The following is a National Association of Insurance Commissioners (NAIC) Long Term Care Act which has been slightly redacted for ease of reading and elimination of as much "legalese" as is possible without losing intent, and, hopefully, making it easier to understand. Note: Reference to "this state" refers to the particular state in which the policy is issued—sort of a way that the NAIC is an organization of state regulators and they are well aware that there can be differences in regulations covering the same subject in a different state.
As part of the Partnership Program, each state that wants to enact the program will take legal steps—depending upon the state as to the process—so that each of the NAIC Act provisions will be enforced in the state. There is a little leeway in this Act inasmuch as state has the ability to change some of the provisions provided that the change is more beneficial to the consumer.
(The initial revisions to Section 9, and these technical clarifying revisions currently under consideration, address the requirement placed on state insurance departments under the federal Deficit Reduction Act [DRA] of 2005 and guidance provided by Centers for Medicare & Medicaid Services [CM S] with respect to producer training about the long-term care Partnership program.)
The DRA and CMS guidance requires that “[t]he state insurance department must provide assurance to the state Medicaid agency that
F anyone who sells a policy under the Partnership receives training and demonstrates an understanding of Partnership policies and their relationship to public and private coverage of long-term care.”
Long term care insurance is complex and constantly changing. As a result, it is imperative that producers selling long-term care insurance are adequately trained. The model act requires that producers are properly trained and lists the topics the training should cover. To better protect consumers interested in purchasing this product, it is imperative that there be as much uniformity across the states to ensure that this training occurs.
Also, approximately 46 states have adopted this model act or something similar. The revisions related to Long Term Care Insurance producer training were adopted in December 2006. As such, many states have not had the opportunity to revise their laws and/or regulations to reflect the Section 9 revisions.
The NAIC had several reasons for this Act, starting with the standard" to promote the public interest," plus their desire to promote the availability of long-term care insurance policies, to protect applicants for long-term care insurance (as they define it) "from unfair or deceptive sales or enrollment practices, to establish standards for long-term care insurance, to facilitate public understanding and comparison of long-term care insurance policies, and to facilitate flexibility and innovation in the development of long-term care insurance coverage."
The NAIC stresses that their "legislative intent" is to protect the public while recognizing the need to permit flexibility and innovation with respect to long-term care insurance coverage, otherwise, obviously, without such flexibility and innovation these policies would rarely be sold.
The NAIC recognized the viability of a long-term care product funded through a life insurance vehicle, and this Act is not intended to prohibit approval of this product (as a matter-of-fact, it is addressed herein later). This "notice" was placed in this Act so as to call attention to the state regulators that they should "examine their existing statutes to determine whether amendments to other code sections such as the definition of life insurance and accident and health reserve standards and further revisions are necessary to authorize approval of the product."
The NAIC requirements of this Act applies to policies delivered or issued for delivery on or after the effective date of this Act. The NAIC offers a disclaimer that the Act is not intended to supersede the obligations of entities subject to this Act to comply with the substance of other applicable insurance laws insofar as they do not conflict with this Act, except that laws and regulations designed and intended to apply to Medicare supplement insurance policies shall not be applied to long-term care insurance. There has always been a conflict of coverage between Medicare Supplement and Long Term Care Insurance policies, therefore, this is a rather standard disclaimer. It also makes it quite clear that entities that are subject to the Act must still continue to comply with other applicable insurance legislation that is not in conflict with this Act
This Act may be known and cited as the “Long-Term Care Insurance Act. (In this text this Act is referred to generally as the "Partnership Program" or Partnership Plan" because the entire text discusses Long Term Care Insurance in its various forms.)
Unless the context requires otherwise, the definitions in this section apply throughout this Act.
“Long-term care insurance” means any insurance policy or rider advertised, marketed, offered or designed to provide coverage for not less than twelve (12) consecutive months for each covered person on an expense incurred, indemnity, prepaid or other basis; for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal care services, provided in a setting other than an acute care unit of a hospital. This, effectively, eliminates any short-term LTCI policies. Most states do not recognize such short-term policies anyway.
This definition not only covers the typical LTCI policies, but also group and individual annuities and life insurance policies or riders that provide directly or supplement long-term care insurance, as well as a policy or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity.
The term also includes qualified long-term care insurance contracts. This is as defined as there could be some differences in coverages between the Long Term Care Insurance Act requirements and qualified plans under HIPAA.
Long-term care insurance may be issued by insurers; fraternal benefit societies; nonprofit health, hospital, and medical service corporations; prepaid health plans; health maintenance organizations or any similar organization to the extent they are otherwise authorized to issue life or health insurance. Note that the last part of this sentence is the "kicker"—a hospital, the Elks Club, or an HMO cannot issue these policies unless they are approved as insurers. Also note that for-profit health care organizations and hospitals are excluded.
Long-term care insurance shall not include any insurance policy that is offered primarily to provide basic Medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income or related asset-protection coverage, accident only coverage, specified disease or specified accident coverage, or limited benefit health coverage. There is a large market for these limited benefit policies, and the NAIC wants to make sure that they are not covered or considered as Long Term Care Insurance companies for the purposes of this Act,
There have, in recent years, been a plethora of riders and provisions of life insurance policies that address long term care in some fashion, but for the purposes of this Act, this term does not include life insurance policies that accelerate the death benefit specifically for one or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention or permanent institutional confinement, and that provide the option of a lump-sum payment for those benefits and where neither the benefits nor the eligibility for the benefits is conditioned upon the receipt of long-term care.
Notwithstanding any other provision of this Act, any product advertised, marketed or offered as long-term care insurance shall be subject to the provisions of this Act.
"Applicant" is , for individual long-term care insurance policies, the person who seeks to contract for benefits; and in the case of a group long-term care insurance policy, the proposed certificate holder. ("Certificate" is thereby defined as any certificate issued under a group long-term care insurance policy, which policy has been delivered or issued for delivery.)
"Commissioner" is defined as the Insurance Commissioner of the particular state. Sometimes the top insurance official in a state government is known by another title, therefore this definition is caveated to mean anyone who is the "chief insurance supervisory official of the state." The policy wording should reflect the correct title.
Group long-term care insurance simply means a long-term care insurance policy that is
delivered or issued for delivery in this state and issued to one of the following Groups:
(a) is composed of individuals all of whom are or were actively engaged in the same profession, trade or occupation; and has been maintained in good faith for purposes other than obtaining insurance; or
(b) An association or a trust or the trustees of a fund established, created or maintained for the benefit of members of one or more associations. Prior to advertising, marketing or offering the policy within this state, the association or associations, or the insurer of the association or associations, shall file evidence with the Commissioner that the association or associations have at the outset a minimum of 100 persons and have been organized and maintained in good faith for purposes other than that of obtaining insurance; have been in active existence for at least one year; and have a constitution and bylaws that provide that (1) the association or associations hold regular meetings not less than annually to further purposes of the members; (2) except for credit unions, the association or associations collect dues or solicit contributions from members; and (3) the members have voting privileges and representation on the governing board and committees. Thirty (30) days after the filing the association or associations will be deemed to satisfy the organizational requirements, unless the Commissioner makes a finding that the association or associations do not satisfy those organizational requirements., or
(c) A group other than as described above, subject to a finding by the Commissioner that: (a) the issuance of the group policy is not contrary to the best interest of the public; (b) the issuance of the group policy would result in economies of acquisition or administration; and (c) the benefits are reasonable in relation to the premiums charged.
“Policy” means, for the purposes of the NAIC Model Bill, any policy, contract, subscriber agreement, rider or endorsement delivered or issued for delivery by an insurer; fraternal benefit society; nonprofit health, hospital, or medical service corporation; prepaid health plan; health maintenance organization or any similar organization. The NAIC makes it clear that the Act is intended to apply to the specified group and individual policies, contracts, and certificates whether issued by insurers; fraternal benefit societies; nonprofit health, hospital, and medical service corporations; prepaid health plans; health maintenance organizations or any similar organization. In order to include such organizations, each state should identify them in accordance with its statutory terminology or by specific statutory citation as to what is a "group" according to the law of one state, may not be a "group" in another state. Depending upon state law, insurance department jurisdiction and other factors, separate legislation may be required. In any event, the legislation should provide that the particular terminology used by these plans and organizations may be substituted for, or added to, the corresponding terms used in this Act. The term “regulations” should be replaced by the terms “rules and regulations” or “rules” as may be appropriate under state law.
The definition of “long-term care insurance” under this Act is designed to allow maximum flexibility in benefit scope, intensity and level, while assuring that the purchaser’s reasonable expectations for a long-term care insurance policy are met. The Act is intended to permit long-term care insurance policies to cover either diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal care services, or any combination thereof, and not to mandate coverage for each of these types of services. Pursuant to the definition, long-term care insurance may be either a group or individual insurance policy or a rider to such a policy, e.g., life or accident and sickness. The language in the definition concerning “other than an acute care unit of a hospital” is intended to allow payment of benefits when a portion of a hospital has been designated for, and duly licensed or certified as a long-term care provider or "swing" bed.
“Qualified long-term care insurance contract” or “federally tax-qualified long-term care insurance contract” means an individual or group insurance contract that meets the requirements of Section 7702B(b) of the Internal Revenue Code of 1986, as amended, as follows:
The only insurance protection provided under the contract is coverage of qualified long-term care services. A contract shall not fail to satisfy the requirements of this subparagraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate; i.e., a policy that pays a daily benefit regardless of what the charges are, would be considered as qualified under this Act.
Qualified long-term care insurance contract” or “federally tax-qualified Long Term Care Insurance contract” also means the portion of a life insurance contract that provides long-term care insurance coverage by rider or as part of the contract and that satisfies the requirements of Sections 7702B(b) and (e) of the Internal Revenue Code of 1986, as amended.
It should be noted here that the definition of "qualified long-term care insurance contract" has been added, as stated above, to assist states in regulating federally tax-qualified policies.
(For technical reference, The Health Insurance Portability and Accountability Act of 1996 [HIPAA] and Section 7702B of the Internal Revenue Code, as amended, provide a definition of this term and clarifies federal income tax treatment of premiums and benefits. Treasury Regulations 1.7702B-1 and 1.7702B-2, and Notice 97-31 issued by the Internal Revenue Service, further address these issues.)
No group long-term care insurance coverage may be offered to a resident of this state under a group policy issued in another state to a group described above, unless this state or another state having statutory and regulatory long-term care insurance requirements substantially similar to those adopted in this state has made a determination that such requirements have been met. Limiting extraterritorial jurisdiction was not intended to limit jurisdiction over other health insurance policies.
It is noteworthy that the NAIC, in a self-protective mode, stated the regulations that may be adopted in order to comply with this Model Bill and which are quite extensive and all-inclusive. The Commissioner may adopt regulations that include standards for full and fair disclosure setting forth the manner, content and required disclosures for the sale of long-term care insurance policies, terms of renewability, initial and subsequent conditions of eligibility, non-duplication of coverage provisions, coverage of dependents, preexisting conditions, termination of insurance, continuation or conversion, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, recurrent conditions and definitions of terms. To date, states that have passed legislation so as to qualify for the Partnership Program have adopted nearly all of the wording of the NAIC Model.
The Commissioners acknowledged the fact that long-term care insurance is still a relatively new insurance product, but which has the ability to be very important not only to the citizens of each state, but also to help limit the every-increasing Medicaid budget as the population ages. This subsection permits the adoption of regulations establishing disclosure standards, renewability and eligibility terms and conditions, and other performance requirements for long-term care insurance. Regulations under this subsection should recognize the developing and unique nature of long-term care insurance and the distinction between group and individual long-term care insurance policies.
No long-term care insurance policy may:
Since the inception of the LTCI policy, there has been concern and dispute in respect to preexisting conditions, such concern understandable as the average age of applicants is quite high compared to other insurance products. While most states have addressed the definition of preexisting conditions in an LTCI policy, it is well that the Commissioners came to agreement on this point (our emphasis):
(1) No long-term care insurance policy may be delivered or issued for
delivery in this state if the policy:
(c) Conditions eligibility for any benefits other than waiver of premium, post-confinement, post-acute care or recuperative benefits on a prior institutionalization requirement.
(2) (a) A long-term care insurance policy containing post-confinement,
post-acute care or recuperative benefits shall clearly label in a separate paragraph of the policy or certificate entitled “Limitations or Conditions on Eligibility for Benefits” such limitations or conditions, including any required number of days of confinement.
(b) A long-term care insurance policy or rider that conditions eligibility of non-institutional benefits on the prior receipt of institutional care shall not require a prior institutional stay of more than thirty (30) days.
This amendment to the section is primarily intended to require immediate and clear disclosure where a long-term care insurance policy or rider conditions eligibility for non-institutional benefits on prior receipt of institutional care.
(3) No long-term care insurance policy or rider that provides benefits only following institutionalization shall condition such benefits upon admission to a facility for the same or related conditions within a period of less than thirty (30) days after discharge from the institution.
This language is from the original model act which did not prohibit prior institutionalization. The NAIC intended that this section (3) above would be eliminated after adoption of the amendments to this section which prohibit prior institutionalization. This is another situation where the individual states should examine their comparable wording carefully during the process of adoption or amendment of this Act.
The State Department of Insurance may adopt regulations establishing loss ratio standards for long-term care insurance policies provided that a specific reference to long-term care insurance policies is contained in the regulation.
(This particular provision has been enacted by most, if not all, of the states.) Long-term care insurance applicants shall have the right to return the policy or certificate within thirty (30) days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. Long-term care insurance policies and certificates shall have a notice prominently printed on the first page or attached thereto stating in substance that the applicant shall have the right to return the policy or certificate within thirty (30) days of its delivery and to have the premium refunded if, after examination of the policy or certificate, other than a certificate issued pursuant to a policy issued to a group (As defined above), the applicant is not satisfied for any reason. This subsection shall also apply to denials of applications and any refund must be made within thirty (30) days of the return or denial.
Note: Most of the states have adopted various forms of an "Outline of Coverage" and there can be substantial differences. The NAIC Model Bill prescribes wording so as to create uniformity in this document.
An Outline of Coverage (OOC) shall be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation through means that prominently direct the attention of the recipient to the document and its purpose.
The Commissioner shall prescribe a standard format, including style, arrangement and overall appearance, and the content of an Outline of Coverage. Many of the states either have (or will have, adopted the California form of OOC.
F In the case of agent solicitations, an agent shall deliver the Outline of Coverage prior to the presentation of an application or enrollment form. In the case of direct response solicitations, the Outline of Coverage shall be presented in conjunction with any application or enrollment form.
In the case of a policy issued to a group defined as defined in the regulations, an Outline of Coverage shall not be required to be delivered, provided that the information described in this Act is contained in other materials relating to enrollment. Upon request, these other materials shall be made available to the Commissioner.
The Outline of Coverage shall include:
A description of the principal benefits and coverage provided in the policy; a certificate issued pursuant to a group long-term care insurance policy that policy is delivered or issued for delivery in this state shall include:
(3) A statement that the group master policy determines governing contractual
provisions.
These particular provisions take into consideration the particular nature of long-term care insurance, and are consistent with group insurance laws. Specific standards would be contained in regulations implementing this Act.
If an application for a long-term care insurance contract or certificate is approved, the issuer shall deliver the contract or certificate of insurance to the applicant no later than thirty (30) days after the date of approval.
(This is another provision that has already been adopted by many states.) At the time of policy delivery, a policy summary shall be delivered for an individual life insurance policy that provides long-term care benefits within the policy or by rider. In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant’s request, but regardless of request shall make delivery no later than at the time of policy delivery. In addition to complying with all applicable requirements, the summary shall also include:
(5) If applicable to the policy type, the summary shall also include:
(c) Current and projected maximum lifetime benefits; and
(6) The provisions of the policy summary listed above may be incorporated into a basic illustration required to be delivered in accordance with [cite to state’s basic illustration requirement comparable to Sections 6 and 7 of the Life Insurance Illustrations Model Regulation] or into the life insurance policy summary which is required to be delivered in accordance with [cite to state’s life insurance policy summary requirement comparable to Section 5 of the Life Insurance Disclosure Model Regulation].
Any time a long-term care benefit, funded through a life insurance vehicle by the acceleration of the death benefit, is in benefit payment status, a monthly report shall be provided to the policyholder. The report shall include:
(3) The amount of long-term care benefits existing or remaining.
If a claim under a long-term care insurance contract is denied, the issuer shall, within sixty (60) days of the date of a written request by the policyholder or certificateholder, or a representative thereof, provide a written explanation of the reasons for the denial; and make available all information directly related to the denial.
Any policy or rider advertised, marketed or offered as long-term care or nursing
home insurance shall comply with the provisions of this Act.
For a policy or certificate that has been in force for less than six (6) months an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is material to the acceptance for coverage.
For a policy or certificate that has been in force for at least six (6) months but less than two (2) years an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is both material to the acceptance for coverage and which pertains to the condition for which benefits are sought.
After a policy or certificate has been in force for two (2) years it is not contestable upon the grounds of misrepresentation alone; such policy or certificate may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured’s health.
A long-term care insurance policy or certificate may be field issued if the compensation to the field issuer is not based on the number of policies or certificates issued—“field issued” means a policy or certificate issued by a producer or a third-party administrator pursuant to the underwriting authority granted to the producer or third party administrator by an insurer and using the insurer’s underwriting guidelines.
If an insurer has paid benefits under the long-term care insurance policy or certificate, the benefit payments may not be recovered by the insurer in the event that the policy or certificate is rescinded.
In the event of the death of the insured, this section shall not apply to the remaining death benefit of a life insurance policy that accelerates benefits for long-term care. In this situation, the remaining death benefits under these policies shall be governed by the life insurance incontestability clause in effect in that state. In all other situations, this willl apply to life insurance policies that accelerate benefits for long-term care.
An insurer that offers a long-term care insurance policy, certificate, or rider must offer a nonforfeiture protection provision providing reduced paid-up insurance, extended term, shortened benefit period, or any other benefits approved by the Department of Insurance if all or part of a premium is not paid. Nonforfeiture benefits and any additional premium for such benefits must be computed in an actuarially sound manner, using a methodology that has been filed with and approved by the Insurance Department.
For purposes of this section, the nonforfeiture protection provision providing a shortened benefit period shall, at a minimum, provide the following:
(a) The same benefits, amounts, and frequency in effect at the time of lapse but not increased thereafter, must be payable for a qualifying claim, but the lifetime maximum dollars or days of benefits shall be determined as specified in paragraph (b).
(b) The standard nonforfeiture credit must be equal to 100 percent of the sum of all premiums paid, including the premiums paid prior to any changes in benefits. The insurer may offer additional shortened benefit period options, as long as the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration. However, the minimum nonforfeiture credit shall not be less than 30 times the daily nursing home benefit at the time of lapse. In either event, the calculation of the nonforfeiture credit is subject to the limitation as set forth in the regulations.
No policy or certificate shall begin a nonforfeiture benefit later than the end of the third year following the policy or certificate issue date.
Nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.
All benefits paid by the insurer while the policy is in premium-paying status and in paid-up status may not exceed the maximum benefits which would have been payable if the policy or certificate had remained in premium-paying status.
There shall be no difference in the required minimum nonforfeiture benefits for group and individual policies.
The requirements set forth in this subsection shall become effective July 1, 1997, and shall apply as follows:
1. Except as provided in subparagraph 2., the provisions of this subsection apply to any long-term care policy issued in this state on or after July 1, 1997.
2. The provisions of this subsection shall not apply to certificates issued under a group long-term care insurance policy in force on July 1, 1997.
Premiums charged for a policy or certificate containing nonforfeiture benefits shall be subject to the loss ratio requirements of the regulations rating the policy as a whole.
At the time of lapse, or upon request, the insurer must disclose to the insured the insured's then-accrued nonforfeiture values. At the time the policy is issued, the insurer must provide to the policyholder schedules demonstrating estimated values of nonforfeiture benefits; however, such schedules must state that the estimated values are not to be construed as guaranteed nonforfeiture values.
Any nonforfeiture protection provision that does not provide for a shortened benefit period must, at a minimum, provide a benefit that is actuarially equivalent to the minimum benefit required for a shortened benefit period.
With respect to group policies, the insurer must make the offers required by these regulations to each proposed certificateholder, except that the insurer must make the offers to the policyholder in the case of a continuing care contract.
This section does not apply to life insurance policies or riders containing accelerated long-term care benefits.
An individual may not sell, solicit or negotiate long-term care insurance unless the individual is licensed as an insurance producer for accident and health or sickness or life [include other lines of authority as applicable] and has completed a one-time training course. The training shall meet the requirements set forth below.
The training required shall not include training that is insurer or company product specific or that includes any sales or marketing information, materials, or training, other than those required by state or federal law.
Insurers subject to this Act must obtain verification that a producer receives training required by this act before a producer is permitted to sell, solicit or negotiate the insurer’s long-term care insurance products, maintain records subject to the state’s record retention requirements, and make that verification available to the Commissioner upon request.
Insurers subject to this Act must maintain records with respect to the training of its producers concerning the distribution of its Partnership policies that will allow the state insurance department to provide assurance to the state Medicaid agency that producers have received the training (as required above) and that producers have demonstrated an understanding of the Partnership policies and their relationship to public and private coverage of long-term care, including Medicaid, in this state. These records shall be maintained in accordance with the state’s record retention requirements and shall be made available to the Commissioner upon request.
The satisfaction of these training requirements in any state shall be deemed to satisfy the training requirements in this state.
The CMS has directed that the State insurance department must provide assurance to the State Medicaid agency that anyone who sells a policy under the Partnership receives training and demonstrates an understanding of Partnership policies and their relationship to public and private coverage of [long term care].” (There is no guidance from the Model Act as to how the State insurance department is to accomplish this requirement.) This drafting note provides information to the State insurance departments with respect to achieving the aforementioned requirements.
The NAIC Long-Term Care Insurance Model Act requires insurers to obtain and maintain records verifying that producers who sell, solicit or negotiate long-term care insurance products on their behalf have received the training required in this Section and to make such records available to the State insurance department. In addition, another Section of this Act requires insurers to obtain and maintain records concerning the training of their agents for Partnership policies. Insurers are to maintain records that verify its producers have received the training required for Partnership policies and that they demonstrate an understanding of the policies and their relationship to public and private long-term care coverage.
(The following is information for State insurance departments in procedures in notifying State Medicaid agencies:
State insurance departments, in order to meet the standards contained in the DRA concerning producer training should consider developing a process to communicate with the State Medicaid agency on how the DRA requirements will be met. They should develop a process to verify insurance company compliance with these requirements including, as an audit step, the verification of compliance with the above requirements as part of a market conduct examination. In addition, the Model Act requires State insurance departments to consider performing annual, random verifications of insurance company compliance. Finally, consideration may be given to deeming those training programs, specifically approved by the State for Partnership policy training that qualifies for Continuing Education, as meeting the requirements contained in this Act.)
Note: The next 3 Sections of this Act discusses the authority and the rights of the various states Regulators to enact this Act, to establish minimum standards, adequate premiums, etc., informing each sate that they should examine its own statutory authority to make and promulgate regulations, so as to abide by this Model Act.
In addition to any other penalties provided by the state laws/regulations, any insurer and any producer found to have violated any requirement of the state relating to the regulation of long-term care insurance or the marketing of such insurance shall be subject to a fine of up to three (3) times the amount of any commissions paid for each policy involved in the violation or up to $10,000, whichever is greater. Note that this is a very severe penalty as basically it establishes a minimum penalty of $10,000.
F The intention of this section is to authorize separate fines for both the insurer and the producer in the amounts suggested above.
States may vary as to long-term care services that are offered, but the following are commonly available:
Adult Companion Services. Companions assist or supervise the enrollee with tasks such as meal preparation or laundry and shopping, but do not perform these activities as discreet services.
Adult Day Health Services. Services are furnished in an outpatient setting and encompass a broad range of health and social services needed to ensure optimal functioning of an enrollee.
Assisted Living Services. Service includes personal care services, homemaker services, chore services, attendant care, companion services, medication oversight, and therapeutic social and recreational programming provided in a home-like environment in an assisted living facility.
Case Management Services. Services that facilitate enrollees gaining access to other needed services regardless of the funding source for the services, and which contribute to the coordination and integration of care delivery.
Chore Services. Services needed to maintain the home as a clean, sanitary, and safe living environment. This service includes heavy household chores such as washing floors, windows and walls, tacking down loose rugs and tiles, and moving heavy items of furniture in order to provide safe entry and exit.
Consumable Medical Supply Services. Disposable supplies provided to the enrollee and caregiver, which are essential to adequately care for the needs of the enrollee. Consumable medical supplies include adult disposable diapers, tubes of ointment, cotton balls and alcohol for use with injections, medicated bandages, gauze and tape, colostomy and catheter supplies, and other consumable supplies.
Environmental Accessibility Adaptation Services. Physical adaptations made to the home to allow the enrollee to function with greater independence in the home and without which the enrollee would require institutionalization. Such adaptations may include the installation of ramps and grab-bars, widening of doorways, modification of bathroom facilities, or installation of specialized electric and plumbing systems to accommodate the medical equipment and supplies.
Escort Services. Escort providers assist enrollees in gaining access to services. Escorts may provide language interpretation for people who have hearing or speech impairments or who speak a language different from that of the provider. Escort providers assist enrollees in gaining access to services.
Family Training Services. Training and counseling services provided to the families of enrollees. Training includes instruction and updates about treatment regimens and use of equipment specified in the plan of care to safely maintain the enrollee at home.
Financial Assessment/Risk Reduction Services. Financial assessment and guidance provided to the caregiver and enrollee. This service provides instruction for and/or actual performance of routine, necessary, monetary tasks for financial management such as budgeting and bill paying. In addition, this service also provides financial assessment to prevent exploitation by sorting through financial papers and insurance policies and organizing them in a usable manner. This service provides coaching and counseling to enrollees to avoid financial abuse, to maintain and balance accounts that directly relate to the enrollee's living arrangements at home, or to lessen the risk of nursing home placement due to inappropriate money management.
Home Delivered Meals. Nutritionally sound meals delivered to the residences of enrollees who have difficulty shopping for or preparing food without assistance. Each meal must provide one-third of the Recommended Dietary Allowance (RDA) and may be hot, cold, frozen, dried, canned or a combination of hot, cold, frozen, dried, or canned with a satisfactory storage life.
Homemaker Services. General household activities (meal preparation and routine household care) provided by a trained homemaker.
Nutritional Assessment/Risk Reduction Services. Nutritional assessment and guidance for both caregivers and enrollees.
Nursing Facility Services. Services furnished in a health care facility licensed in the state. Care is provided 24-hours a day in a nursing facility and includes all services necessary to meet client needs.
Occupational Therapy. Therapy provided to restore, improve or maintain impaired functions to increase or maintain the enrollee's ability to perform tasks required for independent functioning as determined through a multi-disciplinary assessment to improve an enrollee's capability to live safely in the home setting.
Personal Care. Assistance provided to the enrollee to eat, bathe, dress, maintain personal hygiene, and participate in activities of daily living. This service includes assistance with meal preparation, but does not include the cost of the meals. This service may also include housekeeping chores such as bed-making, dusting and vacuuming, which are essential to the health and welfare of the enrollee, rather than the enrollee's family.
Personal Emergency Response Systems (PERS). The installation and monitoring of electronic devices that allows enrollees at high risk of institutionalization to secure help in an emergency.
Physical Therapy. Therapy provided to restore, improve or maintain impaired functions determined through a multi-disciplinary assessment to improve an enrollee's capability to live safely in the home setting.
Respite Care Services. Short term relief provided to an enrollee's caregiver. Respite care is provided in the home/place of residence, Medicaid licensed hospital, nursing facility, or assisted living facility.
Speech Therapy. The identification and treatment of neurological deficiencies related to feeding problems, congenital or trauma-related maxillofacial anomalies, autism, or neurological conditions that affect oral motor functions to improve an enrollee's capability to live safely in the home setting.
Transportation Services. Transportation may be provided within Medicaid guidelines at the option of the contractor. These services cover arranging and providing appropriate modes of transportation for participants to receive necessary medical services
Whereas Long Term Care Services are more custodial in nature, Acute Care Services are available in nearly all states, but the specific name of the service may vary. Many of these services are required by Medicaid.
Community Mental Health Services. Community-based psychiatric rehabilitative services provided by a psychiatrist or other physician.
Home Health Care Services. Intermittent or part-time nursing services provided by a registered nurse or licensed practical nurse, or personal care services provided by a licensed home health aide, with accompanying necessary medical supplies, appliances, and durable medical equipment.
Independent Laboratory and Portable X-ray Services. Medically necessary and appropriate diagnostic laboratory procedures and portable x-rays ordered by a physician or other licensed practitioner.
Inpatient Hospital Services. Medically necessary services provided under the direction of a physician or dentist in a hospital maintained primarily for the care and treatment of patients with disorders other than mental diseases.
Outpatient Hospital/Emergency Medical Services. Medical services provided in an outpatient center or emergency department necessary to maintain the health of the enrollee. These services include outpatient preventive, diagnostic, therapeutic, or palliative care provided under the direction of a physician at a licensed hospital and supplies necessary for the clinical treatment of a specific diagnosis or treatment.
Physician Services. Those services and procedures rendered by a licensed physician at a physician's office, patient's home, hospital, nursing facility or elsewhere when dictated by the need for preventive, diagnostic, therapeutic or palliative care, or for the treatment of a particular injury, illness, or disease.
Prescribed Drug Services. This service provides medications ordered by physicians. These services include all legend drugs dispensed (including Medicaid-reimbursable psychotropic drugs) to enrollees in outpatient settings.
Transportation is an optional rather than a required service. If they choose, providers can also offer expanded services such as vision and hearing services.
STUDY QUESTIONS
CHAPTER EIGHT
1. Long Term Care Insurance is quite complex and is constantly changing, therefore anyone who sells a Long Term Care under the Partnership Plan
A. must be licensed as a securities dealer.
B. must be a policyholder under such plan prior to marketing such a plan.
C. can be a property and casualty agent or special lines agent.
D. must demonstrate an understanding of the policies and their relationship to public and private coverage of long-term care.
2. The NAIC Model Act (Partnership Plan) defines “Long-term care insurance” policy as a policy on an expense incurred, indemnity, prepaid, or other basis,
A. providing at least 12 consecutive months coverage for each covered person.
B. that excludes skilled care nursing home costs.
C. that excludes custodial or intermediate care.
D. and for the purpose of this regulation, must be written by other-than a life insurance company.
3. Before an Association or a trust or the trustees of an established fund can be considered as a “group” for the purposes of marketing Long Term Care Insurance, they must be approved as such by the Insurance Department, and
A. they may be formed for the sole purpose of buying insurance.
B. they must be provided with a minimum of 20% discount on insurance to their members.
C. they must have at least 100 members in the beginning.
D. have a commonality of employment.
4. “Qualified long-term care insurance contract” of “federally tax-qualified long-term care contract” means an individual or group insurance contract
A. that has been approved by the Insurance Department as “Partnership Plan” policy.
B. issued by a mutual insurance company.
C. that meets the requirements of Section 7702B(b) of the IRS Code of 1986.
D. that does not meet the requirements as set forth in HIPAA as an insurance Policy.
5. A Long Term Care Insurance policy
A. may be cancelled, nonrenewed or otherwise terminated because of the age or health deterioration of the insured.
B. may provide coverage only for skilled nursing care.
C. cannot be cancelled, nonrenewed or otherwise terminated because of the deterioration of the mental or physical health of the insured.
D. may be restricted to Custodial care of the insured.
6. Preexisting condition means a condition for which medical advice or treatment was recommended by, or received from a provider of health care services
A. within six months preceding the effective date of coverage of an insured person.
B. six months after the effective date of coverage of an insured person.
C. within a 12 month period prior to application for the coverage.
D. within a 12 month period prior to and after the application for coverage.
7. No Long Term Care Insurance policy may be delivered or issued if the policy
A. does not cover claims that occur within six months preceding the effective date of coverage.
B. contains a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new or other form within the company.
C. does not require prior hospitalization prior to receiving benefits.
D. is an indemnity policy.
8. The “free look” provision states that if the applicant is not satisfied for any reason with a Long Term Care Insurance policy
A. they may return it within 90 days, no questions asked.
B. they may return it within 30 days, no questions asked.
C. the applicant may return the policy within 60 days and receive full refund of premiums paid upon completion of an questionnaire for the insurance company.
D. they may be provided with a one-year free trial.
9. Under the Model Bill, if an application for a long-term care insurance contract or certificate is approved, the issuer shall deliver the contract or certificate of insurance to the applicant
A. no later than 30 days after the date of approval.
B. no later than 30 days after the application has been received by the insurer.
C. within one week after the policy has been approved.
D. within a reasonable period of time.
10. The incontestability period for a policy that has been in force for a period of 6 months but less than 2 years, the insurer may rescind the policy/certificate or deny an otherwise valid long-term care insurance claim if it can be shown
A. that commissions were exorbitant.
B. to be a non-tax-qualified policy.
C. that there is misrepresentation that is both material to the acceptance for coverage and which pertains to the condition for which benefits are sought.
D. only that the misrepresentation is material.
11. A policy provision in a LTCI policy that provided for reduced paid-up insurance, extended term, shortened benefit period of other approved benefits if all or a part of the premium is not paid—is called
A. nonforfeiture benefits.
B. forfeiture benefits.
C. Return of Premium provision.
D. a Dividend option.
12. The NAIC Model Bill requires that an agent (producer) must undergo a one-time training course that shall be for a period of
A. no less than 8 hours.
B. not more than 4 hours.
C. anywhere from 2 to 16 hours.
D. not more than 6 hours.
13. Ongoing training required for a producer under this Bill shall be
A. no more than 8 hours every 4 years.
B. no less than 4 hours every 24 months.
C. not more than 2 hours every calendar year.
D. totally at the discretion of the insurance company.
ANSWERS TO STUDY QUESTIONS
1D 2D 3A 4C 5C 6A 7C 8B 9A 10C 11A 12A 13B