Module 6 Flashcards
Power of Attorney - def & main features 2
A written document executed by one person (the principle) authorizing another (attorney-in-fact) to act on his behalf
Must be a written document
Must be structured and established prior to incapacity
Attorney-in-fact - def
Receives authorization
Principle - def
Gives authorization
General power of attorney - main features
Ends upon the incapacity of the principle, thus making it an ineffective tool for incapacity planning. Useful for giving someone temporary authority to do something such as buying a house.
Durable power of attorney - main features
Does not cease upon the incapacity of the principle, thus making it an effective tool for incapacity planning
Springing power of attorney - def
The agent’s authority begins upon incapacity of principle
Conservator - def
An guardian appointed by a court to be a fiduciary to manage the financial and property affairs of someone who is legally incapacitated (such as a minor) or mentally incapacitated, as proven by a court.
Disadvantages of conservatorship 2
Court may require a competency hearing for incapacitated adults
May have hefty legal fees
Living will - def
A revokable will giving life-sustaining medical directives related to hydration, respiration, and nutrition.
Durable power of attorney for health care (medical proxy) - def
A revocable written document in which the principle authorizes a named person to make health care decisions on the principal’s behalf in the event of incapacity.
Medicare part A - Eligibility requirements 4
Age 65 and eligible for social security
Age 65 and dependent or survivor of a person entitled to part A
After entitlement to disability benefits for 24 months
U.S. citizens age 65+ enrolled in part B paying for part A
Medicare - general def
Government provided health insurance not affected by assets or income consisting of multiple parts: A for Hospital, B for physician, and D for drugs.
Medicare part A - benefits 5
Hospitalization Skilled nursing care Home health care Hospice Blood
Medicare part A - gaps 3
Deductible
Co-payment
Costs beyond benefits provided (extended medical stays, long term care, etc.)
Medicare Part A - Cost to patient 5
Days 1-60 - $1156 deductible
Days 61-90 - $289 per day co-pay
Days 91-150 - $578 per day co-pay (one time 60 day use)
Medicare part B - eligibility requirements 2
All persons eligible for part A
U.S. citizens over age 65 paying premiums
Medicare part B - benefits 7
Physician services In and out patient medical services and supplies Physical and speech therapy Ambulance Home health care Hospital outpatient Blood
Medicare part B - Gaps 3
Deductible
Coinsurance costs greater than medicare-approved charges
Care not provided - routine physicals, eyeglasses, hearing aids, dental care, prescriptions, outside hospital, vaccines, nursing home
Medicare part B - costs to patient 4
Medical services - $140 annual deductible + 20% co-pay of the approved amount
Home health care - $0 for services, 20% for durable medical equipment
Outpatient hospital care - same as medical services
Blood - first 3 pints + 20% of remaining amount
Medicare part D - Benefit
Prescription drug coverage
Annual costs to patient 4
Deductible - $320
Co-pay - $652.50 for $2610 of coverage
Donut hole - $3727.50
Excess of donut hole - 5% copay
(costs reset annually!)
Actual charge - def
Amount physician will charge
Approved amount - def
Amount medicare will base its payment on (which may be less than the actual charge)
Benefit period - def
Relating to part A, how many days an individual will be covered. Starting on the day that the individual receives covered care and ending 60 consecutive days after he leaves the facility.
Co-insurance - def
The portion or percentage of the medicare-approved amount that the beneficiary pays
Deductible - def
the amount of expense a beneficiary must first incur before medicare begins payment for covered services
Excess charge - def
The difference between the medicare-approved amount for a service or supply and the actual charge
Medicare Advantage Plan - def
Medicare part C created by the balanced budget act of 1997, which includes policies from Health Maintenance organizations (HMOs), Preferred provider organizations (PPOs), and Provider Sponsored Organizations (PSOs)
Eligibility requirements for Medicare Advantage Plans (Part C)
- Enrolled in Medicare parts A and B
- Cannot have End-stage renal disease
- Must live in an area where a Medicare Advantage plan is available
Advantages of Medicare Advantage Plan (part C) 4
- Cover benefits not covered by traditional medicare (drugs and eyeglasses)
- Predictable out of pocket costs
- No need for a medigap policy
- greater emphases on preventive care
Disadvantages of Medicare Advantage Plan (Part C)
- Benefits may be limited, or denied, if network providers are not used
- Benefits are limited to emergency care if outside the service area
- HMOs can terminate programs
Short term disability income insurance - def
Provides benefits for disabilities for up to two years (generally six months) and has a waiting period of 0-7 days. Generally only available in a group policy.
Long term disability coverage - def
Disability insurance that protects for a longer period of time, usually until age 65 in the case of an illness and until life in the event of an accident. Waiting periods are 30 days - two years.
Occupational Classification - def
The risk category the insurance company’s underwriters put people into, determined by occupation. Going from poor to best: blue collar, white collar, professional.
Any occupation (disability) - def
Only pays benefits if the individual is incapable of performing any occupation
Modified any occupation (disability) - def
Only pays benefits if the insured is incapable of performing any work appropriate to his level of training, education, and pay.
Own occupation (disability) - def
Pays benefit if the insured is incapable of performing his own occupation
Elimination period - def
The the period after a claim is submitted and before the policy will pay out benefits. Like a deductible in that it makes the insured pay for part of the costs before benefits are paid.
Probation period - def
The period of time the policy must be inforce before it will cover certain perils. This protects the insurer from providing benefits for preexisting conditions
Max benefit that a high-income applicant is likely to be offered in a disability policy
2/3 of gross income excluding bonuses and stock options
Residual disability - def
Makes up for lost income when the insured is unable to work full-time. Pays benefits in proportion to the income lost and often requires a period of total disability.
Key policy features in selecting an LTC policy 4
- Elimination period
- Max benefit period
- Daily benefit amount, and
- Inflation protection
Role of Medicare in LTC
Not much. May provide care after a stay in a hospital, but the nomber of covered nursing home days and hours-per-day are limited
ADLs - def and implication for receiving LTC benefits
- Dressing
- Bathing
- Toileting
- Continence
- Transferring (chair to bed, bed to chair)
- Eating
Inability to perform any two of these ADLs triggers benefits.
Health Savings Account (HSA) - def
A tax exempt trust or custodial account established by an individual or employer with a bank or insurance company for the purpose of paying qualified medical expenses of the owner, his spouse, or dependents.
Advantages of HSAs for an individual 4
• An individual may claim an income tax deduction for cash contributions made to an HSA, even if he doesn’t itemize deductions.
Interest and earnings on amounts held in an HSA accumulate tax free
• Employer contributions to an HSA on behalf of an employee-account owner do not result in taxable income
• Distributions from an HSA to an account owner are tax free as long as they are used to pay for qualified medical expenses.
Advantages of HSAs for an employer 4
- Employer contributions are deductible for income tax purposes
- Employer contributions to an are not subject to payroll taxes
- EMployee salary ralary reduction contributions may be made to the HSA feature that is part of an employer-sponsored cafeteria plan. Salary reduction contributions are not subject to payroll taxes
- Employers may be able to redesign their existing health plans to take advantage of the HSA rules.
