Long-Term Care in America

Table of Contents

Chapter 1: What is Long-Term Care?		7
	Defining Long-Term Care	7
	A Changing Market	7
	Protecting Assets	8
	Where Do You Go for Long-Term Care?	9
	Understanding the Need for Long-Term Care	13
Chapter 2: Policy Options		15
	What is a Long-Term Care Policy?	15
	Policy Issue	15
	Medicare Benefits	16
	Part A Skilled Nursing Care	19
	Part B (Outpatient Care)	20
	Medigap Insurance Policies	28
	Chart	29
	Protecting Assets	30
	Medicaid Benefits	31
	Relying on Insurance for LTC Payment	32
	State Requirements	32
	Age and Premiums	33
	The Underage Market	33
	Increasing Premiums	34
	Insurance Pricing	35
	Premium Mode	36
	Reducing Benefits to Save Premium	36
	Policy Renewal	37
	Policy Review: 30 Day “Free Look”	37
	Number One Best Selling Unread Document	38
	No Policy Covers Everything	38
	Policy Schedule	38
	Policy Terminology	39
	Elimination Periods in Policies	41
	Policy Termination	42
	Mental Impairments of Organic Origin	42
	Hospitalization Requirements	42
	Home and Community Based Benefits	43
	Bed Reservation Benefit	43
	Waiver of Premium	44
	Selecting Other Types of Care	44
	No Policy Covers Everything	45
	Age Misstatement	46
	Forgetfulness: Notifying a Third Part of Premium Due	46
	Reinstatement of a Lapsed Policy	46
Chapter 3: The Evolution of a Major Industry		48
	Born of Need	48
	Children as Caregivers	48
	Can Families Make it Through?	49
	Paid Home Care	50
	Better Health Equates into Longer Life	50
	The Early Policy Years	50
	Policy Benefits Improve Over Time	51
	Remaining at Home	52
	Qualifying for Medicare-Funded Home Care	52
	How Does Medicare Decide What is a Covered Service?	52
	Finding a Home Care Provider	53
	Recognizing the Need and the Market	54
	Insurers Figure Out the Risks of LTC Insurance	54
	The LTC Marketplace	56
	Dramatic Policy Improvement, But Also Rising Premium Rates	56
Chapter 4: Who is at Risk?		57
	The Loss of Family Members as Caregivers	57
	Who Will Need Long-Term Care?	57
	A Graying Nation	58
	Frailty a Major Issue	58
	Considering Insurance	59
	Women are Especially Vulnerable	59
	Earning Retirement Benefits	60
	Medicaid is the Major Payer of LTC Benefits	60
	Medicare Drug Legislation	60
	Encouraging HMO Coverage	61
	Health Care for those not yet on Medicare	61
	Preventing Impoverishment	61
	Looking at Family History as a Guideline	63
	Activities of Daily Living	63
	Following the Statistics	64
	Case Managers	65
	Are Premiums Affordable for a Number of Years?	65
	Who Buys LTC Insurance?	66
Chapter 5: Designing a Personal Policy		68
	What Will the Choices Include?	68
	Daily Benefit Options	69
	Expense-Incurred and Indemnity Methods of Payment	69
	Determining Benefit Length	70
	Policy Structure	70
	Home Care Options	70
	Inflation Protection	71
	Simple and Compound Protection	71
	Required Rejection Forms	71
	Elimination Periods in LTC Policies	72
	Policy Type	72
	Home Modification Benefit	73
	Rental of Medical Devices	73
	Caregiver Training	73
	Restoration of Policy Benefits	73
	Preexisting Periods in Policies	73
	Is Hospitalization First Required?	74
	Choosing Federal Tax-Qualified or State Non-Tax Qualified Policies	74
	Nonforfeiture Values	75
	Waiver of Premium	75
	Unintentional Lapse of Policy	76
	Bed Reservation Option	76
	Policy Renewal Features	76
	Items Not Covered by the LTC Policy	77
	Extension of Benefits	77
	Partnership Policies	77
	Partnership Plans Protect Assets, Not Income	78
	Partnership Benefits are Not Portable	78
	Partnership Commissions	78
	Robert Wood Johnson Foundation	78
	Affordability of Contracts	79
	Dollar-for-Dollar Asset Protection	79
	Standardized Definitions	80
	Minimum Partnership Requirements	80
	Benefit Duplication	80
	Partnership Publication	80
	Partnership Continuing Education Requirements	81
Chapter 6: Comparing Qualified and Non-Qualified Plans		82
	HIPAA	82
	Existing LTC Policies	82
	Benefit Triggers	82
	Activities of Daily Living (ADL)	83
	Understanding the Difference in Benefit Triggers	85
	Federal Criteria	85
	State Laws May Vary	87
	Policy Conversions Were Offered	87
	Who Will Benefit?	88
	Defining “Chronically Ill”	88
	Qualifying Contracts for Tax-Favored Status	89
	Accelerated Death Benefits	89
	Purchasing Contracts for Financial Protection	89
	Pre-1997 Long-Term Care Policies	90
	The Treasury Responds with Exceptions	90
Chapter 7: The Deciding Factors		92
	Who is Most Likely to Buy LTC Insurance?	92
	Ongoing Long-Term Medical or Personal Care	93
	Some States Requiring Specific LTC Education	93
	Limited Benefits in Early Products	94
	No Durational Coverage Under Medicare	94
	Remaining at Home	94
	Home Care Insurance Policies	95
	Home Care Benefits Under Medicare	96
	Medicare Qualification	96
	Assessing Care at Home	97
	Gatekeepers	98
	Protecting Against Catastrophic Costs First	98
	Knowing Industry Terminology	98
	Receiving the Benefits Expected	101
	The Buying Decision	101
Chapter 8: Selecting a Suitable Company		102
	An Ethical Obligation to the Consumer	102
	Assets = liabilities + owner’s equity	103
	Guaranty Funds	105
	Signs of Company Trouble	106
Chapter 9: Alternatives to Purchasing Insurance		108
	Assessing the Need	108
	Realistically Speaking	108
	Liabilities	111
	Estate Planning Tools	111
	Asset Transfer	112
	Reverse Mortgages	113
	Paid Family Members	114
	Accelerated Life Insurance Benefits	114
	The Largest Payer of LTC: Medicaid	115
	Asset Transfers for Medicaid Eligibility	116
	Trust Shelters	118
	Catastrophic Coverage Act of 1988	119
	Information Required When Applying to Medicaid	120
	Viatical Settlements	120
	Any Income Available	121
Chapter 10: Agent Ethics		122
	According to Webster (definition of ethics)	122
	Establishing Insurance Ethics	123
	Linking Risk Management and Ethics	126
	Adequate Underwriting is an Ethical Duty	127
	Due Diligence	130
	Long-Term Care Due Diligence	131
	Product Suitability	134
	Long-Term Care Insurance Suitability Worksheet	134
	Suitability Determination/Personal Suitability Worksheet	136
	Long-Term Care Insurance Suitability Letter	138
	Insurance Dilemma	139
	Confidentiality	141
	Simultaneous Representation	141
	Common Sense	141
	Promoting Ethical Conduct	141
	Presenting Insurance Benefits	142
	Minimizing Misunderstandings	143
	The Ethical Path	144
	Professional Ethics	145
	Establishing a Code of Ethics	145
	Mandated Education	146
	Keeping track of CE (chart)	147
	Principles Versus Rules	148
	Legal Issues	149
	Integrity	150
	Objectivity / Competence	151
	Fairness / Confidentiality / Professionalism / Diligence	153
	Express and Ostensible Authority	153
	Ethics and Risk Control	154
	Agent Liability	155
	Company Insolvencies	155
	Third-Party Liability	155
	Hidden Costs of Litigation	156
	Documenting Procedures for Self Protection	156
	Unwritten, Invisible or Implied	157
	Honesty – A Moral and Legal Obligation	158
	Churning Policies	158
	A Personal Choice	159
	The Exceptional Man	160
	Taking the Moral Path	161
	Developing a Work Ethic	162
	Acting in the Best Interest of the Majority	162
	Listening Our Way to Success	163
	Fulfilling Our Obligation to the Client	163
	Policy Presentations	164
	Duty to Represent Insurers Fairly	164
	Acknowledging Our Moral Obligations	165
	Agents Are Also Clients	165
	Is It Too Good to be True?	166

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