Long-term care policies
loss ratio
Benefits under long-term care 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 long-term care insurance risk
outline of coverage
An outline of coverage must be delivered to an applicant for an individual long-term care insurance policy at the time of application. In the case of direct response solicitations, the insurer must deliver the outline of coverage upon the applicant's request, but regardless of request must make such delivery no later than at the time of policy delivery.
shoppers guide
Every insurer providing long-term care insurance in North Carolina must, before sale, deliver a shopper's guide to every applicant. The guide must be in the format developed by the National Association of Insurance Commissioners (NAIC).
LTC services
Home health care; Respite care; Adult day care; Care in a nursing home; and Care in an assisted living facility
intermediate care
Intermediate Nursing Care is 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. Intermediate care is less specialized than skilled nursing care and it usually involves more personal care
Pre-existing conditions( six ans six provision)
No long-term care insurance policy may 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 6 months preceding the effective date of coverage of an insured person. No long-term care insurance 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.
LTC coverage
Nursing home care; Home health care; Respite care; Hospice care; Personal care at home; Services in assisted living facilities; Services in adult day care centers; and Services in other community facilities.
skilled care
Skilled care is health care given when the patient needs skilled nursing or rehabilitation staff to treat, manage, observe, and evaluate the care. Examples of skilled care include 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 short-term basis (up to 100 days). This care is usually needed 24 hours a day, must be ordered by a physician, and must follow a plan of care. Individuals usually get skilled care in a nursing home but may also receive it in other places.
length of benefit period
The length of the benefit period is also referred to as maximum benefit limit. It limits the total benefit paid over the life of the policy. This limit may be written in years or dollars.
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.
custodial care
is care to help individuals meet personal needs such as bathing, dressing and eating. It is also known as personal care. Someone without professional training may provide custodial care.
homemaker services
means supportive services provided by qualified paraprofessionals 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. These standards must, at a minimum, meet standards established by the North Carolina Division of Social Services and may include assistance in management of household budgets, planning nutritious meals, purchasing and preparing foods, house-keeping duties, consumer education, and basic personal and health care.
acute condition
means that the individual is medically unstable and requires frequent monitoring by a medical doctor or registered nurse.
personal care
means the provision of hands-on services to assist an individual with activities of daily living.
policy summary
The policy summary is a summation of selected features of an insurance policy prepared and attached to the policy by the insurer for delivery to the policyowner/insured.
transferring
means moving into or out of a bed, chair or wheelchair
factors of outline of coverage
A description of the principal benefits and coverage provided in the policy; A statement of the principal exclusions, reductions, and limitations contained in the policy A statement of the renewal provisions, including any reservations in the policy of a right to change premiums; and A statement that the outline of coverage is a summary of the policy issued or applied for, and that the policy should be consulted to determine governing contractual provisions
premiums
A long-term care insurance 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. An insurance company cannot cancel or fail to renew coverage because 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. The form should include the following information: The applicable premium rate and premium for the policy; Rate schedule adjustments - the company will provide a description of when premium rate or rate schedule adjustments will be effective on the next billing date; and Potential rate revisions
activities of daily living (ADLs)
Bathing; Eating; Dressing; Toileting; Continence; and Transferring
LTC Standards
Be cancelled, nonrenewed, or otherwise terminated on the grounds of the age or the deterioration of the mental or physical health of the insured individual; Contain a provision establishing a new waiting period in the event existing overage is converted to or replaced by a new or other form within the same company, except with respect to an increase in benefits, voluntarily selected by the insured individual; or Provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care. An individual long-term care insurance policyholder has the right to return the policy within 30 days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason.
replacement policies
If a policy replaces another policy, the replacing insurer must waive any time periods applicable to pre-existing conditions and probationary periods in the new policy for similar benefits to the extent that similar exclusions have been satisfied under the original policy.
Renewability
In North Carolina, all long-term care policies must be guaranteed renewable. Guaranteed renewable 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 Policy requirements
Long-term care insurance policies must provide benefits for a least 3 levels of care and provide the same duration for each level of care for a minimum of 12 months. The loss ratio is required to be at least 60% for individual policies and at least 75% for group policies. Custodial care that is administered for assistance of the patient in performing the activities of daily living may not be denied based on the type of facility in which the care is received, but rather must be provided as long as the insured is confined as an inpatient in any facility licensed by the State, regardless of whether or not that facility is commonly understood to be or is defined as a longterm care facility. No long-term care policy, contract, or certificate may use waivers to exclude, limit, or reduce benefits for specifically named or described pre-existing diseases or physical conditions.
exclusions
Long-term care policies do not cover the following: A mental or nervous disorder or disease, other than Alzheimer's disease or other dementia; Alcohol or drug addiction; Illness or injury caused by an act of war; Treatment the government has provided in a government facility or already paid for; Attempted suicide or intentionally self-inflicted injuries; Services provided in an acute care unit of a hospital; Basic Medicare Supplement coverage; Basic hospital expense coverage; Basic medical-surgical expense coverage; Disability income protection coverage; Accident only coverage; Hospital confinement indemnity coverage; Specified disease or specified accident coverage; Participation in a felony, riot, or insurrection; Service in the armed forces or units auxiliary thereto; and Aviation activity as a non-fare-paying passenger
elimination period
Long-term care policies usually include an elimination period similar to those found in disability income policies. This elimination period 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 define the 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.
inflation protection
No insurer may offer a policy unless the insurer also offers to the applicant the option to purchase a policy that provides for benefit levels to increase with benefit maximums or reasonable durations that are meaningful to account for reasonably anticipated increases in the costs of long-term care services covered by the policy.
daily/ monthly benefit
Policies pay benefits by the day, week or month 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%).
Wavier of premiums
Premium waiver 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
tax considerations
Premiums can be included with other annual uncompensated medical expenses for deductions from income in excess of 10% of adjusted gross income (AGI) up to a maximum amount adjusted for inflation (or 7.5% if either the insured or his/her spouse is age 65 or older);
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 North Carolina 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 North Carolina 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 long-term care worksheet and disclosure notice of issues an applicant should know before buying long-term care insurance must be completed and provided before an application is taken.
benefits
are payable if the insured is unable to perform 2 of the activities of daily living 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.
hands on assistance
e means physical assistance (minimal, moderate or maximal) without which the individual would not be able to perform the activities of daily living
continence
e means 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).
chore services
include the performance of tasks incidental to activities 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 own 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.
home health care
is care provided by a skilled nursing or other professional services in one's home. Home health care includes occasional visits to the person's home by registered nurses, licensed practical nurses, licensed vocational nurses, or community-based organizations like hospice. Home health care might include physical therapy, occupational therapy, speech therapy, and medical services by a social worker.
Minimum age for LTC
is often advised to buy long-term care insurance at a younger age. The minimum age to apply for long-term care insurance is 18 years old. The partnership between LTC coverage and Medicaid works by disregarding some or all assets of applicants for Medicaid who have exhausted private LTC benefits and by exempting those assets from estate recovery after the insured's death. The partnership program was created to encourage those who would not otherwise do so to purchase LTC insurance, to reduce the incentives to transfer assets to qualify for Medicaid sooner, and to contain Medicaid spending on LTC services
cognitive impariment
means a deficiency in a person's short or long-term memory, orientation as to person, place, and time, deductive or abstract reasoning, or judgment as it relates to safety awareness
supervised living facility for developmentally disabled adults
means a residential facility which has 2 to 9 developmentally disabled adult residents Whenever long-term care 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 organic brain disorder syndrome, progressive dementing illness, and primary degenerative dementia 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.
Long-term care (LTC)
means 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. Long-term care is different from traditional medical care. Long-term care helps a person to continue living in his or her current health condition. It may not help improve or correct medical problems
eating
means feeding oneself by getting food into the body from a receptacle (such as a plate, cup or table), by feeding tube or intravenously
toileting
means getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene
dressing
means putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs
respite care, non-institutional
means 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
respite care, institutional
means 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
bathing
means washing oneself by sponge bath, or in a tub or shower, including the task of getting into and out of the tub or shower
financial or suitability worksheet
must be submitted with an application for long-term care insurance. The Personal Worksheet 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.
mental or nervous disorder
will not be defined to include more than neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease or disorder.