21 - Long-Term Care

Question 1

Activities of Daily Living (ADLs)

Answer 1

Least to most impared person:

• bathing - in a tub, shower or by sponge bath
• dressing
• toileting
• transferring - getting out of bed and into a chair, moving around the house
• continence - bladder and bowel control
• eating

Question 2

Cognitive Impairment

Answer 2

A person may be elibible for long-term care insurance if they are cognitively impared.

Medical practitioners or social workers can measure a persons ability to perceive, reason, or remember.

Benefits are triggered when the impairment requires someone to be supervised for their own safety or the safety of others.

Question 3

What are the three levels of long-term care?

Answer 3

1. Skilled nursing care (24/7) - is provided on a round the close basis and can be performed only by licensed nurses under doctor’s orders
2. Intermediate care (only 7) - is intermittent (less than round the clock) care performed by licensed nursing under doctor’s orders
3. Custodial care - is helping in performing ADLs and can be performed by someone without medical training

Question 4

Types of care

Answer 4

• Home health care - refers to skilled medical and therapy services performed in the individual’s home by visiting home health aides.
• Adult day care - provides company, supervision, along with social and recreational support for people whose grown children care for them at home but need to work during the day.
• Respite care - is similar to that provided in connection with hospice care; professional scare for someone temporarily in order to give a few days rest to the family member or friend who usually provides care.
• Assisted living facilities - are for people who need assistance from time to time, but can live more independently than people who need custodial care. These facilities provide housing, meals, and help with personal care.

Question 5

Long-Term Care Benefit Period

Answer 5

How long:

• Minimum 12 months
• Usually 2-5 years
• May choose lifetime
• Subject to lifetime maximum amount
• Longer the benefit period-higher the premium

Question 6

Long-Term Care Benefit Amount

Answer 6

• Benefit amounts are usually expressed as dollars per day.
• If the policy is comprehensive - it provides coverage for both facility-based and home-based care. The home care amount is usually stated as 50% of facility amount
• Reimbursement if less of the actual expense or daily benefit
• Policy may have a lifetime maximum
• Higher the benefit, higher the premium

Question 7

Elimination Period

Answer 7

• The insured must receive care for a stated number of days before the policy begins to pay
• Benefits not paid until end of period
• Time deductible
• Longer the elimination period, lower the premium

Question 8

Optional benefits

Answer 8

• Guaranteed insurability
  
  • Allows insured to raise daily benefit
  • No medical questions
  • Uses insured’s attained age
  • Not currently receiving benefits
• Nonforfeiture benefits
  
  • Cash value or return of percentage of premiums
  • Minus claims paid
  • Policy has been surrendered or has lapsed for nonpayment of premiums
• Inflation protection
  
  • Provides for an automatic annual benefit increase based on COLA
    
    • Cost of Living Adjustment

Question 9

Long-Term Care Qualifications

Answer 9

• Must be unable to perform 2 out of the 6 ADLs
• Must be certified by a health professional as having a chronic illnedss that will last for a minimum of 90 days
• Must have severe cognitive impairment requiring substantial supervision
• 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 a specified consumer protection marketing and benefit standards

Question 10

Long Term Care - Taxes

Answer 10

• Benefits are received income-tax free up to a specified amount that is indexed for inflation (for indemnity policies) or the actual amount of expenses incurred (for reimbursement policies).
• Premiums paid by self-employed people are tax-deductible up to an age-based limit that is indexed for inflation.
• Not self-employed, may include their long-term care insurance premiums, up to the age-based limit, in their itemized medical expenses which are deductible to the extent they exceed a certain percentage of the person’s gross income.
• Employers who pay long-term premiums on behalf of their employees may deduct them as a business expense.
  
  • Employer paid premiums are not taxable income to their employees.

Question 11

Long-Term Care Minimum Benefit Standards

Answer 11

• the policy must be at least guaranteed renewable
• the sale must include an offer of inflation protection (option to raise the limits of coverage due to inflation)
• a pre-existing condition may not be defined more restrictively than a condition for which medical advice or treatment was sought within 6 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 individual coverage if coverage terminates
• insureds must be protected against unintentional lapse by giving the insurer the name of another individual whom a premium due notice will be sent if the policy enters it’s grace period

Question 12

Marketing standards for long-term care policies require a free look period of?

Answer 12

30 days

Question 13

What level of care is less than round-the-clock care performed by licensed nurses nursing under a doctor’s orders?

Answer 13

Intermediate Care