Chapter 8: Long-Term Care Policies
Activities of Daily Living (ADLs)
-1.) bathing -2.) eating -3.) dressing -4.) toileting -5.) continence; and -6.) transferring -Personal Care (aka "Custodial Care") helps an individual with ADLs -personal care is less involved than skilled care, and may be given in many settings
LTC Benefit Period
-LTC policies also defined "xxxxxxx xxxxxxx" for how long coverage applies, after the elimination period -The XXXXXX XXXXXXX is usually 2 TO 5 YEARS, with a few policies offering lifetime coverage -the LONGER the XXXXXXX XXXXXX, the HIGHER the PREMIUM will be
LTC Elimination Period
-LTC policies usually include an xxxxxxxxx xxxxxxx similar to those found in disability income policies -this window is usually 30 days or more in which the insured must be confined in a nursing home facility before benefits will begin -LTC policies also defined "Benefit Period" for how long coverage applies, after the elimination period -The benefit period is usually 2 TO 5 YEARS, with a few policies offering lifetime coverage -the LONGER the BENEFIT PERIOD, the HIGHER the PREMIUM will be
LTC Premiums
-LTC policy must include a statement that premium rates may change, unless the policy specifies that the insurer does not have the right to change the premium -insurance co cant cancel or fail to renew coverage b/c of a change in a person's health or age -as long as premiums are paid, and benefits have not been exhausted, coverage will continue -insurers must provide the applicant a "Potential Rate Increase Disclosure Form"
Cognitive Impairment
-a deficiency in a person's short or long-term memory, orientation as to person, place, and time, deductive or abstract reasoning, or judgement as it relates to safety awareness
LTC Additional Features: Nonforfeiture
-a policy feature that returns at least part of the premiums to the insured if the insured cancels the policy or lets it lapse -no policy may be used in NC unless it provides for an offer of nonforfeiture, which may not be less than an offer of: -reduced paid-up insurance benefits -extended term insurance benefits, or -shortened benefit period -no policy may pay a cash surrender value unless the dividends or refunds are applied as a reduction of premiums or an increase in future benefits -no policy may be used in NC unless the insurer has developed a financial or personal asset suitability test to determine whether or not issuing long-term care insurance to an applicant is appropriate -a personal LTC worksheet and disclosure notice of issues an applicant should know before buying LTC insurance MUST be completed and provided BEFORE an application is taken
Supervised Living Facility for Developmentally Disabled Adults
-a residential facility which has 2 to 9 developmentally disabled adult residents
LTC Additional Features: Waiver of Premium
-additional feature that permits the insured to stop paying the premium once the insured is eligible for benefits and the insurance company has begun to pay benefits -some companies waive the premium as soon as benefits begin -other companies wait until benefits have been received for 60 to 90 days
Custodial Care
-aka Personal Care -care to help individuals meet personal needs such as bathing, dressing, and eating -someone without professional training may provide custodial care
LTC Partnerships
-allow those who have exhausted or at least used some of their private LTC benefits to apply for Medicaid coverage without having to meet the same means-testing requirements
Long-Term Care (LTC) Insurance
-any policy advertised, marketed, offered, or designed to provide coverage for not less than 12 CONSECUTIVE MONTHS for each covered person... ....On an: -expense incurred -indemnity -prepaid, -or other basis.... ....For one or more medically necessary: -diagnostic -preventive -therapeutic -rehabilitative -maintenance, or -personal care services, provided in a setting OTHER THAN an acute care unit of a hospital LTC includes group and individual policies whether issued by: -insurers -fraternal benefit societies -nonprofit health, hospital, and medical service corporations -prepaid health plans -health maintenance organizations, or -any similar organization NC defines LTC as: -"any contract of insurance offering institutional and non-institutional support to restore deteriorating health and to maintain functional independence"
LTC Benefit Eligibility
-benefits are payable if the insured is unable to perform 2 OF THE 6 ADL, and -it is expected that the condition will last for at least 90 DAYS, or -the insured needs substantial supervision due to a severe cognitive impairment Policies may cover the following: -nursing home care -home health care -respite care -hospice care -personal care at home -services in assisted living facilities -services in adult day car centers; and -services in other community facilities -some policies pay benefits to family members who give care in the home
LTC Loss Ratios
-benefits under LTC insurance policies will be deemed reasonable in relation to premiums, provided that the expected loss ratio is at least: -60% for individual policies, and -75% for group policies, and -is calculated in a manner that provides for reservation of the LTC insurance risk
Intermediate Care
-care that provides a level of care between assisted living and skilled nursing -it is targeted to individuals not capable of independent living, yet not in need of 24-hour nursing care -this type of care is needed for people in a stable condition who require daily care, but not round-the-clock nursing supervision -such care is ordered by a doctor and supervised by registered nurses -this type of care is LESS SPECIALIZED than nursing care and it usually involves more personal care
LTC Incontestability Period
-for a policy that has been in force for LESS THAN 6 MONTHS, an insurer may rescind the policy or deny an otherwise valid LTC insurance claim 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 6 MONTHS but LESS THAN 2 YEARS, an insurer may rescind the policy or deny an otherwise valid LTC insurance claim upon showing 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 2 years, the policy is not contestable upon the grounds of misrepresentation alone -the policy may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts to the insured's health -if an insurer has paid benefits under a policy, the benefit payments may NOT be recovered by the insurer if the policy is rescinded
Skilled Care
-health care given when the patient needs skilled nursing or rehab staff to treat, manage, observe, and evaluate the care Ex: -intravenous injections and physical therapy -it is given in a Skilled Nursing Facility (SNF) -care that can be given by non-professional staff is NOT considered skilled care -people do not usually stay in a SNF until they are completely recovered -Medicare covers certain skilled care services that are needed daily on a short-term basis (up to 100 days) -LTC policies will provide coverage for skilled care when the Medicare benefit stops -the policy usually pays a daily amount for each day that the insured is in a SNF
LTC Premium Increase
-if a premium rate or premium rate schedule increases, the insured must be notified of the new premium amount and be able to exercise at least one of the following options: -1.) pay the increased premium and continue the policy in force as is -2.) reduce policy benefits to a level such that premiums will not increase (subject to State law minimum standards) -3.) exercise a nonforfeiture option if purchased (this option is available for purchase for an additional premium); or -4.) exercise contingent nonforfeiture rights (this option is available if a separate nonforfeiture option is NOT purchased
LTC: Guaranteed Renewable
-in NC, all LTC policies must be xxxxxxxxxxx xxxxxxxxxx -this means that the insurance company guarantees the opportunity to renew the policy -it does NOT mean that the policy is guaranteed renewable at the SAME PREMIUM -premiums can be raised by class -no individual can be singled out for a rate increase -insurance companies have the option of making policies noncancellable, as well -this means the company cannot cancel the policy or raise the premiums
LTC Tax-Deductions
-in a tax-qualified policy, out-of-pocket LTC expenses will be allowed as itemized deductions to the extent that they and other unreimbursed medical expenses exceed 10% of the insured's adjusted gross income, and 10% for taxpayers 65 and older (through 2019) -benefits paid under a federally qualified plan are NOT taxable if the amount paid does not exceed the Federal per diem amounts ($420 in 2019) -policies paying benefits based on actual incurred amounts are also exempt from taxation -policies approved as LTC insurance before Jan. 1, 1997, are grandfathered under the Act; -therefore, premiums paid for these policies are also subject to favorable tax treatment
Core Services
-includes the performances of tasks incidental to activites of daily living that do NOT require the services of a trained homemaker or other specialist Such services are provided to enable individuals to remain in their homes and may include such services as assistance in meeting basic care needs such as: -meal preparation -shopping for food and other necessities -running necessary errands -providing transportation to essential service facilities -and care and cleaning of the house, grounds, clothing, and linens
Noncancellable Policy
-insurance companies can make policies xxxxxxxxxxx, meaning the company CANNOT cancel the policy OR raise the premiums
Acute Condition
-means that the individual is medially unstable and requires frequent monitoring by a medical doctor or registered nurse
Transferring
-moving into or out of a bed, chair or wheelchair -1 of the 6 ADLs
Potential Rate Increase Disclosure Form
-must be provided to applicants Form should include the following information: -1.) applicable premium rate and premium for the policy -2.) rate schedule adjustments; the company will provide a description of the premium rate or rate schedule adjustments will be effective on the next billing date; and -3.) potential rate revisions
Hands-On-Assistance
-physical assistance (minimal, moderate or maximal) without which thh individual would not be able to perform the activities of daily living
Benefit Frequency
-policies pay benefits by the day, week or month Ex: -in an expense incurred plan, a policy might pay a daily nursing home benefit of up to $200/day or $6,000/month, and weekly home care benefit of up to $1,400 per week -some policies will pay one time for single events, such as installing a home medical alert system -insurance companies offer benefit options -if the policy covers home care, the benefit can be a portion of the benefit for nursing home care (50% to 100%
Home Health Care
-provided by a skilled nursing or other professional services in one's home Includes: -home visits by a registered nurse -licensed practical nurses -licensed vocational nurses, or -community-based organizations like hospice MIGHT include: -physical therapy -occupational therapy -speech therapy, and -medical services by a social worker
Homemaker Services
-supportive services provided by qualified para-professionals who are trained, equipped, assigned, and supervised by professionals within the agency to help maintain, strengthen and safeguard the care of the elderly in their own homes Services may include: -management of household budgets -planning nutritious meals -purchasing and preparing foods -house-keeping duties -consumer education, and -basic personal and health care
Continence
-the ability to maintain control of bowel and bladder function, or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene (including caring for catheter or colostomy bag)
Maximum Benefit Limit
-the length of the benefit period is also referred to as xxxxxx xxxxxx xxxxx -it limits the total benefit paid over the life of the policy -this limit may be written in YEARS OR DOLLARS
LTC: Minimum and Maximum Ages
-the minimum age to apply for LTC insurance is 18 years old -while there is NO SET MAXIMUM age limit to apply for LTC, the higher the age, the higher the premiums -those who have begun receiving LTC services, are generally not eligible for LTC insurance
Respite Care, Institutional
-the provision of temporary support to the primary caregiver of the aged, disabled, or handicapped individual by taking over the tasks of that person for a limited period of time -the insured receives care for the respite period in an institutional setting such as a nursing home, family care home, rest home, or other appropriate setting
Respite Care, Non-Institutional
-the provision of temporary support to the primary caregiver of the aged, disabled, or handicapped individual by taking over the tasks of that person for a limited period of time... -in the home of the insured or an appropriate community location
LTC Tax Considerations
-to be "qualified," LTC policies must adhere to regulations established by the National Association of Insurance Commissioners (NAIC) -among the requirements are that the policy must offer the consumer the options of INFLATION and NONFORFEITURE PROTECTION, although the consumer can choose not to purchase these features -policies purchased before January 1, 1997, will be grandfathered and treated as "qualified" as long as they have been approved by the Insurance Commissioner of the state in which they are sold
LTC Policy: Additional Features
-waiver of premium -inflation protection -nonforfeiture -financial or suitability worksheet
LTC Additional Features: Financial or Suitability Worksheet
-worksheet that must be submitted with an application for LTC insurance -it is an attempt to review the client's income and assets to determine if the minimum suitability standards are met -the applicant and the producer must complete, sign, date, and submit the worksheet with the application -By NC law, the insurance company must fill out part of the information on the worksheet and ask the applicant to fill out the rest to help them decide if the applicant should buy the policy
LTC Additional Features: Inflation Protection
Insurers must offer to each applicant, at the time of purchase, the option to purchase a policy with an inflation protection feature no less favorable than one of the following: -1.) increases benefit levels in a manner so that the increases are compounded annually at a minimum of 5% -2.) guarantees the insured individual the right to periodically increase benefit levels without providing evidence of insurability or health status as long as the option for the previous period has not been declined -3.) covers a specified percentage of actual or reasonable charges and does not include a maximum specified indemnity amount or limit Insurers must include the following information with the outline of coverage: -1.) a graphic comparison of the benefit levels of a policy that increases benefits over the policy period with a policy that does NOT increase benefits. The graphic comparison must show benefit levels over at least a 20-year period -2.) any expected premium increase or additional premiums to pay for automatic or optional benefit increases; and -3.) disclose the magnitude of the potential premiums the applicant would need to pay at ages 75 and 85 for benefit increases -inflation protection MUST BE INCLUDED unless an insurer obtains a rejection of inflation protection signed by the applicant
LTC vs Traditional Medical Care
LTC is different from Traditional Medical Care: -LTC helps a person to continue living in his or her current health condition -it may not help improve or correct medical problems LTC insurance is one way to pay for long-term care. It does NOT INCLUDE any policy that is offered primarily to provide: -basic Medicare Supplement coverage -basic hospital expense coverage -basic medical-surgical expense coverage -hospital confinement indemnity coverage -accident only coverage -specified disease coverage -specified accident coverage, or -limited benefit health coverage
Pre-Existing Conditions: Six and Six Provision
No LTC policy may use a definition of "pre-existing condition" that is more restrictive than the following: -"a condition for which medical advice or treatment was recommended by or received from a provider of health care services within 6 MONTHS preceding the effective date of coverage of an insured person" No LTC policy may exclude coverage for a loss or confinement that is the result of a pre-existing condition UNLESS such loss or confinement BEGINS WITHIN 6 MONTHS following the effective date of coverage of an insured person
Skilled Nursing and Rehabilitation Staff
Staff includes: -registered nurses -licensed practical and vocational nurses -physical and occupational therapists -speech-language pathologists, and -audiologists
LTC Services
The following are long-term care services: -home health care -respite care -adult day care -care in a nursing home, and -care in an assisted living facility -LTC may also include care management services, which evaluate needs and coordinate and monitor the delivery of services
State Mandated Benefits
The following are requirements for LTC policies in NC: big ol list, page 4, check it out
LTC Insurance Act
The purpose of the LTC Insurance Act is to do the following: -1.) promote the public interest -2.) promote the availability of LTC insurance policies -3.) protect applicants for LTC insurance from unfair or deceptive sale or enrollment practices -4.) establish standards for LTC insurance -5.) facilitate public understanding and comparison of LTC insurance policies; and -6.) facilitate flexibility and innovation in the development of LTC insurance coverage
Alzheimer's Phrases
Whenever LTC insurance provides coverage for: -organic brain disorder syndrome -progressive dementing illness, or -primary degenerative dementia, -such phrases will be interpreted to include Alzheimer's disease -clinical diagnosis of those^ disorders must be accepted as evidence that such conditions exist in an insured when a pathological diagnosis cannot be made... ...provided that such medical evidence substantially documents the diagnosis of the condition and the insured received treatment for such condition
