Lesson 6 - Long Term Care Ins. Flashcards
LTC Services
-Unlike medical, LTC does not attempt to improve the medical condition of the recipient…manage daily activities and lifestyle
Types of Care
Skilled Nursing Care
-level of care that includes services that can only be performed safely and correctly by a licensed nurse (either a registered nurse or a licensed practical nurse), doctor or therapist.
Custodial Care
-non-skilled, personal care, such as help with activities of daily living (eating, bathing, transferring, dressing, toileting, and continence).
Home Health Care
-Care provided at home
Hospice Care
-utilizes a team-oriented approach to address medical, physical, social, emotional, and spiritual needs of the terminally ill.
Adult Day Care Services
-Provide supervision during the day at a community based center while caretaker family members are at work. Programs address the individual needs of functionally or cognitively impaired adults.
Assisted Living Facility
-Residential living arrangements that provides individualized personal care, assistance with activities of daily living, help with medications, and services such as laundry and housekeeping.
Ex. LTC care, medicare, medicaid may provide nursing home coverage NOT health insurance
Paying for LTC
- Medicare
- Medicaid
- Personal assets and savings
- Long-term care insurance
Paying for LTC: Medicare
- fed program that pays for healthcare for over the age of 65 and for people under the age of 65 with disabilities
- generally doesnt cover LTC, will help for short stay in nursing facility, hospice, home health care IF person had recent hospital stay of 3+days, admitted to medicare certified nursing facility within 30 days of prior hospital stay, needs skilled care
- Medicare will pay for some costs UP TO 100 DAYS
Paying for LTC: Medicaid
- Federal/state program that pays for medical assistance for individuals and families with low incomes and resources (each state establishes standards)
- Typically covers: home health care, lab/xray, pregnancy related, pediatric, fed qualified health center services, ambulatory services, screening/diagnostic/treatment for kids under age 21
Medicaid Eligibility Requirements
*must meet general and financial req.
A person must be
- 65 or older
- permanently disabled (as defined by the Social Security Administration)
- blind
- a pregnant woman
- a child, or the parent or caretaker of a child
Income that is considered includes:
-Regular benefit payments such as SS retirement or -disability payments
-Veterans benefits
-Pensions
-Salaries
-Wages
-Interest from bank accounts and certificates of deposit
-Dividends from stocks and bonds
(Food stamps and fed housing assistance not considered)
Asset Requirements Considered: -stocks/bonds -checking/savings -additional vehicles -CDs -real property other than prim. res.
Not Considered:
- one vehicle
- personal property/household belongings
- life ins. with FV under 1500
- up to 1500 set aside for bural
- assets held in spec. kind of trust
- certain burial arrangements
“Look Back” to see if some1 transferred assets to another person less than FMV - 60 months prior to applying for medicaid
Paying for LTC: Personal Assets and Savings
-if LTC needed for a short period of time, self-funding long-term care is a more palatable option. otherwise can be financially devastating
Use of Trusts:
-younger people with severe or permanent disabilities may need LTC - parents set up SPECIAL NEEDS TRUST
Special Needs Trust:
-ensure that benefits available from federal and state agencies are preserved and maintained
Type of SNT is Third Party SNT (aka Family Trust): receptacle for funds from parent, guardian or other fam member…assets in these trusts not counted for determining avail. benefits for bene.
-Trust CANNOT be created to provide food, shelter or any asset that could be converted into food or shelter, such as cash
-CAN provide med treatment, therapy, education, travel, computer equip. - can improve lifestyle of bene and wont interfere with gov benefits.
Example: who should get LTC ins.
Curtis has always had menial jobs and owns a small home and little else.
Celeste has worked as a middle manager her entire career and has pension and Social Security income in addition to a home and a modest amount of savings.
***CELESTE…curtis will prob. qualify for medicaid
LTC Policies: Triggering Events
-Max lifetime benefit/total plan benefit may be years or $$ amounts
-Chronical Illness (triggers LTC policy)
physical or cognitive impairment that:
-Has been certified as such by a qualified health professional within the previous 12 months, and either:
Prevents the insured individual from performing at least two of the six activities of daily living (ADLs) for at least a 90-day period, or
Requires substantial supervision to prevent the insured from posing a danger to himself, herself, or others.
ADLs
- Cannot perform atleast 2
- if cannot perform IADL (instrumental) may not trigger LTC policy…more critical may need other services
Activities of Daily Living (ADL) -Eating -Bathing -Dressing -Transferring -Toileting -Continence (EBDTTC)
Instrumental Activities of Daily Living
- Medicine Management
- Shopping
- Meal Prep
- Housekeeping
- Laundry
- Using transportation
- Handling finances
LTC Policies: option benefits and features (benefits)
LTC policies required to offer optional benefits that insured can elect for….may offer option features
Optional Benefits: (must be offered, but likely pay more)
Inflation protection – maintain the purchasing power of the original contract benefit
Guaranteed Purchase Option – allows the insured to increase the benefits by a state percentage periodically. The downside to this approach is that the premium increases as the benefit is increased and the right to purchase future increases may be lost if one or more purchase options are not taken.
Non-forfeiture Benefit – the guarantee that the insurer must offer that the insured will receive some of the benefits for which the premium was paid, even upon cancellation or lapsed
LTC Policies: option benefits and features (features)
Optional Features
Waiver of Premium – allows the insured to stop paying premiums during the period in which they are receiving policy benefits.
Refund of Premium – the company will refund some or all of the insured’s premiums minus any claims paid under the policy if the policy is canceled.
Restoration of Benefits – Often policies will restore the maximum benefit amount in the event that the insured receives benefits, but the benefits do not exceed a specific period of time, often 180 days.
Bed Reservation – some policies will pay to reserve a bed in the nursing home when the insured leaves to go into a hospital.
Shared Benefits – policies that have this benefit permit a person who has fully exhausted the benefits under his/her own policy to make use of the benefits available under his/her spouse’s policy.
Selecting LTC Policy
The premium - will affect the client from a cash flow perspective.
The period of coverage or total benefits -needs to be sufficient enough, but also not more than is needed, especially if the client also has assets they plan on using to self-fund some of the care
Any inflation adjustment - important since health care costs have been increasing more than general inflation, but will also result in an increased premium.
The elimination (deductible) period- the longer this period the more affordable the policy, but it also requires the client to have assets to self-fund during that period.
Services covered- should cover all services the client is likely to need.
Who is the gatekeeper to determine qualification for benefits - it is important what the process is for applying for benefits
How the benefits are paid- who the benefits are paid to and in what frequency they are paid
What triggers benefits - which events specifically trigger the enforcement of the policy for the client
Need for LTC Insurance
-makes economic sense if the person has assets to protect. Otherwise, the individual would qualify for Medicaid
Ex. key factor in determining the need for long-term care
=Inability to perform activities of daily living.
Qualified Long Term Care Insurance
- deductibility of premiums paid and taxability of proceeds received
- Tax-qualified long-term care insurance policies are treated as health insurance for federal income tax purposes and are therefore deductible for federal income tax purposes
-If paid for by an employer, the employer may deduct the premium cost as an employee benefit. The employees will not be required to report the value received in their incomes for the year. **long-term care contracts cannot be provided as a benefit under CAFETERIA PLANS
To meet criteria of Qualified LTC Policy:
- benefits limited to long term care services
- must not provide a cash surrender value or access to funds that can be paid, assigned, borrowed or pledged as collateral
- Refunds may be only used to reduce future premium
***EX Q) For a long-term care policy to be considered a qualified plan, the plan must be guaranteed renewable and offer inflation protection and a non forfeiture benefit. The contract does NOT need to offer to cover pre existing conditions.
