Long-Term Care

Lifetime Maximum Limits

Also directly correlated with premium is the amount of time in which benefits are payable by the insurer. It is important to choose a policy that is both affordable and provides enough LTC coverage for what an individual might expect in the future. An insurance agent's job is to help determine the correct amount of coverage based on his or her evaluation of the applicant.

Custodial Care

Although it must be given under a doctor's order, this category does not require services to be performed by a medically trained individual. These services include bathing, dressing, getting out of bed and toileting, to name a few services. Long-term care assistance can be administered within a nursing home or adult day-care center; however, most long-term care is administered at the home of the patient, also known as 'custodial,' or residential care.

Guaranteed Renewable and Non-Cancellable

As a requirement of HIPAA, as long as premiums are paid, all LTC plans must be guaranteed renewable and non-cancellable. An insurer cannot make any other changes to a LTC policy once it becomes effective.

Fixed Payments

As an example, if an insured's fixed LTC indemnity payment is $150 per day, but the insured's LTC costs are only $120 per day, the insurer still pays the insured the entire $150 daily benefit amount as long as LTC coverage is needed.

Nursing Facilities - Adult Day Care and Assisted Living

Assisted living centers also known as 'nursing homes,' are available for individuals who require substantial assistance in daily living activities and provide a variety of healthcare services, as well as a group living environment, versus seclusion for individuals who are 'homebound,' or have lost the ability to live alone. The difference between nursing facility care and skilled nursing care is dependent on the type and extent of care required by a patient.

Traditional LTC vs. Partnership Policy

Both traditional policies and Partnership policies provide long-term care coverage; however, in comparison to a traditional LTC policy, a Partnership policy is more highly regulated by the state, it provides a tax deduction to consumers and it includes an additional benefit known as 'Medicaid Asset Protection.'

Hospice Care and Respite Care

Considered an optional benefit of LTC, it provides for the control of pain and provides a comfort of living for terminally ill patients. Respite care allows for the temporary medical care of a dependent that allows for the primary caregiver, usually family member, to receive a short period of time 'off' from providing care, whether for a few hours per day or for a period of a few weeks. The dependent is either cared for within their residence or at a medical institution.

Group Contract

LTC insurance can also be provided to members of a group. As with life and health insurance, a group LTC policy is issued to by the insurer to the sponsor of the group who serves as the master policyholder and issues certificates of LTC coverage for participating members of the group. Upon termination from the group, an individual must have the right to continue or convert to an individual LTC policy without requiring evidence of insurability.

Individual Contract

LTC insurance can be purchased on an individual basis where the policy is paid for by the individual and provides coverage directly to the individual for whom the policy is written, or can be written as an endorsement (rider) to a life insurance policy. LTC premiums are determined by the age and medical history of the applicant. Generally speaking, the younger the individual, the lower the LTC premium required.

LTC Benefit Payments

Long-term care insurance policies provide benefits through either fixed dollar amounts or expense-incurred amounts. LTC benefit payments are based on a per-day basis to cover the daily LTC expenses incurred by the insured individual.

Asset Disregard

Medicaid eligibility is adjusted for enrollees in a Partnership policy, disregarding personal assets in determining Medicaid eligibility.

Home Health Care

Medically-necessary care conducted by a registered nurse is often performed within the home of the patient, in comparison to care within a hospital. This type of rehabilitative service is designed to help patients readjust to everyday living, commonly provided after a stay in the hospital. This type of in-home skilled nursing care provides both rehabilitation, as well as daily living assistance, if necessary.

Waiver of Premium

Most LTC policies include a waiver of premium provision that waives an individual's need to pay premium while receiving LTC benefits. This option is usually effective once a patient has been under the care of a licensed physician for a period of at least 90 days of confinement.

Non-qualified LTC plans

Non-qualified LTC plans do not require such diagnosis, nor any other specific requirement since it is not mandated under the federal tax code, unlike a qualified LTC plan. While such plans do not receive favorable tax treatment, individuals who do not qualify for a qualified LTC plan, based on the individual's medical diagnosis, often do qualify for a non-qualified LTC plan.

Qualified LTC

Qualified LTC plans are federally qualified for tax benefits when such plans stipulate that covered individuals must be diagnosed as chronically ill, whether such illness is physical or cognitive, unless prior hospitalization occurred and the individual is considered acutely ill. Chronic physical illness includes the inability of two or more of an individual's daily activities for a period of at least 90 days, such as feeding, toileting, bathing dressing and mobility. In order to qualify as cognitively impaired (a deficiency in the ability to think or reason), an impairment diagnosis must be certified by a physician within the previous 12 months.

Intermediate Nursing Care

Similar to skilled nursing care, 'intermediate' long-term care is also offered at nursing homes by registered nurses under the supervision of a physician, but without around-the-clock care.

Skilled vs Non-Skilled Nursing Care

Skilled nursing care requires the care of a licensed nurse under the orders of a physician; whereas, non-skilled nursing care pertains more to the personal daily living assistance, known as the Activities of Daily Living (ADL) of a patient including bathing, feeding, administering medicine and general maintenance of the patient.

Expense-Incurred Payments

Some insurers now follow an expense-incurred basis that covers the actual charges that were incurred in comparison to a fixed dollar amount.

Elimination Periods

The elimination period in an LTC policy is often referred to as a 'time deductible,' and can range from zero to 365 days. Generally speaking, the longer the LTC's elimination period, the lower the LTC's premium, as well as, the longer the LTC's benefit period, the higher the LTC's premium.

Specified Exclusions

The following are almost always excluded from LTC policies: acts of war, self-inflicted injuries, and drug and alcohol dependency.

Medicaid Asset Protection

To qualify for Medicaid, an individual's income and personal assets determine his or her eligibility. Low or no income individuals who cannot afford to cover long-term care costs after LTC coverage has been exhausted typically qualify for Medicaid; however, since eligibility is also based on an individual's personal assets, in cases where an individual's assets exceed state Medicaid eligibility levels, such assets prohibit the individual from Medicaid eligibility. As a result, in order to qualify for coverage, an individual would need to sell off his or her assets in an attempt to 'spend down' to a level low enough to qualify for Medicaid.

Skilled Nursing Care

Usually administered at nursing homes, this type of long-term care involves around-the-clock care by a licensed medical professional under the supervision of a certified physician.

Daily Benefit Limits

Whether fixed or expense-incurred, payments provided by an LTC policy are limited to a daily maximum. Expenses that exceed policy maximums are the responsibility of the insured. Determining the correct daily maximum benefit level is commonly based on the average LTC costs within the geographic area of the insured.

Medicaid Estate Recovery

in which the state reimburses itself for the costs it incurs by a Medicaid recipient through the recovery of the recipient's personal assets and savings. States mandate such recovery of costs for all individuals age 55 and older who receive Medicaid benefits such as nursing facility services, home and community-based services, and related hospital and prescription drug services.

Total Asset

protects all assets if an individual needs to apply for Medicaid after exhausting all Partnership LTC coverage. Under total asset protection, all assets (not income), are protected from Medicaid spend down and estate recovery. I

Dollar-for-Dollar

provides asset protection equal to the amount paid out in benefits from the Partnership policy, up to the policy's benefit limit.

Long-Term Care (LTC) Insurance

provides coverage for expenses associated with custodial care and assisted living for individuals who have lost the ability to remain completely independent. LTC coverage provides care, usually for a period 90 days or more, and can be provided by an adult care center, nursing home or at an individual's home. While some LTC policies offer unlimited lifetime coverage, most plans limit coverage periods from 3 to 5 years, often with limited benefit amounts.

National Reciprocity Compact

allows participating states to opt in and out of their reciprocity agreement at any time within 60 days' notice. If a state opts out of reciprocity, individuals who have already accessed Medicaid continue to qualify for coverage. If a state's Partnership program ceases to exist in the future, a resident who purchased a Partnership policy prior to such date would still be eligible to receive earned asset protection under the state's Medicaid program.