Assignment 12 - Long-Term Care

Question 1

personal care or supervision needed by persons of any age for an extended period of time.

Answer 1

long-term care (LTC)

Question 2

It is poor planning to rely on the Medicare program because its objective is to pay for acute illness where __________; consequently, the program pays LTC expenses under very limited conditions

Answer 2

recovery is expected

Question 3

The primary objective of the ______ is to help low-income families with their medical expenses even though it has unintentionally become the largest third-party payer for nursing homes and long-term care

Answer 3

Medicaid program

Question 4

The advantages to employees for having LTC insurance available are:

Answer 4

• (a) It can help protect their savings and assets from the high cost of care should they ever face an LTC event.
• (b) It may support them as caregivers since many policies extend provider discounts and other support services to family members.

Question 5

The advantages to employers of offering LTC insurance are:

Answer 5

• (a) It allows employers to enhance their existing benefits package.
• (b) It may curtail lost productivity when employees assume caregiving roles at the expense of workplace responsibilities.
• (c) It allows any premium contributions made by an employer to be deducted as a business expense.

Question 6

Under a true group LTC plan, the employer is the _____ and employees are issued _______. The employer may choose to include retirees, spouses, adult children, parents/in-laws and siblings as part of the eligible group. True group is generally a better match for larger employers.

• (a) Availability of guaranteed issue for eligible, actively at-work employees
• (b) No minimum participation requirements
• (c) Fully portable coverage
• (d) Low group rates, in many cases, with a rate guarantee period
• (e) Transfer of reserve capabilities
• (f) Turnkey approach to enrollment and administration
• (g) Employer-dedicated website to support enrollment.

Answer 6

policyholder

certificates of insurance

Question 7

individual insureds are the policyholders and are issued individual policies. This approach may be attractive to smaller employers or those wishing to give employees greater flexibility in customizing their coverage. The approach may offer the following advantages:

• (a) simplified underwriting,
• (b) preferred health and spousal/family member discounts,
• (c) broker-assisted enrollments, and
• (d) list and split billing.

Answer 7

multilife (individual insurance) policy

Question 8

What two claims-paying approaches are offered by LTC carriers?

Answer 8

** reimbursement approach** and the disability approach

Question 9

Most LTC policies pay benefits for care received in nursing homes, assisted living facilities, adult day care centers and the claimant’s home. When selecting LTC insurance, employers should carefully consider plan features. The following features are the primary determinants of plan cost (4):

Answer 9

• The daily benefit
• The lifetime maximum benefit
• The policy’s waiting (elimination) period
• Inflation options.

Question 10

The three inflation options available in the LTC market are the following:

Answer 10

• future purchase option,
• automatic benefit increase approach
• consumer price index (CPI) option

Question 11

LTC insurance benefits can be offered on a ______ basis or be ______, depending on the size of the employer’s population. Larger groups, generally over 1,000 employees, are the best candidates for ______

Answer 11

guaranteed issue

underwritten

guaranteed issue

Question 12

A small deviation in actual experience relative to pricing assumptions can result in a large difference in the level of required premium. Therefore, pricing assumptions should be set conservatively. This process is known as including

Answer 12

“provisions for adverse deviations” (PADs).

Question 13

Beyond the basic and optional plan design features, an employer should also consider the following key policy provisions:

Answer 13

• (a) Guaranteed renewable provision
• (b) Portability
• (c) 30-day free look
• (d) Coordination of benefits

Question 14

The four basic approaches to LTC insurance financing are:

Answer 14

• (a) Voluntary plans
• (b) Employer-paid
• (c) Executive carve-out
• (d) Core plus buy-up

Question 15

Benefit eligibility is triggered under an LTC insurance policy when an insured becomes either ____ or _____ and has fulfilled a waiting period requirement.

Answer 15

functionally dependent or cognitively impaired

Question 16

LTC is one of the most extensively regulated products in the insurance marketplace. The basis of regulation is the Model Act and Regulations developed by the ______

Answer 16

National Association of Insurance Commissioners (NAIC).

Question 17

established to encourage individuals to take more personal responsibility for their LTC costs.

Answer 17

LTC partnership plans

Question 18

Some of the consumer protection (5) provisions for LTC insurance included in the NAIC models are:

Answer 18

• (a) Third-party billing notification
• (b) Policy reinstatement provision
• (c) Contingent nonforfeiture
• (d) Independent third-party review
• (e) Timely payment of claims

Question 19

Upon receipt of the policy, an insured has 30 days to decide whether to continue with the plan. If the insured decides not to take the coverage, all premiums paid will be refunded.

Answer 19

30-day free look

Question 20

Most LTC insurance is sold on this basis, meaning the carrier cannot cancel coverage for any reason (other than nonpayment of premiums), unilaterally change the coverage, or raise rates on a single person for any reason.

Answer 20

(a) Guaranteed renewable provision—

Question 21

Most LTC policies contain a ______ provision that governs which policy pays first in the case of multiple policies or coverage.

Answer 21

(d) Coordination of benefits—

Question 22

this benefit allows an insured to keep reduced paid-up coverage in the event of a substantial premium rate increase.

Answer 22

Contingent nonforfeiture—

Question 23

allows the insured to request reinstatement if an impairment resulted in failure to pay premiums, resulting in a lapse of coverage.

Answer 23

Policy reinstatement provision—