Health Insurance Exam- Unit 21: Long-Term Care
An insured must receive care for a stated number of days before a long term care policy can pay benefits. This time deductible is known as the A. elimination period B. waiting period C. benefit period D. enrollment period
A
Benefit amounts in a long-term care policy are usually expressed as A. dollars per day B. dollars per month C. dollars per quarter D. dollars per year
A
Individuals that need assistance from time to time but can live more independently than people who need custodial care may need A. assisted living care B. respite care C. home health care D. intermediate care
A
all of the following are activities of daily living EXCEPT A. working B. eating C. dressing D. toileting
A
All of the following are levels of facility based long-term care EXCEPT A. skilled nursing care B. intermediate care C. custodial care D. adult day care
D
All of the following statements about a nonqualified long-term care insurance policy are true EXCEPT A. they do not receive favorable tax treatment B. premiums are not deductible C. benefits are taxed as income D. HIPPA prohibits the sale of these policies
D
Which of the following is NOT considered an activity of daily living? A. Transferring B. Dressing C. Bathing D. Driving
D
all of the following are exclusions in LTC insurance policies EXCEPT A. drug abuse B. self-inflicted injuries C. mental illness D. Alzhemier's
D
Marketing standards for long-term care policies require a free look period of? A. 15 days B. 30 days C. 45 days D. 60days
B
optional benefits
*Guaranteed insurability -Allows insured to raise daily benefit & buy additional coverage -No medical questions -Uses insured's attained age -Not currently receiving benefits *Nonforfeiture -Cash value or return of percentage of premiums -Minus claims paid -Policy has been surrendered or has lapsed for nonpayment of premiums *Inflation protection -Yearly increase in benefit coverage by a stated percentage based on cost of living adjustment (COLA) -Simple -Compound
benefit amount--how much?
*Indemnity-Stated dollar amount per day *Reimbursement-lesser of actual expense or daily benefit *Home care—if covered usually 50% of facility amount (comprehensive policy) *Policy may have a lifetime maximum *Higher the benefit, higher the premium
elimination period
*Insured qualifies for benefits *Benefits not paid until end of period *Time deductible *Longer the elimination period, lower the premium ------ -insured must receive care for a stated number of days before the policy begins to pay
state LTC partnership programs
*Joint effort -Insurance companies -State insurance department -State's Medicaid agency *Benefits -Dollar-for-dollar asset protection ------------- -Many middle-class families have too much money to qualify for Medicaid but can't afford to self-insure the potential catastrophic costs of long-term care -In an effort to encourage more people to purchase long-term care insurance, the Deficit Reduction Act of 2005 (DFA) created the Qualified State Long Term Care Partnership program. -State long-term care insurance partnership programs are a joint effort of: ■ commercial insurers, who develop, market, and issue the policies and pay their benefits; ■ a state's insurance department, which regulates the companies and producers who sell the policies; and ■ the state Medicaid agency that provides the policy with unique asset protection features. -A partnership program works this way: An individual purchases a LTCI partnership policy meeting the requirements for that state -If benefits are needed the LTCI policy will pay and the state Medicaid program does not have to cover the cost -If the policy benefits are exhausted due to a long time need for care and the insured needs to apply to Medicaid, they are not obligated to spend down all their assets to qualify -Under what is called the dollar-for-dollar approach, this person may keep assets equal in amount of the benefits received under the partnership policy and the assets are exempt from Medicaid estate recovery and so are preserved for their heirs.
qualified LTC insurance
*Receives favorable tax treatment -Benefits are paid tax free -Premiums may be tax deductible *Requirements to be a qualified policy -Benefit triggers: inability to perform at least two ADLs for at least 90 days or cognitive impairment requiring substantial supervision, certified by a physician -Guaranteed renewability -Coverage of only long-term care expenses -No benefits for expenses reimbursable under Medicare -No cash surrender value -Any dividends or refunds of premiums must be used to offset future premiums or increase benefits -Conforms to specified consumer protection marketing and benefit standards
exclusions
*War or acts ofwar *Alcohol or drug abuse *Self-inflicted injuries *Treatment provided without cost to the insured *Mental illness and nervous disorders without a demonstrable organic cause --Dementia or Alzheimer's is covered
LTC insurance coverage
*bought from an insurance company *insured chooses type & amounts of coverage *protect assets upon death ------------- -With a long-term care policy individuals can plan for their future needs -They can select the long-term care they will receive by choosing the amount and type of policy benefits; they can maintain financial independence and preserve assets for their heirs.
other types of care
*home health care--skilled medical & therapy services performed in the ind. home by visiting home health aides *adult day care--provides company, supervision, along with social & recreational support for people whose grown children care for them at home but need to work during the day *respite care--connection with hospice care; professionals care for someone temporarily in order to give a few days rest to the family member or friend who usually provides the care *assisted living facilities--people who need assistance form time to time, but can live more independently than people with custodial care -provide housing, meals, & help with personal care -some offer social programs & medical care
benefit period--how long?
*minimum 12 months *usually 2-5 years *longer benefit period, higher the premium *may choose lifetime w/ lifetime maximum amount *benefit end when limit has been reached *longer the benefit period--higher the premium
medicaid's LTC coverage
*safety only for the poor *income paid to medicaid *may take assets from the person's estate upon death ------------ -Medicaid covers the type of long-term care most people need, but only if they are impoverished -This is in keeping with Medicaid's purpose of providing a safety net for the poor -Many of the elderly Americans whose long-term care costs are paid by Medicaid did not start out poor. They spent themselves into poverty paying for their own long-term care -Once they are on Medicaid, all of their income except for a small monthly allowance must go to help pay for their care -After a Medicaid beneficiary dies, Medicaid has the right to recover the amount of benefits it paid on that person's behalf from assets in the deceased beneficiary's estate
LTC regulations
*similar to medicare supplement ins. regulations *Marketing -Provide applicants with a shopper's guide and outline of coverage -Consider whether the purchase is suitable for the applicant's needs, objectives, and circumstances -Determine whether the sale will involve replacement --Notice Regarding Replacement -30-day free-look period -Advertising is not misleading -Describe the policy's renewal conditions on its first page. *Standards -The policy must be at least guaranteed renewable -A sale must include an offer of inflation protection -A pre-existing condition may not be defined more restrictively than a condition for which medical advice or treatment was sought within six months before the policy's effective date -Long-term care policies cannot condition payment of benefit on a prior hospital stay -Group long-term care insurance policies must give insureds the opportunity to continue benefits if membership in the group ceases or to convert to individual coverage if coverage terminates -Insureds must be protected against unintentional lapse by giving the insurer the name of another individual to whom a premium due notice will be sent if the policy enters its grace period
medicare's long-term care coverage
*skilled are only in nursing home -requires prior 3-day hospital stay -medicare pays 100% for first 20 days -beneficiary has a daily co-pay days 21-100 -no medicare coverage after 100 days ------------- -One of the largest costs involved in long-term care services is custodial care, which includes assistance with personal care or supervision -Medicare does not pay for these costs except under specific circumstances. -Medicare assistance is available for short-term stays in a skilled nursing facility, for hospice care, and for home health care as long as the insured has recently been in the hospital at least three days and has been admitted to a Medicare-certified nursing facility within 30 days after the hospital and skilled nursing, physical therapy, or other skilled care is needed. -costs for skilled care in a nursing home are covered for up to 100 days -The first 20 days are covered 100% by Medicare. -However, the insured is responsible for a daily co-payment for days 21 through 100, and there is no Medicare coverage after 100 days -Hospice care, other than grief counseling, is covered if the insured has a terminal illness and is not expected to live more than six months. -Medicare also provides some home and other care services as long as they are medically necessary to treat an injury or illness -As long as a doctor, every 60 days, determines this care is medically necessary, there is no time limit on how long the care may be received. -Medicare supplement insurance plans also do not cover long-term care needs such as custodial care, adult day care, care for those with Alzheimer's disease, or assisted living.
levels of care
*skilled nursing care (24/7)--provided on around-the-clock basis and can be performed only by licensed nurses under a doctor's orders *intermediate care (only 7)--intermittent (less than round-the-clock) care performed by licensed nurses nursing under a doctor's orders. *custodial care--help in performing ADLs & can be performed by someone without medical training
ind. vs. group LTC contracts
-The advantages and disadvantages of individual versus group long-term care insurance are the same as those for individual versus group insurance generally -Group insurance offers lower rates and people can get coverage without providing evidence of insurability -Group insurance plans however, are not tailored to meet individual needs because the employer chooses the plan coverage for all the participants.
underwriting considerations LTC
-Underwriting factors for long-term care insurance differ from those used for other health insurance plans -Ex. people with heart disease or diabetes would be rated as substandard risks under a health insurance plan -But because long-term care insurance policies focus on aging people, a different underwriting classification would be used for this condition. -The main issue for long-term care policies is whether an individual can perform the activities of daily living (ADLs) and to what degree of proficiency -If heart disease condition does not interfere with one's ability to perform the ADLs, they would be rated as a standard risk for a long-term care policy. -Conversely, a person in otherwise great health who walks with the use of a cane may not be eligible for long-term care insurance.
cognitive impairment
-benefit eligibility/triggers *insured has a cognitive impairment *ability to perceive, reason, or remember *safety concerns ------------- -Tests administered by medical practitioners or social workers can measure an individual's ability to perceive, reason, or remember -Benefits are triggered when the cognitive impairment requires someone to be supervised for their own safety or the safety of others.
activities of daily living (ADLs)
-benefit eligibility/triggers *measurements to determine someone's ability to live independently *bathing *dressing *toileting *transferring *continence--bladder & bowel control *eating ------------- -insureds become eligible for benefits under a long-term care insurance policy if they are unable to perform some number of the ADLs by themselves. Generally, the number is two, but policies can vary.
long-term care
-long-term care insurance is usually purchased as a means to pay for some or all of the services that can stem from a long or chronic illness, disability, or cognitive impairment like Alzheimer's disease -Often, the services that are most needed are those that assist with the Activities of Daily Living (ADLs) which include bathing, dressing, eating, transferring, using the toilet, and caring for incontinence. -Long-term care and health care focus on sometimes overlapping issues: health care provides ways to improve a person's health, while long-term care provides services based on the condition as it stands currently -While the average life span has increased to 84 years, so have the costs for nursing homes, assisted living, skilled care, and other care associated with the aging process -Assisted living facilities can range from the mid-five figures, at a minimum, to hundreds of thousands of dollars annually, depending on the type of facility and care needed -Premiums for long-term care insurance can be expensive -They are based on the applicant's age, health, and the level of benefits, coverage, and options chosen.
In regards to underwriting considerations of long-term care policies, the key decision is based on A. family and personal health history B. whether an individual can perform the activities of daily living C. current occupation D. marital status
B
Medical or rehabilitative care performed on an intermittent basis is known as A. home health care B. intermediate care C. custodial care D. adult day care
B
The elimination period may be thought of as a A. dollar amount deductible B. time deductible C. dollar amount co-payment D. time co-payment
B
All of the following are optional benefits in a long-term care insurance policy EXCEPT A. inflation protection B. nonforfeiture benefits C. elimination period D. guaranteed insurability
C
All of the following statements regarding tax treatment of long-term care insurance are true EXCEPT A. premiums paid by self-employed people are tax deductible up to an age-based limit B. employers who pay long-term care insurance premiums on behalf of their employees may deduct them as a business expense C. employer paid premiums are tax deductible to employees D. benefits received from a qualified long term care insurance plan are received income tax free up to a certain amount
C
The type of care that provides assistance with the activities of daily living performed by unskilled helpers is known as A. home health care B. adult day care C. custodial care D. intermediate care
C
Which of the following is excluded in a long- term care insurance policy? A. Alzheimer's disease B. Dementia C. Nervous disorder without organic cause D. Mental illness with organic cause
C