to buy inflation protection so that benefit levels will increase to keep pace with inflation. Benefit levels to be adjusted include benefit maximums or reasonable durations to account for anticipated increases in the costs of long-term care services. The inflation protection option must: - Increases benefit levels annually at a rate of 5% annual -Guarantee the insured the right to periodically increase benefit levels without providing evidence of insurability if the option for the previous period has not been declined -Cover a specified percentage of actual or reasonable charges (without including specified indemnity amount or limit)

Exchange of LTC Policy for LTC Partnership Policy

Insurers must allow individuals who purchased a policy after February 8, 2006, to exchange their current policy for one that qualifies under North Carolina's Qualified Long-Term Care Partnership Policy program by giving policyholders a one-time opportunity to exchange their policies within 180 days after the company begins selling partnership policies in North Carolina.

Elimination Periods : LTC Policies

LTC elimination periods can range from 0 to 365 days, during which period the insured must be confined to a nursing facility. The elimination period is often called the deductible for LTC policies because premiums are lower for longer elimination periods. A long-term care policy with a 30-calendar-day elimination period would begin paying benefits 30 days after the triggering event. A long-term care policy with a 30-service-day elimination period, would not pay benefits until the insured has received 30 days of care

What is Long-Term Care?

Long-term care insurance is a relatively new type of insurance product. However, more and more insurance companies are beginning to offer this coverage as the need for it grows. Most LTC policies pay the insured a fixed dollar amount for each day or month the policy covers, regardless of what the care costs. For example, if the fixed daily dollar amount is $125 and the facility charges $110 a day, the insurance company will pay the full $125 per day. However, if the fixed daily dollar amount is $125 and the facility charges $150 a day, the insurance company will still only pays the $125 per day fixed benefit. This situation would result in the insured needing to cover the $25/day difference in cost vs benefit. A reimbursement policy pays the actual covered expenses up to the daily maximum. Insureds are still responsible for any amount that is over the daily maximum. Insurers offer a wide range of benefit amounts, typically ranging from $40 a day to $200 a day for nursing home care. The daily benefit for at-home care is typically half the nursing home benefit.

Who establishes regional policy guidelines?

MACs establish regional policy guidelines, called Local Coverage Determinations (LCSDs).

Medicare Advantage Special Needs Plans (SNP)

Medicare Advantage specialty plans provide more focused health care for people with specific disabling (chronic) conditions in addition to standard health care services. SNPs are typically for individuals who are insured under Medicare and Medicaid. Typically, a recipient must pay any plan deductible, coinsurance, or co-payment amounts the Medicare SNP charges.

Home Health Care Services : Cost Sharing

Medicare Part B's Home Health Care services only applies when the conditions have not been met for Medicare Part A to cover the expenses. Home health care services cover 100% of medically necessary home health visits by a Medicare approved home health care provider with no maximums. There is no deductible or coinsurance for the patient except for the 20% copay for durable medical equipment.

Medicare Administration

Medicare is administered by the center for Medicare and Medicaid Services (CMS). The CMS contracts with intermediaries, private regional organizations who act as the middle man and enroll providers, process Medicare claims, and investigate fraud.

Determining the Payor

Medicare is the Primary Payor, meaning they are responsible for claims first: -If the individual is retired, even if they have coverage through an employer o runion. -Starting month 31 if an individual has ESRD and also has group coverage. Medicare is the Secondary Payor, meaning someone else is responsible for claims first: - If the individual is currently employed and insured by either their employer or their spouse's employer coverage. -For the first 30 months an individual has ESRD if they also have group coverage through an employer or union. -To "no-fault" insurance, liability, black lung benefits, and workers' compensation.

Medicare Expansion

Medicare now also includes Part C, managed care or Medicare Advantage, and Part D, Prescription Drug Coverage. Medicare Savings Programs (MSPs) receive funds from Medicaid to assist individuals in paying Medicare premiums. Some MSPs pay a portion of Medicare Part A and B deductibles and coinsurance.

Medicare Savings Programs (Medicare-Aid)

Medicare recipients may be able to get help with paying for their Medicare Premiums, deductibles, coinsurance, and copayments if the recipient meets certain conditions. Persons who qualify for QMB, SLMB, or QI also qualify for assistance in paying for Medicare prescription drug coverage (Part D). All limits and benefits can change annually.

Buyer's Guide and Outline of Coverage

Medicare supplement policies must provide an outline of coverage which includes benefits, exclusions, and limitations. The insurer must provide a copy of "Guide to Health Insurance for People with Medicare" by the National Association of Insurance Commissioners and the U.S. Department of Health and Human Services to all applicants.

Medicare Expansion: Managed Care System

Medicare's managed care system consists of a network of approved hospitals, doctors, and other health care professionals who agree to provide services to Medicare beneficiaries for a set monthly payment from Medicare. The health care providers receive the same fee every month regardless of the actual services provided.

Medicare Select, Medicare Supplements, Medigap

Medigap policies (A, B, C, D, F, G, K, L, M, N) and Medicare Select policies are Medicare Supplements which involve private insurers and additional premiums. These are NOT part of Medicare.

General Part A Exclusions

Most routine physicals, eye and hearing exams, dental care, and many other medical products and services. -Many long-term health problems requiring custodial or private nursing care (such as Alzheimer's disease). -Physician Fees, the first 3 pints of blood in a calendar year. -Home health care surpassing 100 days. -Room and Board associated with Hospice Care. -Private duty nursing and private rooms. -Personal hygiene products and hospital amenities such as in room television or telephone.

Pre-existing Conditions : LTC Policies

No LTC insurance policy may use a definition of pre-existing condition that is more restrictive than the definition, a condition for which medical advice was recommended from a health care services provider within 6 months prior to the effective coverage date. Most policies will include a 6 and 6 provision which excludes coverage for six months from the effective date for conditions the insured received medical advice or treatment during the six months preceding the effective date. Any conditions treated or advised on prior to six months before the effective date cannot be excluded. After the policy has been in effect for six months no conditions or treatments normally covered under the policy can be excluded. Policies may not exclude coverage for a loss or confinement that results from a pre-existing condition, unless that loss or confinement begins within six months following the effective date of the insured's coverage. Waivers of coverage of a specific condition applicable to specific insureds are prohibited with group policies. If no-pre-existing condition provision is imposed, a 60-day waiting period may be used.

Original Medicare

Original Medicare provides hospital and medical expense insurance protection people age or older, those who suffer from Chronic Kidney or End Stage Renal disease (ESRD), Amyotrophic Lateral Sclerosis (ALS) or Lou Gehrig's disease, and under certain circumstances, those receiving Social Security Disability Benefits. The Original Medicare plan consists of two parts: Medicare Part A and Medicare Part B.

Psychiatric Care

Part A pays for a lifetime maximum of 190 days in an inpatient psychiatric hospital (instead of a general hospital)

Peer Review Organizations

Peer Review Organizations are medical professionals selected by the government to audit the quality of care received by Medicare Patients.

Nonqualified Policies

Policies that do not meet HIPAA's requirements are known as nonqualified policies. Premiums for nonqualified plans are not tax-deductible. This type of policy has become less common since the passage of HIPAA and is usually seen with older policies. Nonqualified policies may use different ADLs such as ambulating and do not impose a requirement of 90 days of care. Any of these provisions could make it easier to qualify for benefits under a non-tax-qualified policy. Benefit Triggers for non-tax-qualified LTC Plans include: -Unable to perform 2 ADLs "without regular human assistance or supervision." -Cognitive impairment does not need to be "severe" or require "substantial assistance from another individual." -Medical necessity (patient's doctor states that the individual needs care for any medical reason).

Qualified LTC Plans

Policies that meet HIPAA's requirements are known as qualified policies. Premiums for qualified plans are tax-deductible. This is the most common type of LTC policy being sold today. Qualified LTC policies have stricter benefit triggers making it more difficult to qualify for benefits. Benefit Triggers for tax-qualified LTC Plans include: -Benefits require certification by a licensed health-care practitioner that the insured is chronically ill. -Unable to perform 2/6 ADLs for at least 90 days "without substantial assistance from another individual." -Qualified ADLs are limited to eating, toileting, transferring, bathing, dressing, and continence. -Cognitive impairment must be "severe" and require "substantial assistance from another individual." -Individual must require LTC for at least 90 days (considered chronically ill). -A treatment plan must be provided by a licensed medical practitioner. -Medical necessity alone is not a benefit trigger

Tax Benefits of Qualified LTC Plans

Premiums paid by an employer for a group plan can be deducted as a business expense. Group participants whose premiums are paid by their employer cannot deduct the premiums paid by their employer. Premiums for individuals can be deducted on tax Form 1040 Schedule A if you itemize and your unreimbursed medical expenses (including LTC premiums) exceed 7.5% of your adjusted gross incomes. This includes sole proprietors, partners, and limited liability company (LLC) owners but is not applicable for (Flexible Spending Account (FSA) long-term care expenses or to Section 125 cafeteria plans. There is also a limit to how much premium can be deducted based on age.

Medicare and Income Tax All parts of Medicare (A, B, C, D) and Medicare Supplements (Medigap), are viewed by the IRS as a normal medical expense policy and are treated under the same guidelines as any other type of expense in this category. This means:

Premiums paid by the insured are tax-deductible by the insured as medical expenses: - When itemizing deductions; and -When Medical expenses (including premiums) exceed 7.5% of your adjusted gross income Only total medical expenses about 7.5% of your AGI are deducted. -If your AGI was $100,000, your total medical expenses must exceed $7,5000 (7.5% of $100,000) for you to qualify. -Using the same example above, if your total medical expenses (including premiums) for the year is $8,000, only $500 (the amount exceeding 7.5%) is tax deductible. Premiums paid by an employer or union are tax-deductible by the group but NOT by the insured Benefits received under all parts of Medicare (A, B, C, D) and Medicare Supplements (Medigap) are typically received by the insured tax-free, regardless of how the premiums were paid.

Programs for All-inclusive Care for the Elderly (PACE)

Programs for All-inclusive Care for the Elderly (PACE) provide coverage for medical services, long-term care, social services and prescription drug coverage for elderly and disabled individuals in a community setting, such as a nursing home. PACE is provided in states that have elected it as a Medicaid benefit. To be eligible for PACE one must be at least age 55, be state-certified as requiring nursing home care, and reside in a PACE organizations service area.

LTC Services

Qualified LTC services are defined as diagnostic, preventive, therapeutic, curing, treating, mitigating and rehabilitative services. It also includes maintenance or personal care services that are required by a chronically ill individual and are provided under a plan of care established by a licensed health care practitioner.

Skilled Nursing Facility Care

Skilled nursing care is care given by registered nurses or nurses who are supervised by registered nurses at a skilled nursing facility. This type of care must be per doctor orders, in Medicare approved facility, following prior hospital stay of at least 3 days in the last 30 days. -Covered benefits include semi-private room, meals, skilled nursing services, rehabilitation, and physical therapy -Medicare will share cost for up to 100 days each benefit period -Medicare pays 100% of all reasonable charges for the first 20 days and then requires the patient to pay a specified dollar amount or coinsurance (currently $167.50 per day) for days 21-100. -After 100 days the individual is responsible for all costs -Excludes custodial care, long-term care, and assistance performing activities of daily living.

Subrogation

Subrogation allows Medicare to pay for services and then recoup that payment from another responsible party. This is most commonly used when workers compensation or a primary insurance plan does not make an immediate payment. Medicare pays the claim to prevent the beneficiary from using their own money to pay a medical bill or being denied treatment. The payment is considered conditional because it must be repaid to Medicare either by workers compensation, the primary insurer, or another responsible payer.

Suitability or Financial Worksheets

Suitability or Financial Worksheets are used to determine whether issuing long-term care insurance to an applicant is appropriate. This worksheet typically must be completed prior to completing an application. If an applicant does not meet the recommended financial or personal asset suitability test criteria, they should receive a notification letter and be given an option to waive the results of the financial suitability test to proceed with the purchase of the policy. -A life insurance policy that funds long-term care benefits entirely by accelerating the death benefit is typically excluded from these suitability requirements. Ultimately it is the agent's responsibility to ensure the customer is best suited for the proposed purchase or replacement.

Supplemental Security Income Benefits

Supplemental Security Income (SSI) benefits are monthly cash payments to aged (65+), blind, and disabled persons (including children) who have limited income and resources. To be eligible for SSI Benefits, and individual must meet all the following: -Be a U.S. citizen, national, or eligible non-citizen -Be a U.S. resident or a resident of the Northern Marina Islands; -Have less than $2,000 in assets ($3,000 if married). -Must not leave the U.S. for more than one calendar month (30 consecutive days).

Commissioner's Powers

The Commissioner may modify or suspend any provision in an LTC policy if: - It would be in the insureds' best interest. - The change is necessary to develop innovative and reasonable approaches for insuring long-term care. - The policy is to be issued to residents of a continuing care facility or another residential community for the elderly, and the modification or suspension is related to the special nature of such community. - The modification or suspension is necessary to permit long-term care insurance to be sold as part of another insurance product.

Penalties for Violations

The Commissioner may order a person who has violated or is violating any portion of the law to stop marketing a policy or take any actions necessary to comply with the law.

NAIC Model LTC Regulations

The NAIC model addresses such things as: -Policy Renewability (the policy must be guaranteed renewable) -Prohibitions on limits and exclusions -Policy replacement -Policy conversion -Prohibition against post-claims underwriting -Proper marketing standards -A standard format for outline of coverage -A producer's first year's commission for selling a long-term care policy cannot be greater than 200% of the renewal commission in the second year. If a long-term care policy is replaced, the producer may not receive compensation that exceeds what the replacing insurer would pay for renewal policies unless the benefits of the replacement policy are significantly greater than the current policy. -Agents are required to advise prospective buyers that inflation protection is available for an additional premium cost. The law makes this protection automatic unless the buyer rejects it in writing. (Applicants indicate this rejection on the application.)

Utilization Review Committee

The Utilization Review Committee is designed to safeguard against payment for unnecessary or inappropriate medical care given to Medicare recipients. It is responsible for evaluating each admission and ensuring that the admission is necessary and appropriate. Participating hospitals must establish a utilization review committee to ensure the requirements of Medicare are fulfilled in relation to medical necessity, quality of care, appropriateness of treatment, etc. A QIU is used for hospitals that do not establish a Utilization Review committee.

Standards for Additional Benefits

The following additional benefits must be included in Medicare supplement benefit Plans B, C, D, F with High Deductible, G, M, and N. (1) Medicare Part A Deductible: Coverage for one hundred percent (100%) of the Medicare Part A inpatient hospital deductible amount per benefit period. (2) Medicare Part A Deductible: Coverage for fifty percent (50%) of the Medicare Part A inpatient hospital deductible amount per benefit period. (3) Skilled Nursing Facility Care: Coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A. (4) Medicare Part B Deductible: Coverage for one hundred percent (100%) of the Medicare Part B deductible amount per calendar year regardless of hospital confinement. (5) One hundred percent (100%) of the Medicare Part B Excess Charges. Coverage for all of the difference between the actual Medicare Part B charges as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge.

North Carolina Specific Rules and Regulations for Medigap Policies

The marketing of Medicare Supplements is regulated to standardize the coverages offered, standardize disclosures/policy comparisons, and to prevent the sale of excessive insurance. The agent who solicits the application is primarily responsible for determining the appropriateness of a Medicare supplement policy for a proposed insured and must provide every applicant with a suitability form. To verify if replacement is involved in a Medicare Supplement sale, insurance law requires that a question about replacement appear on the application form. The Commissioner shall adopt rules to establish minimum standards for benefits, marketing practices, compensation arrangements, reporting practices, and claims payments under policies.

Loss Ratios: Medicare Supplement Policies

The reasonable loss ratio for Medicare Supplement policies is at least 75% for group contracts and 65% for individual contracts. Insurers are required to annually file rates, rating schedules, and supporting documentation to demonstrate that it is in compliance with the applicable loss ratio standards.

Appeals

To appeal, send a copy of the Medicare Summary Notice (MSN) for the service or prescription in question to Medicare within 120 days. Fast appeals may be made by contacting the local Quality Improvement Organization.

Qualified Medicare Beneficiary (QMB) Program

To qualify for QMB you must be eligible for Medicare Part A, and have an income not exceeding 100% of the federal poverty level (FPL) +$20. This will be effective the first month following the month QMB eligibility is approved. Eligibility is not being retroactive. -Individual monthly income limit: $1,032 -Married couple monthly income limit: $1,392 -Individual resource limit: $7,560 -Married couple resource limit: $11,340 -Help with Part A ad Part B premiums, deductibles, coinsurance, and copayments.

Qualifying Individual (QI) program

To qualify for the QI Program you must be eligible for Medicare Part A, and have an income not exceeding 135% of the FPL +$20. QI programs require an annual application and are approved on a first-come, first-served basis, with priority given to people who got QI benefits the previous year. -Individual monthly income limit:$1,386 -Married couple monthly income limit: $1,827 -Individual resource limit: $7,560 -Married couple resource limit: $11,340 -Help paying your Part B premiums.

Home Health Care

To receive home health care, an individual must be confined to their home and under the care of a doctor. -Provides skilled nursing or therapeutic services in the home performed by a participating Medicare home health agency. -Paid as "first dollar" coverage, meaning the charges are covered 100%, there is no deductible, coinsurance, or cost sharing required. -Allows an unlimited number of home visits as medically necessary, provided they are intermittent and not full-time or constant. -Included physical/occupational/speech therapy, intermittent part-time nursing care, home health aides, medical supplies, medical social services, and 80% of certain durable medical equipment. -Excludes housekeeping services, meal preparation/delivery, shopping, full-time nursing care, blood transfusions, drugs, or biologicals.

Qualifying for Medicaid Nursing Home Benefits

Unlike Medicare, Medicaid does provide for custodial care or assisted care in a nursing home. However, as explained earlier, individuals claiming a need for Medicaid must prove they cannot pay for their own nursing home care. In addition, the potential recipient must: -be at least age 65, blind or disabled (as defined by the recipient's state) -Be a US citizen or permanent resident alien -need the type of care that is provided only in a nursing home -Meet certain asset and income tests However, each state (and even some counties within certain states) evaluates an individual's ability to pay by looking at the nursing home resident's (and spouse's) income and assets. The specific limits for each of these sources vary by state and change annually.

Exclusions of LTC

While organic cognitive disorders, such as Alzheimer's disease, senile dementia, and Parkinson's disease, are almost always included in long-term care insurance policies, the following are excluded from most long-term care insurance policies: drug and alcohol dependency, acts of war, self-inflicted injuries ,and nonorganic mental conditions. Treatments provided by Workers' Compensation, Medicare, and veteran's hospital are usually also excluded as they have already been paid for.

Diagnosis-Related Groups (DRG)

is a system of coding hospital procedures and services for predetermined Medicare payments. They are used to classify hospital patients on the basis of diagnosis consisting of distinct groupings. The payment amount linked to a fixed amount based on the average treatment cost of patients in the "group." When a patient is assigned to a DRG, Medicare pays a predetermined amount to the hospital regardless of what is actually needed for the patient's care. Patients may be assigned to a group based on: - Patient's age, gender -Principal Diagnosis -Treatment given (surgery, rehab, etc.) -Zip code

What is the SSA?

the Social Security Administration (SSA) enrolls individuals in Medicare and processes any premium payments.

Premium Cost:

the monthly Part A premium is $422 for people who are not eligible for premium-free hospital insurance.