Long Term Care Insurance

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Long-Term Care Insurance includes many different services that help people with chronic conditions overcome limitations that keep them from being independent. Long-term care insurance helps individuals maintain their levels of functioning, rather than improving or correcting medical conditions. If individuals have physical illnesses or disabilities, they will often need hands-on help with their activities of daily living (ADLs). These ADLs include bathing, continence, dressing, eating, toileting and transferring. If individuals have cognitive impairments, they usually need supervision, protection or verbal reminders to do their everyday activities. Skilled care and custodial care are the terms most often used to describe long-term care and the type or level of care you may need.

Long-term care insurance is designed to help pay for an individual's long-term care expenses. Depending on the plan you choose, it may pay part or all of your care.

Long-term care insurance policies are not standardized like Medicare Supplement Plans. Instead, companies are selling policies that combine a variety of benefits and coverage in different ways. Policies may also be complicated. Every insurance company must define its terms, benefits, and exclusions in the policy. Companies must deliver to a prospective buyer an "Outline of Coverage" which helps to explain these terms. Bottom line: Be thorough when shopping for long-term care coverage.

You should understand what services the long-term care insurance policy covers and the many types of long-term care services you might need. Some long term care insurance policies cover only stays in nursing homes. Others cover only care in your home. Still others cover both nursing home and home health care. Many long term care policies also include coverage for adult day care centers, assisted living centers or other community facilities. Home health care coverage also varies. Some long term care insurance policies pay benefits only for skilled nursing care performed in your home by registered nurses, licensed practical nurses, and occupational, speech, and/or physical therapists.

When you apply for a long-term care insurance policy, you will have a choice in designing your policy. You decide on:

the daily benefit amount,
the maximum benefit period, and
the elimination period that would best suit your needs.

The benefit may be a set dollar amount or may be stated as the number of years, months or days you will receive benefits. However, before the benefits start, you must satisfy an elimination period, which is the length of time you must wait after entering a nursing home or using home care before benefits from your policy will begin. The elimination period will range from zero to 180 days.

From the Florida Department of Financial Services website:

"Consumer Alert Although a company cannot exclude coverage for named diseases and conditions, such as Alzheimer's disease, it has the right to refuse to sell you coverage if you have failing health. Therefore, it is wise to consider your long-term care needs while you are in good health."

Articles:

	What is a Tax Qualified Long-Term Care Insurance Policy?
	What if I can't afford a Long-Term Care Policy?
	What is a Long-Term Care Partnership Program Policy?
	What is the advantage of a Long-Term Care Partnership Program Policy?
	Long Term Care Insurance Tips
	What is Long-Term Care Insurance ?
	Before You Buy Long-Term Care Insurance
	Factors to Consider When Choosing a Policy
	Renewing Your Policy
	Long-term Care Shopping Checklist
	Your Rights
	Long-Term Care Insurance Responsibilities
	What is a CCRC?
	How to Select a CCRC
	Financial Considerations

What is a Tax Qualified Long-Term Care Insurance Policy?

Federally tax-qualified long-term care insurance contracts provide certain federal income tax advantages. If you are paying a premium for a qualified long-term care contract, you may deduct part or the entire premium.

What if I can't afford a Long-Term Care Policy?

Seniors who do not have the financial resources to pay their long-term health care expenses may qualify for Medicaid. To qualify for Medicaid, your monthly income must be less than the federal poverty level, and your assets cannot exceed certain limits.

Medicaid will cover you only in Medicaid approved nursing homes that provide the level of care you need. Under certain circumstances, Medicaid will pay for home health care. The rules governing Medicaid are complex. For more information about Medicaid, contact the Florida Department of Children and Families at 1-866-762-2237.

What is a Long-Term Care Partnership Program Policy?

The Long Term Care Partnership Program (LTCPP) is designed to help protect the assets of long-term care insurance policyholders who subsequently seek Medicaid benefits. The Federal Deficit Reduction Act of 2005 allowed states to establish Qualified State Long Term Care Partnership Programs. However, having a qualified LTCPP policy does not guarantee that the insured will be eligible for Medicaid. The Department of Children and Families determines Medicaid eligibility in Florida.

While Florida participates in the LTCPP, not all states do. If a consumer plans to move to another state, check with its Medicaid eligibility agency to find out if they participate in the program. Also, while not all states recognize policies purchased in other states, Florida does honor LTCPP insurance policies purchased in other reciprocal states.

What is the advantage of a Long-Term Care Partnership Program Policy?

When you have exhausted all the benefits of a long term care policy that qualifies for the Long Term Care Partnership Program, the advantage of that policy is an asset disregard. In return for purchasing partnership policies or certificates, a portion of policyholder's assets will be disregarded when determining their eligibility for Medicaid long term care services, if and when they apply for such services.

Traditionally, to be eligible for Medicaid, applicants' assets cannot exceed certain financial eligibility thresholds. When applying for Medicaid long term care benefits, the program allows individuals who purchase these policies to retain one dollar in assets for each dollar of long term care insurance benefits paid by the policy. For example, the typical asset limit for an individual applying for Medicaid nursing home services is $2,000. If an applicant received $100,000 in benefits through a partnership program insurance policy or certificate, they may retain up to $102,000 in assets.

Long Term Care Insurance Tips

SHOP YOUR LONG TERM CARE INSURANCE POLICY- We will find the best insurance quote for your long term care insurance policy
Review your policy carefully!!!! Understand your coverage, where the care is to be provided, when it starts, and how long it lasts.
Individuals have a 30-day free look provision. You have the right to take up to 30 days to review your policy and decide if you want to keep it or return it for a full refund.
An individual policy must include a grace period provision. The grace period for premium payment is 30 days for a Long-Term Care Insurance Policy.

What is Long-Term Care Insurance

Long-term care encompasses a wide range of medical, personal and social services. People may need this care if they suffer from prolonged illness, disability or cognitive impairment. This care includes services provided by home health care agencies, adult day care centers, traditional nursing homes and continuing care retirement communities. (For definitions, please see the glossary.) In addition, family members often provide long-term care.

Types of nursing care

As you begin to plan for your long-term care needs, you will hear references to various types of nursing care, including skilled, intermediate and custodial.

Skilled care generally involves medical conditions that require care by trained medical personnel, such as registered nurses or professional therapists. A physician orders this 24-hour-a-day care as part of an overall treatment plan. People may need skilled care for a short time after an acute illness or injury, such as a stroke or hip fracture. However, some may require it for longer periods. A patient may obtain such care in a skilled nursing facility, nursing home or in an individual's home with help from visiting nurses or therapists.

Intermediate care refers to treatment needed daily, but not necessarily 24 hours a day. A physician orders this care and registered nurses provide supervision. It involves less specialization than skilled care, but often requires more attention to personal needs. Custodial care involves helping a person perform the activities of daily living, such as bathing, eating, dressing and transferring (i.e., moving into or out of a bed, chair or wheelchair). It involves less intensive or complicated services than skilled or intermediate care, and can take place in many settings, including nursing homes, adult day care centers or private residences. Custodial care is sometimes called personal care. In Florida, nursing homes must be licensed for both skilled nursing care and intermediate care. To verify whether a nursing home is licensed, call the Florida Agency for Health Care Administration toll-free at 1-888-419-3456. Long-term care policies must also provide at least one service of Personal Care, (also referred to as a "lower level of care" and can be performed by someone without professional training), which may be delivered by adult congregate living facilities, adult day care centers, adult foster homes, assisted living facilities, home health agencies, nursing services or social service agencies. Personal Care may include (but is not limited to) such services as meals, transportation, dressing and general homemaker duties.

What is Long-Term Care Insurance ?

Private insurance companies offer individual or group long-term care insurance policies that provide benefits for a range of services not covered by your regular health insurance, Medicare or Medicare supplement insurance.

Under Florida law, all insurance sold in Florida must be purchased from an insurance agent licensed by the Department of Financial Services (DFS). Long-term care policies may be distributed by an agent, through the mail or on the Internet. Some companies sell these policies through senior citizen organizations, fraternal societies and continuing care retirement communities. Some employers now offer these policies to their employees.

Standard provisions

Long-term care policies are not standardized, resulting in many different policy designs. It is very important that the consumer know the different types of coverage available, and then compare each policy, before purchase, to make sure the policy being quoted has the benefits that are wanted. Please see pages 11, 12 and 13, for questions to ask when shopping for long-term care insurance policies.

Coverage

While long-term care policies vary in coverage, they usually will pay either a fixed-dollar amount (an indemnity) or the actual costs of care. However, policies that pay for actual costs usually have a specified daily benefit amount that puts limits on how much can be paid out each day. There may also be a limit on how many days the benefits will last.

Tax advantages

As a result of the federal Health Insurance Portability and Accountability Act of 1996, some insurance companies offer policies with certain tax advantages, called "qualified policies." Generally, these offer the same benefits as long-term care policies, but the eligibility requirements may differ. For example, the insured must be chronically ill or unable to perform at least two activities of daily living, such as bathing or dressing, in order to receive benefits.

Before You Buy Long-Term Care Insurance

Before spending any money on a long-term care policy, you should first ask yourself if you need one and can afford it. Also find out if the policy provides the desired benefits.

Will you need a long-term care insurance policy?

The possibility of needing long-term care increases with age. At age 65, seniors face a 40-percent lifetime chance of a nursing home stay, according to the U.S. Department of Health and Human Services. For about 10 percent of the seniors, this stay will last five years or longer.

You may not need long-term care insurance if you have enough savings to cover your health care. Nationally, the average cost of nursing home care may be about $50,000 a year or more, according to America's Health Insurance Plans (AHIP). Medicaid is the only government program available to pay long term care costs for those who meet certain federal poverty guidelines and cannot afford to buy private insurance or pay the costs out-of- pocket.

Informal caregivers, such as family and friends, provide about 70 percent of all long term care, according to AHIP. You should discuss with your spouse, children or friends what assistance they would provide if you became sick or injured and needed care. Before committing yourself to a policy, investigate what services your community provides for seniors. Area Agencies on Aging may be able to provide information.

What kind of policies can you buy?

There are many combinations of benefits available for long-term care insurance, and many types of policies. Fixed dollar amount - Most policies pay a specific amount, or indemnity, for each day you receive coverage.

Individual life insurance and annuities - Under this arrangement, a percentage of the policy's benefits goes toward long-term care costs. However, the benefits and the cash values are reduced when long-term care benefits are paid. Check with your agent to find out if you qualify for this coverage. These are generally sold as acceleration riders to the life insurance coverage because they accelerate the death benefits.

An acceleration rider is paid as a monthly benefit to an insured person who requires round-the-clock care due to a medical condition. The kinds of care covered by this rider are specified by the rider and may provide, for example, benefits for the insured person to be cared for in either an approved nursing facility or in their home by a licensed home health agency.

The specific requirements that an insured person must meet in order to qualify for acceleration rider benefits depend on the terms of the particular acceleration rider. For example, the rider may require that care be "medically necessary." A common feature is the requirement that insured persons be unable to perform a particular number of "activities of daily living" in order to prove the necessity of long-term care. Finally, most riders require a 90-day waiting period before accelerated rider benefits are payable.

Limited benefit policy - This is any policy that limits coverage to care in a nursing home or to one or more lower levels of care. For example, "nursing home only" or a home health care policy would be considered limited benefit policies.

Can you afford long-term care insurance?

Some financial experts recommend that you spend no more than 5 percent of your income on a policy. Following this recommendation means that you would need an annual income of at least $60,000 to afford a $3,000 policy that would provide all the benefits for a range of care. Of course, the price of your policy will depend partly on your health status, your age and the benefits you choose.

Carefully evaluate your sources of income. If you have large investments to protect, such as houses, businesses or stocks, it might be a good idea to buy a long-term care policy. This is especially true if you do not want to use all of your savings and assets to pay for long-term care. However, if you are living on a limited income, such as Social Security benefits or a small pension, a long-term care policy may not be the best way to spend your money.

During your application review process, you will be provided with two important forms. One is a personal worksheet; the other is a disclosure. The personal worksheet will collect financial information to determine if the policy is suitable for you. The disclosure will provide, among other things, a list of the company's past rate increases. This information is valuable when comparing products and companies.

Can you qualify for a policy?

Companies selling long-term care insurance underwrite their coverage. This means that you may have to answer a few questions about your health for the "short-form" underwriting process. The company may also collect a more detailed health history from you for an extensive underwriting process. The detailed underwriting procedure includes an examination of your current medical records and a statement from your doctor regarding your health.

If you have only minor health problems, most companies will issue you a policy. However, there will be a waiting period for most preexisting conditions. A pre-existing condition refers to a case in which medical advice or treatment was needed, recommended by or received from a health care provider within a certain period of time before the date the insured person's coverage took effect.

Will a long-term care policy help provide the care you need?

Although long-term care policies have mandated coverage requirements in Florida, they may provide limited types of care. Discuss your needs with your family and friends before signing a contract, and make sure the policy will fill any gaps in care you have.

Factors to Consider When Choosing a Policy

You should consider what benefits the policy offers and the criteria for receiving those benefits before you buy a policy from the vast long-term care market. You should also consider the exclusions and limitations of the policy. Discuss the policy with relatives, friends or your lawyer before signing. Do not be afraid to tell an agent that you need time to think about your decision before you sign.

What activates payment of benefits?

Long-term care policies vary in the types of care they cover, the daily benefit amount they pay and the length of time the coverage lasts. Read the policy carefully to see under what conditions benefits are paid.

Even though you pay for the benefits, the insurer does not guarantee coverage unless you satisfy certain requirements. For example, most policies require that you be unable to perform a given number of activities of daily living without assistance. Some policies specify that they will cover only "medically necessary" care. Before buying such a policy, make sure you understand how the policy defines "medically necessary."

Most policies also have a benefit trigger for cognitive impairment. Policyholders can only qualify for these benefits if they are unable to pass tests assessing their mental functioning. This standard is important if a person has Alzheimer's disease. An insurance company may deny coverage to an individual who already has Alzheimer's disease, symptoms of cognitive impairment or any other pre-existing condition. Insurance regulations require long term care policies to cover Alzheimer's for existing policyholders. Read and understand the terms used in the policy and how they apply to your coverage. A policy usually includes a section that lists and defines terms. The same terms may be defined differently in various policies. For example, the term "care coordinator" may be a case manager or a benefits advisor. Please be aware that you are not bound to the insurance company's assessment of your eligibility for benefits. You may use your own licensed health care practitioner to assess your eligibility.

How long does coverage last?

When you apply for a long-term care policy, you will have a choice in designing your policy. You decide on: . the daily benefit amount, . the maximum benefit period and . the elimination period (explained below) that would best suit your needs.

The benefit may be a set dollar amount or may be stated as the number of years, months or days you will receive benefits. However, before the benefits start, you must satisfy an elimination period, which is the length of time you must wait after entering a nursing home or using home care before benefits from your policy will begin. The elimination period will range from zero to 180 days.

What is not covered?

Read the exclusion section of the policy carefully. Policies sold in Florida cannot exclude coverage for named conditions (stated in the policy) or diseases such as Alzheimer's or similar organic brain disorders, like severe dementia. Most long-term care policies will exclude coverage for:

mental and nervous disorders or diseases (except organic brain disorders),
alcoholism and drug addiction,
illnesses caused by an act of war,
treatment already paid for by the government and
attempted suicide or the result of an intentionally self-inflicted injury.

How are premium costs determined?

Premiums for long-term care insurance vary, usually depending on your age when you buy the policy, your health, the benefits provided, the length of the elimination period and any additional options you choose. These variables are outlined below.

Age - Each company sets the age limits that determine the cost. Usually, the younger you are when you buy a policy, the lower the premium. All long-term care policies sold in Florida are "issue age," which means that your premium amount does not increase as you get older, but instead continues to be based on your age when you first bought the policy. The premiums of "attained age" policies, however, do increase as you age.

Health condition - Companies may set health underwriting criteria. Your general state of health may be determined by filling out an application. It is very important to state facts correctly and to not omit anything. Any omission can result in your policy being cancelled.

Benefits - Know what your policy will pay and the length of time you will be covered. Generally, when the policy pays more benefits, either through a larger daily benefit amount or a longer benefit period, the policy will have more expensive premiums.

Elimination period - The elimination period is the number of days you must be in a nursing home or receive a lower level of care before you begin receiving benefits from your policy. Usually, the longer the elimination period, the lower the premium. However, keep in mind that people often stay in nursing homes for periods shorter than 90 days.

Additional options - Additional options include "inflation protection," "non-forfeiture" and "premium-waiver" benefits. Your premium costs may increase after you purchase your policy, but they must increase for all people with the same policy in the state. This means that you cannot be singled out for a premium increase if you develop an illness or medical condition. Before you buy a policy, know the average cost of nursing homes in your area. This can help you better determine the amount of benefits you need.

What other features should I look for?

Florida law requires companies to offer inflation protection and non-forfeiture benefits on long-term care policies. You should also inquire about a premium-waiver benefit. These options may better meet your long-term care needs, but will require a higher premium. Inflation protection automatically increases your benefits each year by a specific percentage. Insurance companies must offer a 5-percent compounded inflation protection feature.

Without such protection, the dollar amount of care for your policy remains the same. This means that 10 years after your purchase, your policy would not pay as much of your bill as it originally would have, due to the increased cost of care.

The non-forfeiture benefit provides a reduced amount of long-term care benefits or a shortened coverage period, if your policy is cancelled because you are unable to continue to pay your premiums. For more information, contact your insurance agent or company. A premium-waiver clause allows you to stop paying premiums while you receive benefits. The National Association of Insurance Commissioners (NAIC) recommends that you obtain such a waiver with your policy.

A contingent benefit, as of July 1, 2006, provides new benefit options to existing policyholders if they are faced with a significant rate increase. This means the policyholder can now choose to continue the current policy, accept a modified benefit plan at the existing premium, or accept a paid-up policy equal to the sum of all the premiums paid during the life of the policy.

Renewing Your Policy

In Florida, all long-term care policies are "guaranteed renewable." This means that your insurance company cannot cancel your policy unless you do not pay your premiums, deliberately provide false information or leave out key facts about your health history. Once you exhaust the maximum benefit period, the company can terminate your policy.

When renewing your policy, you should not be pressured into dropping your current policy to buy a "new and improved" version. Talk with your agent or company about upgrading your current policy to increase benefit amounts and periods, or to include protection. If you're thinking about switching policies, take time to read the new policy and determine whether it will provide key benefits that your current policy does not offer. Also, check to see if you must satisfy another waiting period for pre-existing conditions that you already satisfied under your current policy.

If you decide to switch policies, make sure your new policy has taken effect before discontinuing the old one.

Long-term Care Shopping Checklist

The following checklist is for comparison shopping purposes only. It provides a rough idea of what a long-term care policy may offer. It also points out some benefits that you may want to compare among the policies you review.

Please contact your agent or company for the most current premiums available for your needs. The amount you pay will be based on your age, sex and the type of coverage. Usually, the older you are when you buy long-term care insurance, the higher the premium.

Your Rights

You have the right to receive an outline of the coverage written in easy-to-understand language. The outline explains your policy's benefits, exclusions and limitations.

You have the right to receive copies of all forms and applications signed by you or the agent.

You have the right to a 30-day "free look period" to review your policy. If you decide you do not want to keep the policy, return it to the company by certified or registered mail with the return receipt requested. You must do this within 30 days of receiving the policy to be eligible for a full refund.

You have the right to have your policy renewed unless you don't pay your premiums or deliberately give misleading information on your application. Your rate may change, but only if the company changes everyone else's premium in your policy class. You cannot be singled out and have your premium increased because of your health or the number of claims you have filed. A company cannot cancel your policy because of your age or any medical condition that occurs after you obtain your policy. Your policy will state the conditions under which the company may raise your premiums.

You have the right to appeal any claim denied as not medically necessary to a licensed physician designated by your insurer. You have the right to a policy with the following information stamped on the front page: "Notice to buyer - This policy may not cover all of the costs associated with long term care that may be incurred by the buyer during the period of coverage. The buyer is advised to periodically review this policy in relation to changes in the cost of long term care." In addition, your policy should state: "This policy has been approved as a long-term care insurance policy meeting the requirements of Florida law."

You have the right to have pre-existing conditions excluded for a certain period of time after your policy goes into effect. A preexisting condition is an illness known about, diagnosed or treated before you buy a policy. Report all illnesses when applying for longterm care insurance. If your company learns of an unreported pre-existing condition, it may either refuse to pay claims or cancel your policy.

You have the right to a 30-day grace period to pay premiums. When this period expires, your insurance company may only cancel your policy for nonpayment of premium. To do so, your company must mail you a notice of possible lapse in coverage, which gives you an additional 30 days for payment. The company must also send this notice to a secondary addressee if chosen by you at the time of purchase.

Long-Term Care Insurance Responsibilities

You are responsible for reading and understanding your insurance policy. You are responsible for reading and understanding all "explanation of benefits" forms sent by your insurance company. Such a form will usually state: "This is not a bill." However, you should closely study it to find out whether you actually received the services described. You should contact your company for help if you don't understand the form or have trouble reading or speaking English. Careful scrutiny of these forms can help you and the insurer detect and fight fraud.

You are responsible for reporting suspected fraud. For example, you may examine your health insurance records and discover that your insurance company was billed for services you never received. If you suspect such a crime has occurred, call the DFS Fraud Hotline toll-free at 1-800-378-0445.

You are responsible for making sure your application is correct. This includes information on pre-existing conditions. If you make a fraudulent statement, the company may cancel your policy or refuse to pay a claim. You are responsible for knowing what your policy covers and what it excludes.

You are responsible for maintaining continuous coverage. If you purchase a new policy, do not cancel your old policy before the company has accepted your application and your new policy is in force.

You are responsible for paying your premiums and deductibles, even while involved in a dispute with your company. You are responsible for verifying licenses of an insurance agent and company by calling the Consumer Helpline toll-free at 1-877-MY-FL-CFO (1-877-693-5236). A business card is not a license.

You are responsible for knowing the length of your policy's elimination period. This is the time you will have to wait, after you begin receiving care covered by your policy, before you can start receiving benefits. The elimination period cannot exceed six months (180 days).

What is a CCRC?

For more than 625,000 Americans, CCRCs offer a way to meet future long-term care needs.

Florida law defines CCRCs, also known as life-care facilities, as retirement facilities that furnish residents with shelter and health care in return for an entrance fee and monthly payments. Potential residents often describe the promise of independent living and financial and psychological security as major attractions. Such residents may fear the prospect of entering an unfamiliar nursing home, separated from spouses, friends and loved ones. For this reason, CCRCs usually maintain a long-term nursing care facility on the premises that residents may use. Those residents who require nursing home care can receive the care they need while keeping in close contact with spouses, supportive friends and neighbors.

During the last few years, the CCRC market has dramatically changed. Originally, religious communities and fraternal organizations sponsored most of these communities through notfor- profit companies. They promised "total life care" through contractual arrangements for occupancy and services. However, for-profit businesses have also entered this market. Such businesses continue to change and expand the definition and function of these communities to meet consumer demands.

However, CCRCs don't solve the long-term care needs for all seniors. The relatively high cost of the entrance fees and ongoing monthly expenses make these communities unaffordable or impractical for many.

How to Select a CCRC

Knowing your rights will help you determine if you can afford or benefit from a CCRC. To make an informed decision, you will need to know what information a CCRC must provide and what questions to ask. For example, you should find out about the development of any new or expanding communities under consideration.

Educate yourself on the state laws that form the basic regulations governing CCRCs. DFS regulates the financial solvency of CCRCs. This includes complaints against a CCRC from a resident or family member. The Department becomes involved after a contractual agreement has been signed by both parties or during the mediation process. For more information, contact the Consumer Helpline toll-free at 1-877-MY-FL-CFO (1-877-693-5236).

The Agency for Health Care Administration, on the other hand, regulates other CCRC aspects, such as assisted living, skilled nursing care, quality-of- care issues and concerns with medical facilities. The Agency for Health Care Administration can be reached toll-free at 1-888-419-3456.

Financial Considerations

The agreement of residents in CCRCs to become lifelong occupants in these facilities usually requires fees that can be quite expensive. Under the traditional CCRC concept, the entrance fee can range from $2,000 to $500,000 or more. Many contracts offer plans that include refunds of entrance fee options up to 100 percent. In return for their payments, residents receive various levels of services, depending upon which option is chosen. In addition, the monthly fees can range from $250 to $5,000 or more. Facilities may offer additional benefits, such as health clubs, transportation and regular social activities.

There are four types of payment plans to consider when investigating a CCRC facility. They are extensive, modified, fee-for-service and pay-as-you-go.