Ch. 5* - Private Insurance Plans for Seniors

Question 1

Medicare Supplements

Answer 1

health insurance that provides coverage to fill gaps in Medicare coverage.

Question 2

Medicare Select

Answer 2

a type of Medicare Supplement (medigap) plan sold in some states that can be any of the standardized Medigap plans (A-N) but which requires policy holder to receive services from within a defined network of hospitals and - in some cases - doctors in order to eligible for full benefits

Question 3

Medicare Part D

Answer 3

is a program that offers a prescription drug benefit to help Medicare beneficiaries pay for the drugs they need. The drug benefit is optional and is available to anyone who is entitled to Medicare Part A or enrolled in Medicare part B. This benefit is available through private prescription drug plans (POPs) or Medicare Advantage (PPO) plans.

Question 4

Long-term care insurance

Answer 4

refers to the broad range of medical and personal services for individuals (often the elderly) who need assistance with daily activities for an extended period of time

Question 5

Skilled Nursing Care

Answer 5

is daily nursing care ordered by a doctor; often medically necessary. It can only be performed by or under the supervision of skilled medical professionals and is available hours a day

Question 6

Custodial Care

Answer 6

is the level of health or medical care given to meet daily personal needs, such as dressing, bathing, getting out of bed, and soon. Though it does not require medical training, it must be administered under a physician’s order.

Question 7

Home Health Care

Answer 7

is skilled or unskilled care provided in an individual’s home, usually on a part-time basis

Question 8

Adult Day Care

Answer 8

is a type of care (usually custodial) designed for individuals who require assistance with various activities of daily living, while their primary caregivers are absent. Offered in care centers.

Question 9

Respite Care

Answer 9

a type of health or medical care designed to provide a short rest period for a caregiver. Characterized by its temporary status.

Question 10

Core Benefits

Answer 10

All Medicare Supplement plans cover coinsurance on hospital costs, up to an additional 365 days after Medicare Part A hospital benefits run out.

Question 11

Long-term care partnership programs

Answer 11

the long-term care partnership program is a federally-supported, state-operated initiative that allows individuals who purchase a qualified long term care insurance policy or coverage to protect a portion of their assets that they would typically need to spend down prior to qualifying for Medicaid coverage.

Question 12

Continuing Care

Answer 12

designed to provide a benefit for elderly individuals who live in a continuing care retirement community.

Question 13

Quarter of Coverage

Answer 13

is a basic unit for determining whether a worker is insured under the social security program.

Question 14

The Social Security Act of 1935

Answer 14

was created to provide for the general welfare of United States citizens who are 65 years of age or older. The Act was enacted by the Senate and House of Representatives of the US to enable individual states to make more adequate provisions to furnish financial assistance to the aged, blind, dependent and crippled children, maternal and child welfare, public health, and to establish more adequate provisions for the administration of their unemployment compensation laws; to establish a social security board, to raise revenue; and to provide a basic floor of protection to all working Americans against the financial problems brought on by death, disability, and aging. in 1939 the law was changed to add survivors’ benefits and benefits for the retiree’s spouse and children. In 1956 disability benefits were added. Social Security is an entitlement program, not welfare program. It is based on a “pay now in exchange for benefits later” system.

Question 15

FICA taxes (Federal Insurance Contributions Act)

Answer 15

are used to fund the Social Security program if a person hasn’t contributed through their payroll program, they are not eligible for benefits.

Question 16

Credits

Answer 16

are the determining factor between being classified as fully insured or currently insured. Once a person becomes fully insured, death benefits are extended to his (or her) family. In other words, the family becomes eligible for survivorship benefits. Four credits is the maximum any one person can earn in a given year; therefore, for the 40-quarter rule to apply, an individual must have been employed and have paid FICA taxes for 10 years at least.

Question 17

Fully insured

Answer 17

is a status of complete eligibility for the full range of social security benefits: death benefits, retirement benefits, disability benefits, and Medicare benefits. A person must have contributed for 40 quarters of employment to be fully insured.

Question 18

Currently insured

Answer 18

is under Social Security, a status of limited eligibility that provides only death benefits.

Question 19

OASDI

Answer 19

stands for old age, survivor, and disability insurance, which is more commonly referred to as Social Security. To pay for these programs, the federal government imposes a tax on earned income that must be withheld by your employer. The OASDI deduction on your paycheck shows how much was withheld.

Question 20

Primary Insurance Amount (PIA)

Answer 20

is the benefit (before rounding down to next lower whole dollar) a person would receive if he/she elects to begin receiving retirement benefits at his/her normal retirement age. At this age, the benefit is neither reduced for early retirement nor increased for delayed retirement.

Question 21

Blackout Period

Answer 21

is a period following the death of a family breadwinner during which no social security benefits are available to the surviving spouse.

Question 22

Disability Benefit Qualifications

Answer 22

is when social security uses both medical disability criteria and non-medical criteria to determine whether you qualify for social security disability (SSDI, the program based on work credits) or supplemental security income (SSI, the low-income program). First, you must be able to prove that you are medically disabled.

Question 23

Retirement Benefits

Answer 23

is when social security retirement benefits are only available to covered workers who are fully insured upon retirement. Benefits are paid monthly. If a covered worker retires at the normal retirement age, he or she will receive 100% of the PIA. However, if a covered worker retires early at the age of 62, the maximum Social Security benefits is 80% of the PIA. This reduction remains all through retirement. Retirement benefits pay covered retired workers, their spouses, and other eligible dependents a monthly retirement income.

Question 24

Taxation of Social Security Benefits

Answer 24

states that social security benefits are subject to federal income tax if the beneficiary files an individual tax return and his or her annual income is greater than $25,000. Joint filers will pay federal income tax on their social security benefits if their income is greater than $32,000.

Question 25

In brief, the NAIC model addresses such things as:

Answer 25

policy renewability (the policy must be guaranteed renewable), prohibitions on limits and exclusions, policy replacement, policy conversion, prohibition against post-claims underwriting, requirement to offer inflation-adjusted benefits, proper marketing standards, suitability and appropriateness of the recommended purchase, a standard format for the outline of coverage.

Question 26

Diagnosis of chronic illness can be made on two levels:

Answer 26

physical and/or cognitive. physical is certified as being unable to perform at last 2 ADL. or severe cognitive impairment certified by a physicians within the previous 12 months.

Question 27

LTC age limits

Answer 27

LTC policies typically set age limits for issuing policies. The average age is about 79. However, some newer policies can be sold to people up through age 89. Many policies also set a minimum purchase age. The average is age 50.

Question 28

Disability as defined for social security purposes

Answer 28

describes an employee who is unable to engage in any occupation. The insured has a disability that is expected to result in early death or is expected to last for a continuous period of 12 months.