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These definitions have been gleaned from various sources including LTC policies, periodicals and my own teachings, etc. so that you can get a reasonable understanding of the terminology. The definitions are NOT the same for all companies and many are far more detailed so you need to do more checking with an expert before a final decision is made. (Some definitions may overlap)
I have included some direct links from my general page on LTC. For further info and links, please click
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ACTIVITIES OF DAILY LIVING (ADL's)
In policies based on ADL's, a physician, nurse, case manager, gerontologist, or other health care professional certifies that a policyholder needs "hands on" help, supervisory "stand by" help, or directional "reminding" help to perform everyday living activities.
ADL's are as follows
Dressing- The policyholder's ability to put on and take off all garments and medically necessary braces, corsets, elastic stockings or garments or artificial limbs or splints usually worn and to fasten and unfasten them.
Eating- Reaching for, picking up and rasping a utensil and cup; getting food on a utensil and bringing food, utensil and cup to mouth; manipulating food on plate; and cleaning face and hands as necessary following meals.
You might be able to understand the difficulty with Alzheimers patients- they will not be able to do this ADL in the latter stages. The cost to help such people is greater because a separate attendant must do it all.
Continence- The policyholder's ability to control bowel and bladder function as well as use ostomy or catheter receptacles and apply diapers and disposable barrier pads.
Transferring- Moving for one siting or lying position to another sitting or lying position; for example from a bed to an from a wheelchair or sofa, coming to a standing position or repositioning to promote circulation and prevent skin breakdown.
Toileting - Getting on and off a toilet or commode and emptying a commode, managing clothing and wiping and cleaning the body after toileting, and using and emptying a bed pan or urinal..
Bathing- Cleaning the body using a tub, shower or sponge bath, including getting a basin of water, managing faucets, getting in and out of a tub or shower and reaching head and body parts for soaping, rinsing and drying.
The above ADL's are required for the tax qualified policies. Some non tax qualified may also include ambulation for a total of 7 ADL's making it somewhat easier for non tax qualified policies to trigger coverage.
Ambulation is the ability to walk both inside and outside your residence regardless of the use of a cane, crutches or brace. The only time the inability to ambulate would be covered under a tax qualified policy is when the person cannot ambulate in and our of bed without assistance.
ACTUAL CHARGES
The carrier will pay the actual daily charge, not to exceed the daily benefit that the policyholder has. That does not necessarily mean that the difference may be lost. For example, if you have a $75.00 per day allowance and you are charged $50.00 for services, the other $25 may be retained as part of the "kitty" of funds. Some policies may pay you the flat rate of $75.00 irrespective of actual costs. But there premiums might be higher overall.
ACTUAL EXPENSE BASED ON REASONABLE AND CUSTOMARY CHARGES
This provision limits reimbursement to the reasonable and customary charge for care in the policyholder's geographic area.
ACCELERATED DEATH BENEFIT
A life insurance policy option that will pay all or part of the policy's face amount before death- usually for terminal illness. This benefit can pay the cost associated with catastrophic medical conditions, which can include the need for nursing home residency.
Such benefits are not included in all policies, particularly older ones. Check you policy for conditions. If you still wish distributions from the policy before death, you can consider a Viatical Settlement.
ACUTE CARE
Care for illness or injury that has developed rapidly, has pronounced symptoms and is finite in length. Goal of hospital is to cure the patients and restore them to health (for example, a broken hip.)
ADULT DAY CARE
Is an organized social, recreational and/or rehabilitative service that provides care in the daytime for persons who cannot remain alone. It includes health and custodial care, and other related support. Commonly provides meals and transportation services to and from a patients home though depends on community. This care - an alternative to care in the home or in an institution - is given in specified centers on a less than 24-hour basis. It is essentially day care for children except for adults.
See also ADULT DAY CARE
ADULT FOSTER CARE
A live-in arrangement where one adult lives with, and is provided care and/or services, by an unrelated person or family. These arrangements may be certified by the state or managed individually. Regardless of certification, do as much checking on the individual as possible.
ALTERNATE CARE BENEFIT
A policy provision which allows for a special arrangement of services specifically designed to allow the person to reside in a setting other than a nursing facility. A major benefit and one that the elderly are wanting in every current policy. They are designed to delay a move to a nursing home for as long as possible.
ALTERNATE CARE FACILITY
A licensed residence other than a nursing facility where care services are delivered. Examples: a hospice, an assisted living facility, an Alzheimer's facility or Christian Science setting. They provide:
1. Provides 24 hour-a-day care and services sufficient to support needs resulting from inability to perform Activities of Daily Living or Cognitive Impairment; and
2. Has a trained and ready to respond employee on duty at all times to provide that care; and
3. Provides 3 meals-a-day and accommodates special dietary needs; and
4. Is licensed or accredited by the appropriate agency to provide such care, if such licensing or accreditation is required by the state in which the care is received; and
5. Has formal arrangements for the services of a physician or nurse to furnish medical care in case of emergency; and
6. Has appropriate methods and procedures for handling and administering drugs and biologicals.
These requirements are typically met by hospice care facilities or assisted living facilities that are either free standing facilities or part of a life-care community. They may also be met by some personal care and adult congregate care facilities. They are generally NOT met by individual homes or independent living units.
ALZHEIMER'S DISEASE
A form of organic dementia resulting in cognitive impairment, first described in 1906 by German neurologist Alois Alzheimer. Specified levels of impairment trigger benefits under the long term care insurance policy. One of the most difficult areas for caregiving since the patient rarely gets any better- simply declines over an average of five or so years till another illness causes death. See also ALZHEIMERS
ALZHEIMER'S UNITS
Special living units within nursing facilities or alternate care facilities specifically providing care for those with Alzheimer's disease.
Special Note- the cost of nursing home care is close to $50,000 annually. But that is an AVERAGE. Alzheimer's care costs more due to the additionally personal care that is generally required- at least in advanced stages. An attendant will have to feed and bath them and this simply costs more each day. Diapers can be an added expense and so on.
AMBULATORY CARE
Medical services provided on an outpatient (non-hospitalized) basis. Services may include diagnosis, treatment, surgery and rehabilitation.
ANCILLARY SERVICES
Health care services conducted by providers other than primary care providers.
APHASIA
Loss of the ability to use or understand language.
See also Academy of Aphasia, One Waterhouse St., Pediatric Urology Unit, Massachusetts General Hospital, Boston, MA 02114, 617 726-3877 is involved with the problem of speech
National Aphasia Organization The National Aphasia Association is a nonprofit organization that promotes public education, research, rehabilitation and support services to assist people with aphasia and their families.
ASSESSMENT
An evaluation of physical and/or mental status by a health professional. The assessment is a central component in long term care insurance coverage and payment of claims. Upon the initiation of benefits - due either to the loss of two or more of the activities of daily living (ADLs), or a cognitive impairment, an assessment is performed by a healthcare professional, usually an R.N. This assessment, together with the attending physician notes, determines the level of functional incapacity and plan of care to be followed in assisting the policy holder in performing ADLs.
The form is then sent to the company for their review and, if accepted, payments may begin after the elimination period.
ASSISTED LIVING FACILITY
A facility providing room, laundry, some forms of personal care such as help with bathing or dressing, and usually recreation and social services. Licensed by state departments of social services, they're known in some states as Community-Based Residential Facilities or Board and Care Homes. Generally they are less costly than nursing homes. Assisted living facility can also refer to facilities designed specifically for the care of dementia.
AGE RESTRICTIONS
LTC policies are generally sold to people between 50 and 79 years of age. Some insurers will sell policies to those over 80 years of age, and several will sell policies to those under 50. Policies sold to those 80 years of age and over sometimes have reduced benefits compared to the standard policy.
ALTERNATE PLAN OF CARE
"Alternate Plan of Care" benefits can include having improvements made to a policyholder's home, such as ramps built for wheelchair access, handrails in a bathroom, kitchen cabinets lowered, if the doctor, patient, patient's family and insurance company determine that this would be more appropriate for all concerned parties and if it is at a lower or equal cost to the nursing home.
While basic nursing home policies may include this provision, it is more prevalent in home heath care riders/additions.
See HOME MODIFICATION FOR THE ELDERLY LINK: "Home Modification and Repair includes adaptations to homes that can make it easier and safer to carry out activities such as bathing, cooking, and climbing stairs and alterations to the physical structure of the home to improve its overall safety and condition."
ASSISTED LIVING FACILITIES
An alternate care facility is one that is licensed (if state licensing is required) and provides 24 hour a day personal care and custodial services by a trained and awake staff to those who suffer cognitive impairment or require help with Activities of Daily Living.
It provides 24-hour a day care and services sufficient to support needs resulting from inability to perform Activities of Daily Living or Cognitive Impairment.
It is state licensed, if required, to provide the level of care and services being rendered.
It has supervision to the extent required by law.
It provides three meals a day and accommodates special dietary needs.
It has procedures for procuring the services of a doctor or nurse to furnish medical care in case of emergency.
It has appropriate methods and procedures to assist in administering prescribed drugs.
The "Assisted Living Facility" may be described as the following: Alternate Care Facility; Residential Care Facility; Alzheimer's Facility; Adult Foster Home; Domiciliary Care Facility.
BED RESERVATION BENEFITS
Bed Reservation Benefits may be paid if a policyholder's covered stay is interrupted because the insured is hospitalized for any reason and a charge is made to reserve the policyholder's nursing home or alternate care facility accommodations. The days vary by policy but generally cover 30 days.
BENEFIT LIMITS
This amount represents the daily benefit times the maximum number of days you can receive for all benefits combined under the policy. See STATE DAILY LONG TERM CARE COSTS for the 1999 and 2000 average costs so you can determine what limits you may need. Also recognize that limits will vary considerably within a state. It's important to have an idea which state and locale you might retire to.
BENEFITS AVAILABLE
You can multiply your daily limit by the time frame of coverage selected. Let's say you had $150/day benefits and were covered for 3 years. 365 x3 x $150 = $164,250 of coverage. This is the "kitty" you can draw upon (not all policieds work this way, though a great number do). Others provide "x" number of days of coverage whether or not the maximum is reached. For example, a policy might pay $150 daily for 365 days of coverage. However, even though the average costs were $100 per day, the policy was completed in 365 days.
BENEFITS PAYABLE: Some policies are "triggered" by the loss of just two ADL's- others may require three. Varies by state, policy and whether tax or non tax qualified. Or by cognitive impairment or requiring substantial assistance by another person or by "severe" cognitive impairment.
BOARD AND CARE HOMES
These provide seniors with a room, meals, help with ADLs, and some degree of protective supervision. They are not usually certified by Medicaid, but are usually licensed by the state. Board and Care Homes are sometimes known as domiciliary care homes, personal care homes, community residence facilities, rest homes, and other similar terms.
CARE ADVISORY BENEFIT
Means the payment for services of a Care Advisor.
CAREGIVER
A person providing assistance to a dependent person because of medical reasons or the person's inability to conduct routine activities of daily living. The primary primary caregiver is usually the spouse who oversees and provides care for the incapacitated person. Secondary caregivers are friends and relatives who assist . Caregivers tend to forget their own health and well being and may end up as martyrs requiring care themselves. It is for this reason that a policy can be so beneficial. See also CAREGIVERS:
CAREGIVER TRAINING:
Some policies will cover the costs of training a family member who are caregivers in the home. The premium cost is additional for this rider.
Additional coverage can include training for a non home resident (for example as sister) to get trained to take care of you and ALSO to be independently paid.
CASE MANAGERS
Often a nurse or a social worker trained in helping the elderly. A case manager evaluates a person's need for care, devises a treatment plan, helps with nursing and monitors the care that is given.
CHRONIC CARE
Care for illness continuing over a long period of time or recurring frequently. Chronic conditions often begin inconspicuously and symptoms are less pronounced than acute conditions. Long term care insurance is designed to assist people who have loss of capacity due to chronic illnesses. The problem cannot be cured but merely managed (for example a stroke).
CHRONICALLY ILL
LTC policies that are tax-qualified require that a policyholder be certified as "chronically ill" by a licensed health care practitioner. This means that the policyholder is not able to perform without substantial assistance for at least 2 ADL's for a period of at least 90 days or requiring Substantial Supervision to protect yourself from threats to health and safety due to Severe Cognitive Impairment. The requirement of 90-days does not imply a waiting period for payment of benefits or a time during which services are not considered qualified long-term care services. Policies that are tax-qualified may therefore pay benefits from the beginning of services, providing the services are expected to be need for at least 90 days.
COGNITIVE IMPAIRMENT
The deterioration or loss of one's intellectual capacity, confirmed by clinical evidence and standardized tests, in the areas of: (1) short term and long term memory; (2) orientation to person, please and time; and (3) deductive or abstract reasoning. This is a trigger for long term care benefits.
Recognize, however, that tax qualified policies require "severe" cognitive loss. The issue is just exactly what is defined as "severe?"
COGNITIVE IMPAIRMENT (SEVERE)
This is a loss or deterioration in mental capacity that is comparable to Alzheimer's Disease and similar forms of irreversible dementia, and is documented by clinical evidence and standardized tests of memory, orientation as to people, places, and time; and deductive or abstract reasoning.
Tax-qualified policies must require that cognitive impairment be "severe" in accord with this definition. Many companies are saying that they are using the same definition as "regular" cognitive impairment. But unless it is so stated in the contract, caveat emptor.
CONFINED HOSPICE CARE
This means care received in a hospice care facility that provides a formal program of care for terminally ill patients, on an inpatient basis, as directed by a physician. The treatment must be provided by a hospice care organization that is state licensed or Medicare approved.
CONGREGATE HOUSING FACILITIES
Are dormitory-like settings where people live in the same building, occupy private rooms or apartments, and share some meals. Care is usually of a custodial nature, with emergency medical assistance readily available.
CONTINUATION FOR ALZHEIMER'S DISEASE AND OTHER FORMS OF COGNITIVE IMPAIRMENTS PROVISIONS
If the carrier receives written notice within a specified period of time usually nine (9) months after the termination date, proof, in the form of doctor's certification, that the policyholder has Cognitive Impairment (including but not limited to Alzheimer's Disease) and payment of all past due premiums for the policy and all riders that were in force, immediately prior to the date of lapse, are paid.
CONSUMER PRICE INDEX
CPI (Consumer Price Index) is for all urban consumers published by the United States Department of Labor. Policies are offered with no increase, a 5% simple increase, 5% compounded increase and an increase based on the CPI. See CONSUMER PRICE INDEX LINK: Provides information on new data and past history.
CONTINUAL ONE-TO-ONE ASSISTANCE
The policyholder is considered to need Continual One-To-One Assistance in performing an Activity of Daily Living when the policyholder needs direct physical assistance somewhere in the process of performing that activity; and the policyholder cannot independently perform the entire activity even with the supports and mechanical aides that are normally available. This is also known as "Hands-On Assistance."
CONTINUING CARE RETIREMENT COMMUNITY
CCRC's provide living arrangements and services ranging from independent to assisted to institutional care. Often, CCRCs require a large initial cash payment, ongoing maintenance fees, assignment of assets or a combination of all three. They may provide general assistance as well as full skilled nursing care. Research carefully
CONTRACT
The legal contract issued by the insurer to the insured that contains all of the conditions and terms of the insurance. Regardless of your agent, it is incumbent that you read the document to be sure it contains the coverage you requested. That said, such review is an onerous undertaking by most people and the contents rarely understood. You need to engage someone that really know the policies well before purchase. Yes, it may be possible to change companies later on, but your health may have changed. Also, a new policy is almost certain to be more expensive since you are at a higher attained age.
CONVALESCENT CARE FACILITY
A skilled nursing facility or an intermediate care facility. The majority of insurance companies require such facilities to be state licensed or Medicare approved. The following services are to be provided by the facility: a doctor available in case of emergency; one full-time nurse and a nurse on duty at all times; strict procedures for handling and administering drugs and other treatments; medical records kept for all patients.
See FACILITIES LINK: This site provides some limited articles on long term care, how to pick a nursing home, etc. but, most specifically, info on Alzheimer's facilities, Assisted Living, Home Health Care, Retirement Homes, Hospices, Nursing and Rehab Facilities, CCRS's in 32 metropolitan areas. and
GUIDE TO CHOOSING A NURSING HOME LINK: An solid online guide published by the Health Care Financing Administration that is mandatory reading in selecting a proper facility for a loved
CUSTODIAL CARE
Custodial care can be given in nursing homes, adult day centers, or at home. It helps you with the basic activities of daily living such as bathing, eating,dressing, continence, toileting, transferring and ambulating. People without medical training can give custodial care but under the supervision of a physician. This care may involve preparation of meals, help with taking medicines, and other routine activities.
SPECIAL NOTE: Some old policies required that a patient had to use skilled care first, then intermediate before qualifying for custodial care. Mostly useless since about 95% of people entering a nursing home required only custodial care. Check old policies to see restrictions.
DAILY MAXIMUM
Select the maximum amount you want a plan to pay for each day you need care. For example, $150 of daily nursing home care and $75 of home health care. Many policies are offered in $10 per day increments. Some states mandate that home health care must be at least 50% of the nursing home coverage.
DEFERRED OPTION
Deferred Option allows you to increase coverage in the 1st, 3rd, or 5th Policy Anniversary - providing no claim has been incurred. Premiums will be based on your age on the 1st, 3rd, or 5th Policy Anniversary, as applicable. No further evidence of insurability will be required. Some let you "skip" one, two or perhaps three dates but allow an increase thereafter. Others are more restrictive and require coverage at each date or the option is lost. Note that they all, to my knowledge, allow increases at the higher attained age.
DEMENTIA
Continual impairment of cognitive functions (e.g., thinking, memory and personality). Of the elderly population, 5 to 6 percent have dementia. Alzheimer's disease causes about one-half of these cases; vascular disorders (multiple strokes) cause one-fourth; other dementias are caused by heart disease, infections, toxic reactions to medicines, alcoholism and other rarer conditions according to the National Association of Health Underwriters. Most Dementias are not reversible. See also COMMUNICATING WITH PEOPLE WITH DEMENTIA
DETERMINING THE POLICYHOLDER'S TOTAL POLICY PREMIUMS
The policyholder's total premiums are all premiums the policyholder has paid for the policy.
DIAGNOSTIC-RELATED GROUPS (DRGs)
Specific classifications of illnesses into which hospital inpatients are grouped. Under Medicare, hospitals are reimbursed a fixed amount that is determined in advance for each patient admitted for an illness in a given classification.
DISCHARGE PLANNING
Assessment of an inpatient's medical condition for the purpose of arranging for appropriate continuing care upon leaving the facility. This planning includes the length of time the patient will be in the hospital, the expected outcome and whether there are special needs or requirements on discharge.
DURABLE MEDICAL EQUIPMENT
Mechanical devices, equipment and supplies which enable a person to maintain functional ability. Examples include wheelchairs, walkers, and hospital beds.
DURABLE POWER OF ATTORNEY
A person's appointment of a representative to act on his or her behalf via a legal document that remains in effect in the event of incapacity of the grantor. This is specifically different than a regular power of attorney that ceases to act at the time of disability.
ELDERCARE LOCATOR
A national hotline service that refers you to local services if you or someone you know needs long term care. The number is 800-677-1116. See also ELDERCARE LOCATOR
ELIMINATION PERIOD (DEDUCTIBLE PERIOD)
The number of consecutive or accumulative days from the start of any confined or nonconfined care before benefits are payable. Examples may include 0, 30, 90 and 180 day periods. The longer the period, the lower the premium.
EQUIPMENT PURCHASES
Purchases of medically appropriate equipment. See policy for limits.
EXPENSE RATIO
The expense ratio is calculated by dividing the operating expenses by the total premiums received for the year.
FREE-LOOK PERIOD
If you change your mind after buying a policy, most states allow you to return the policy within 30 days. Get written evidence of this option when you receive the policy.
FUNCTIONAL AGE
An assessment of age based on physical or mental performance rather than on chronological age. Same focus is used for impaired annuities. You are older (younger) than your years.
FUNCTIONALLY DEPENDENT ELDERLY
People who need assistance from another person to manage daily tasks.
FUNCTIONALLY DISABLED
A functionally disabled person is one who has cognitive impairment or is unable to perform a prescribed number of activities of daily living (ADL's) as per the insurance policy. Additionally, some insurance policies require that the treatment must be medically necessary before they will pay any benefits. Note this same type restriction exists between tax and on tax qualified policies.
GERIATRICS
The study of physical and mental changes in persons as they age - including the diagnostic treatment and prevention of disorders. Doctors are still limited in such expertise but more are taking additional courses simply because of the number of aged.
GUARANTEED RENEWABLE FOR LIFE
The insurance company cannot cancel or refuse to renew a policy as long as the policyholder pays premiums on time. But they CAN increase rates for an entire group within a state. This has caused major problems for some elderly since they had to lapse policies that became too expensive. You need to review past history and experience to see if their initial premiums were too low since, if they were, the company has already asked for increases (call your state insurance department). It happens too frequently with new inexperienced companies.
SPECIAL NOTE- The policy premiums MAY be increased if the company raises rates for all policyowners of the same class within the state. Many companies have done so in the past; many more will do so in the future, particularly those that underpriced new policies. Also recognize that many companies WILL be sold in the next 10, 20+ years and the new company may do anything they want (as allowed by law) irrespective of what the old company said to you.
HANDS ON ASSISTANCE means the physical assistance of another person without which the individual would be unable to perform the ADL
HEALTH CARE POWER OF ATTORNEY
A person designated as having a medical durable power of attorney to make medical decisions on behalf of another person. Must be in writing and in conformance to state statutes.
See LIVING WILL AND HEALTH CARE DIRECTIVE: No, these are not the forms but certain questions you should ask yourself about the treatment you would like.
HIPAA
The Health Insurance Portability and Accountability Act of 1996 became law on January 1, 1997. The Act specifies requirements that a long-term care insurance policy must meet in order that premiums paid may be deducted as medical expenses, and benefits paid not be considered taxable income.
Note- simply because it is non taxable does NOT mean that all non tax qualified benefits ARE taxable. That's because the benefits may be used as a deduction for medical costs when they exceed 7.5% of AGI- see your tax adviser.
HOME AND COMMUNITY BASED CARE
Long Term Care that is provided in your home by a Home Health Care Provider; in Your Home by an Independent Caregiver; or in an Adult Day Care center.
HOME CARE AGENCY
Means an agency or organization which provides Home Care and is state licensed (in states where required) or accredited by the National Home caring Council, a Division of the Foundation for Hospice and Home Care, or the Joint Commission on Accreditation of Health Care Organizations, or the National League for Nursing. Individual plan of care records are kept on each patient, there is supervision by a qualified professional (RN or licensed social worker), and the facilities employees receive appropriate specialized training.
HOME HEALTH AIDE
A health worker employed by a Home Health Agency, other than a doctor, nurse, or therapist, who provides help at home with activities of daily living, and in some cases homemaker or companion services.
See HOW TO CHOOSE A HOME CARE PROVIDER LINK: This is the site for the National Association for Home Care- non profit home care and hospice care agencies.
HOME HEALTH CARE
Services provided by a state licensed agency and includes services provided by a nurse, home health aide, nutritionist, or occupational, speech, respiratory, or physical therapist but does not require confinement in a nursing home. Services provided by members of your family, special companions, or homemakers are not usually covered. This care is not covered by all insurance companies nor by all policies. It may, however, be covered as part of the long-term care policy, an option or rider available with the policy, or a separate policy. It is a expensive addition but may be worthwhile since it can help delay the entrance to a home.
The care must include part time (intermittent) skilled nursing care and must be prescribed by a physician.
The home health care agency must be approved by Medicare.
The services are provided on a visiting basis in the person's home or if it necessary to use equipment that cannot be readily available in the home, on an outpatient basis in a hospital, skilled nursing facility or licensed rehabilitation center.
Special Note: The option is best utilized by those individuals who have a family or support group of friends in the community since home health care is NOT a substitute for nursing home care. If you are single with limited social contacts, the benefit may not be that viable.
HOME HEALTH CARE PROVIDER
An entity which provides home health care or Hospice Services and:
1. Has an agreement as a provider of home health care services or Hospice Services under the Medicare program; or
2. Is licensed or accredited by state law as a home health care agency or hospice, if such licensing or accreditation is required by the state in which the care is received; or
3. Is a licensed therapist, a registered nurse (R.N.), a licensed practical nurse (L.P.N.), or a licensed vocational nurse (L.V.N.) operating within the scope of his or her license.
Home health care services include services provided by a medical social worker, home health aide, homemaker, and similar services.
HOSPICE CARE
This means a program of care for terminally ill patients that is ordered by a physician and received in the insured's home. The purpose is to all the patients to be a comfortable as possible till death. Counseling services are commonly provided to both the patient and family members.
Care can be provided in an institutional setting or in the home
See HOSPICE: What to consider, how they help. One person quoted those in hospices as being the finest, most dedicated and caring people you will ever meet.
INCOME RULES
Income also effects Medicaid eligibility and may be defined as all income received from any source. Income can be derived from any one or any combination of, the following: Social Security, interest, investments, trusts, rental property, assistance from family members, pensions and annuities. If your income is over a specified amount you can be denied public assistance.
This is, however, a most contentious issue and misunderstood by many. The income limits are most severe for the person on Medicaid. However, there is far more latitude for the at home spouse and may even be increased if it is insufficient to provide adequate care.
See MEDICAID LONG TERM CARE LINK: This is a most involved area for those that are poor and the site addresses Medicaid payments for nursing home care, home health care services, hospice, more.
INCONTINENCE
Inability to voluntarily control bowel or bladder function. Best to try and use therapy to try to regain continence since the use of diapers tends to have the situation get worse. Further, the cost of diapers and other extras may be an added cost that is beyond the daily limit.
INDEMNITY BENEFIT
When a policy specifies a particular daily benefit, the amount will be paid regardless of what the facility charges for the policyholder's care. Most policies pay just for the cost of care to the limit contracted.
INFLATION RATE
This is the rate at which the cost of long-term care is expected to increase in the future. Historically is rate is 1-2% higher than the overall U.S. inflation rate (e.g. the consumer price index). Since the compounded rate of inflation for policies is 5%, some say that even with this use, the cost of care will far exceed the amount a policy provides.
INSTITUTIONALIZATION
A person's admission to an institution, such as a nursing home.
INSTRUMENTAL ACTIVITIES OF DAILY LIVING (IADL's)
A definition of IADL's include the ability to do heavy housework, laundry and meal preparation, grocery shopping, transportation, getting around outside, getting to places outside of walking distance, maintaining yard and home, reading and similar. Those just listed are probably insurable. But the next may NOT be- managing day to day bill paying, check writing, using the telephone, and self management of taking medications. In those cases, the insurer may find the individual already too mentally incompetent, i.e., dementia.
INTERMEDIATE CARE
Care provided by licensed medical professional acting under the supervision of a physician. This level of care provides a planned, continuous program of nursing care that is preventive or rehabilitative in nature.
Care is less than that provided by a skilled care facility but more than a custodial care facility. About 4.5% of current nursing home patients are covered under this definition. Such care is NOT covered by Medicare
ISSUE AGES
While most policies are sold around age 65, policies may issues as low as 18 and as high as 85+. Those at higher ages are very restrictive and/or expensive
JOINT COMMISSION ON ACCREDITATION OF HEALTHCARE ORGANIZATIONS (JCAHO)
Joint Commission on Accreditation of Healthcare Organizations is an independent, not-for-profit organization that evaluates and accredits nearly 20,000 health care organizations and programs, including ambulatory care centers, behavioral health care organizations, health plans, home care organizations, hospitals, laboratories, long term care facilities, and long term care pharmacies.
LEVEL PREMIUM
The premium you pay when you buy a policy will stay constant and will not increase because you get older or if your health changes. This is called non cancelable. If, however, the policy is guaranteed renewable, it can be raised by the insurer for an entire group of policy holders in a state. A major problem since some companies have underbid prices to get a market share of the business.
LIFETIME WAIVER OF PREMIUM FOR SURVIVOR
In the event of the policyholder's death or a covered spouse's death subsequent to a specified number of years the surviving person may continue the policy in force for the rest of his or her life and all subsequent premiums will be waived. Not all companies provide such an option.
LIVING WILL
A document which enables a person to declare his or her wishes in advance concerning the use of life-sustaining procedures in the event of a terminal illness or injury when the person has become incompetent. Any formally drawn will or living trust should automatically include this document. State statutes may also indicate how they are drawn.
LONG TERM CARE
Long term care services are those provided by nursing facilities that offer 24-hour nursing or rehabilitative care. Long term care centers are known as nursing homes, skilled nursing facilities, or long term care facilities and provide both short-term or residential care. Typically, a resident who needs continuing care following an acute episode uses the rehabilitative and nursing services found in these settings. Many residents in these settings have discharge goals to other settings such as to home or to an assisted living community.
Long Term Care Facility
A place which:
1. Is licensed by the state where it is located; and
2. Provides nursing care on an inpatient basis under the supervision of a physician; and
3. Has 24 hour-a-day nursing services provided by or under the supervision of a registered nurse (R.N.), licensed vocational nurse (L.V.N.), or licensed practical nurse (L.P.N.), and
4. Keeps a daily medical record of each patient; and
5. May be either a freestanding facility or a distinct part of a facility such as a ward, wing, unit, or swing-bed of a hospital or other institution.
These facilities are sometimes known as nursing homes, extended care facilities, convalescent care facilities, or nursing sanitarium and usually admit those people requiring either a constant or semi-constant skilled level of medical care.
A Long Term Care Facility does not mean a hospital or clinic, an Alternate Care Facility, a boarding home, a place which operates primarily for the treatment of alcoholics or drug addicts, or a hospice.
LOSS RATIO
This is a percentage used by insurers to indicate how much is paid out in benefits for each dollar they take in as premiums. For example, if $8 million is paid out and $10 million taken in, the loss ration is 80%. Due to the "newness" of companies the expected loss ration may be much, much higher as years progress. Question is therefore- is there enough in reserves to pay anticipated claims?
MAINTENANCE OR PERSONAL CARE SERVICES
Any care where the primary purpose of which is the provision of needed assistance with any of the disabilities as a result of being chronically ill (including the protection from threats to health and safety due to Severe Cognitive Impairment).
MANAGED CARE
The establishment of control mechanisms before, during, and after delivery of services that ensure high quality and cost-effective care.
See MANAGED CARE GLOSSARY LINK: An extensive 26 page glossary of terms you should familiarize yourself with when using a managed care facility.
MEALS ON WHEELS
A program designed to deliver meals to the homebound. Always check your Area Agency on Aging for info on any senior service in your area.
MEDICAID
This is a joint Federal and State government program to pay medical costs for the poor. If your financial assets and monthly income are below certain allowed levels, Medicaid will pay nursing home and some home care costs if you are disabled. Some people with substantical assets are trying to gift or shelter such assets so that they cna sue Mediciad later on. But the warning is- you never want to die in a Medicaid ward. Care may simply be substandard since Mediciad may not pay the nursing home even the amount of care consumed.
See MEDICAID LONG TERM CARE LINK: This is a most involved area for those that are poor and the site addresses Medicaid payments for nursing home care, home health care services, hospice, more.
MEDICAID STATE INFORMATION LINK: This site provides contact entities, addresses and telephone numbers of direct assistance.
MEDICAID SPEND DOWN
This is the process of spending your savings on long-term care, in order to qualify for Medicaid benefits. Unmarried people must use up all but $2000 (not including a primary home, a car, personal effects, and burial expenses) before Medicaid will pay. For couples, the spouse not receiving care can keep some of the joint assets. The amount varies from state to state and is roughly 50% of assets from a minimum of approximately $15,000 to a maximum of approximately $84,000. (Do not rely on these figures per se. You need to contact your state for specifics. The limits also change each year)
MEDIGAP/MEDICARE SUPPLEMENTAL PLAN
Medigap or Medicare Supplement policies are private insurance policies that pay for care that is approved but not paid by Medicare. Policies do NOT provide long term care benefits.
MEDICALLY NECESSARY
One type of policy uses this basic guideline: A doctor certifies that a policy holder's admission is required due to injury or sickness. Tricky definition- particularly if the company doctor is the one that decides.
MEDICAL UNDERWRITING
This is the process of judging risk by assessing the medical history of the client from medical records or a physical assessment BEFORE a policy is issued. (Some old policies may have been issued with underwriting at claim. Many policyowners subsequently turned down. Check such policies- they may be effectively useless). The company will universally order an APS (Attending Physician's Statement) if there any indication of past history that needs to be checked.
MEDICARE
A Federal Government program to provide health insurance for everyone over 65. Medicare pays a small amount (with many stipulations) for long-term care if you are receiving skilled or rehabilitative services. It will not pay for "maintenance" care or help with activities of daily living.
See MEDICARE AND MEDICAID LINK: This site is administrated by the HCFA- Health Care Financing Administration- and lets consumers and professionals retrieve information about literally every aspect of these two explosive issues.
MENTAL AND NERVOUS DISORDERS
Refers to a mental or emotional disease or disorder of any kind that does not have an organic origin. (Alzheimer's and senile dementia are considered organic.) These "nonorganic" mental and nervous disorders and disorders due to alcohol or drug related problems are not covered by most insurance policies. Of specific note is that depression is not covered- though when one is sick and aged, depression is normally present.
NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS (NAIC)
A national organization of state officials charged with regulating insurance. NAIC has no official power but wields considerable influence. The association was formed to promote national uniformity in insurance regulations. See also NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS LINK:
The NIA’s mission is to improve the health and well-being of older Americans through research, and specifically to:
Support and conduct high quality research on:
-aging processes
-age-related diseases
-special problems and needs of the aged
Train and develop highly skilled research scientists from all population groups
Develop and maintain state-of-the-art resources to accelerate research progress
Disseminate information and communicate with the public and interested groups on health and research advances and on new directions for research.
NONCANCELABLE
This feature means that a company can never cancel a policy for any reason EXCEPT nonpayment of premiums. And they cannot raise rates either. Such policies universally cost more than guaranteed renewable (where rates may be changed) and you need to do a thorough review before selecting.
NON-DUPLICATIONS OF BENEFITS
The policy will only pay for covered expenses that are in excess of what Medicare or other governmental health plans (except Medicaid) pay. Most Carriers exclude deductibles and coinsurance under Medicare from their coverage.
NONFORFEITURE BENEFITS
This benefit returns part of what the policyholder has paid in premiums if the policyholder chooses to cancel the insurance coverage. Such benefits follow the standard life policy.
They may include
1. Cash surrender value
2. Reduced paid up insurance
3. Extended term Insurance
NON-QUALIFIED POLICIES
This type of policy is not intended to meet the definition under section 7702B(b) of the IRC. Benefits received under a Non-Qualified plan may have some adverse tax consequences to you. While some marketing material indicate the entire policy payment will be taxable, recognize that the costs for nursing home care are a deduction against 7.5% of Adjusted Gross Income. If you have a $50,000 payment and your AGI was $100,000, you would be able to use a medical deduction for expenses exceeding $7,500. This means the taxation for a policy that might provide faster and better benefits is not that onerous- contact your tax adviser.
NURSING HOME
May be licensed for skilled as well as general custodial care. Some are approved for Medicare/Medicaid. They may include residential Care or Residential Care Facility for the Elderly. This is a most confusing area for selection and there are lists and lists of suggestions See EVALUATION OF NURSING HOMES: From "Nursing Homes" by Forest. As well as EVALUATION OF NURSING HOME LINK and FACILITIES LINK. You must read your policy very carefully.
OCCUPATIONAL THERAPY
Rehabilitation through the teaching of an art or a specific occupation for persons physically or mentally impaired, with the intent to restore functional ability.
OUT OF POCKET EXPENSES
Those health care costs that must be paid for by the policyholder because they are not covered under an insurance contract or are in excess of policy coverage. This may not be apparent to many policyholders- specifically where Alzheimers is concerned. Such patients in the latter stages of the disease require intensive hands on care that can be very costly.
PAID UP POLICY
If the policyholder pays a higher premium for a limited number of years, say for ten or twenty years or until a certain age, at that point the policy will be "paid up." This policy is also a non-cancelable policy meaning that rates cannot be increased. Be aware that most policies are guaranteed renewable- altogether different since such rates can be raised. Do your homework and compare everything.
PARTNERSHIPS
A state-level joint public/private sector program that allows consumers to buy an approved long term care insurance policy to conserve "x" dollars and still be able to qualify for Medicaid at a later date. States with federally authorized partnerships include Connecticut, New York, Indiana and California. For example, assume you bought a partnership policy with $100,000 of nursing home coverage and went into a home. Once you had expended the $100,000 of the policy, you could apply for Medicaid coverage but STILL BE ALLOWED to retain $100,000 of assets to pass on to beneficiaries. If you had not done this, Medicaid would be able to attach those assets against the costs of care.
But the issue is this- you do not want to die in a Medicaid ward if you can avoid it. I would opt for a standard policy in almost all cases.
PERSONAL CARE
The hands on service to assist with the ADL's- bathing, eating , dressing , toileting, transferring, mobility. continence, etc.
PROBATIONARY PERIOD: Many policies cover all conditions once coverage is accepted. Others may require a 6 month period before any pre-existing conditions are covered. Some state statutes mandate immediate coverage.
PRE-EXISTING CONDITIONS
Waiting period after buying a policy before the policyholder will be covered for any pre-existing conditions. Many states mandate that all conditions are covered immediately- others may allow 6 months. Companies will also vary so you need to address this issue before selection.
PREMIUMS
Premiums are the cost of insurance and depend on your age, the amount of coverage or benefits you choose such as elimination period, home health care, compounding and will depend on your current health. A majority of policies utilize non cancelable policies which allow the insurer to raise the premium in future years, as long as it is raised for all holders of the same policy in the same state.
NOTE: The compounding increase and the Home Health Care options are the most expensive additions to a standard policy. But the compounding is almost mandatory for younger policyowners (under age 70) and the Home Health Care is the most sought after addition since almost all patients would prefer to stay in their home as long as possible.
PREVAILING EXPENSES
Expenses, fees or charges actually incurred by an Insured Person which do not exceed the Normal Charge made for similar care, service or other items. For the types of services recognized by Medicare, the Normal Charge is the upper level of the Medicare reimbursement rate; and for all other services, the normal charge is 120% of the average charge based on surveys conducted by trained case managers and independent agencies to determine the current costs of all similar services in your community and the surrounding areas, provided to persons with comparable medical conditions or impairments in the locality where they are received. An expense, fee or charge is considered to be incurred on the day on which the care, service or other item forming the basis for it is received.
PRIOR CARE REQUIREMENTS
Most current policies no longer have this requirement – that they would only pay for nursing home care if you had just been hospitalized or they would only pay for home care if you had been hospitalized or in a nursing home recently. Check the policy for this provision before you buy. But also check old policies since the requirement for a 3 day hospital stay and admittance to a nursing home for skilled care within 30 days literally means the policy will never be triggered.
RATING CLASS
Means a population segment classified by actuaries as having similar coverage risks. See Preferred, Standard and Substandard below.
RECURRING CONDITION
The policyholder may need treatment for a condition that recurs periodically. If it happens within a short time after benefits have been stopped, another separate elimination may not be required. Again, one needs to view the policy in detail.
REHABILITATION
The goal of restoring disabled policyholders to maximum physical, mental and vocational independence, and productivity commensurate with their limitations.
RESPIRATORY THERAPY
Rehabilitative services for respiratory impairments, such as emphysema and chronic bronchitis.
RESPITE CARE
Respite care is for the policyholder's primary caregiver to provide relief from caregiver duties. Such respite may be for 7 or 14 days and, again, is one of the features that needs to be reviewed for each policy. See also RESPITE CARE CHECKLIST
RESTORATION OF BENEFITS
The original maximum benefit period restores itself when benefits have not been required for 180 days whether in an institution or home or nonconfined setting.
For example, if you used $5,000 of your benefit against a maximum of $100,000 but then did NOT use your policy for180 days, the full $100,000 is restored. Various comments if it is worth the substantial added cost. May be more valuable for younger owners where disability is a much greater statistical factor. When older, the odds of recuperating are far less and the additional cost debatable.
RETURN OF PREMIUM
The carrier will return to the policyholder an amount of cash determined by a specific chart upon the carrier's receipt of the proof of the policyholder's death, or after the carrier receives notice that the policyholder wishes to terminate the policy and claim the return of premium amount.
This is another debatable rider since the cost is from 15% to 30% more. Very few people purchase this option.
RISK
Preferred, Standard and Substandard Risk
Preferred risk is (supposedly) identifying those unique individuals who are in excellent health and have currently have little or no health problems. These accepted have th lowest premiums. Caution is advised two fold- don't accept quotes for preferred when you know that you are not in the best of health. Most reputable companies will simply approve at a standard rate which is higher. Secondly, if you are in standard or poor health and are approved as preferred, the company may be buying a book of business and you should expect higher premiums or poorer coverage later on.
Standard risk are those individual that the underwriter is willing to accept even though there are minor health issues
Substandard risk Such individuals will be denied coverage outright or have to pay a higher premium or accept lower coverage.
NOTE: While purchasers may think that their is a standardization in the industry for levels of underwriting, the truth is that newer companies, in particular, may be severely limited in expertise and assign ratings that are unsupportable. This is referenced from a 1999 AM Best survey where it was stated that there are perhaps only 5 to 50 experienced underwriters in the field.
SANDWICH GENERATION
Persons caring for both dependent children and parents or relatives. Women are usually the caregivers about 75% of the time.
SCHEDULE OF BENEFITS
Means a schedule of benefit coverage that is provided to each Covered Person which establishes Premium amounts, premium payment mode and a summary of the benefits and limitations that apply.
SENILE DEMENTIA
An commonly used term for dementia though reflecting older and outdated views that simply getting old brought on dementia.
SERVICE PLAN
A written description of the Long-term Care services appropriate to meet your needs. This plan will identify the type and frequency of services you need. It will also indicate any benefits you will receive under the plan for the services rendered.
SEVERE COGNITIVE IMPAIRMENT
A deterioration in intellectual capacity that is both comparable to (and includes) Alzheimers disease and similar forms of irreversible dementia and measure by clinical evidence and standardized tests.
The problem, in my mind, is that the definition is insufficient in clearly stating what is "severe" as defined in tax qualified policies. At another area of my articles- Alzheimers Diagnosis- the definition of severe generally used by some physicians is so restrictive as to limit the trigger for an extended period of time. While tax qualified policies are less expensive by around 10%, they may be debatable if care is not offered when needed.
SHORT TERM STAY
Residence in a nursing facility usually for rehabilitative or convalescent purposes. These are more prevalent than years ago due to Medicare limiting the number of hospital days per incident. Remember the saying regarding hospitalization- "Medicare leaves you quicker but sicker". Therefore, the statistics for short term nursing home stays are reflective of the Medicare controls.
SKILLED NURSING CARE
This is for medical conditions requiring care by skilled medical personnel, such as registered nurses and professional therapists. The care must be available 24 hours a day and is ordered by a doctor, usually in accord with a care plan. It's the only type of care eligible for reimbursement in a skilled nursing facility under Medicare. However, in terms of overall coverage, Medicare covers only about 0.5% of all nursing home patients due to the inability to patients to be in a hospital for three days and then enter a nursing home within 30 days of discharge.
SOCIAL SERVICES
Advisory and counseling services usually provided by social workers to assist persons with problems that concern housing, transportation, meals, etc. Always contact your Area Agency on Aging
SPEECH THERAPY
Rehabilitative services for those with speech impairments.
STANDBY ASSISTANCE
Standby assistance means the presence of another person within arm's reach of the individual that is necessary to prevent , by physical intervention, injury while the individual is performing an ADL.
SUBACUTE CARE
Assistance provided by nursing homes for health services such as stroke rehabilitation and cardiac care for post-surgery that offers a lower cost alternative to hospital treatment of the same kind.
SUBSTANTIAL ASSISTANCE
Tax-qualified LTC policies must require that a disabled policyholder must need "substantial assistance" in performing at least 2 ADL's in order to receive benefits. "Substantial assistance" is defined as either "hands-on assistance" or "standby assistance."
SUBSTANTIAL SUPERVISION
Under a tax-qualified LTC policy, an insured with cognitive impairment may receive benefits if he or she requires "substantial supervision." This is defined as continual supervision (such as cueing by verbal prompting, gestures, or other demonstrations) that is needed to protect the severely cognitively impaired individual from threats to his or her health or safety. An example is the need for someone to be present to prevent the individual from wandering.
TAX-QUALIFIED POLICIES
Beginning January 1, 1997, long-term care policies meeting certain requirements qualify for favorable tax treatment. Buyers of tax-qualified (TQ) plans can deduct the premiums if they itemize deductions on their Federal tax return. The maximum deductible is $200 if 40 or under, $375 if 41-50, $750 if 51-60, $2000 if 61-69, $2500 if 70+.
Premiums are treated like other health insurance and medical expenses, and must total more than 7.5% of adjusted gross income. If total health expenses are less than this amount, premium deductibility will not reduce your tax.
Also, benefits received from a TQ plan are not taxed, up to $175 a day, while benefits received from a non-TQ plan may be taxable (though remember the payments for care are a deduction when they exceed 7.5% of AGI- see your tax adviser).
Tax Qualified versus non tax qualified and the different interpretations for assistance possible:
1. Under a cognitive impairment trigger, the individual would note be eligible for benefits under a qualified policy until he/she required continual supervision. The difficulty is the term "severe" since none of the qualified policies define. Be VERY careful since it could be a major problem in subsequent years in that a company could easily decline coverage.
2. That same person would only need supervision(but not necessarily continual supervision) under a non qualified policy
3. Those needing assistance with activities of daily living will need to be in such bad shape as to need both hands on assistance and standby assistance in order for benefits to be triggered under a qualified policy (Or even worse. See my section on Alzheimers Diagnosis. Very illuminating).
UNDERWRITING
The underwriting process is when the insurer examines your application to decide whether it is willing to take the risk of insuring you. It normally requires an APS (Attending Physician Statement) from your doctor if you have had any specific reasons to see a doctor with "x" months or years. Depending on age and conditions, a telephone or personal survey will also normally be conducted to determine risk.
VIATICAL SETTLEMENT
This is the sale of a life policy for those that are terminally ill. A doctor will certify that you have only "x" months to live. By presenting the policy to a viatical company, it may be sold at a discount. These are difficult and hard to analyze. But, properly structured, it can provide needed monies prior to death.
WAIVER OF PREMIUM
If a policyholder is receiving benefits, policy premium payments are stopped. If benefits stop before policy is exhausted, premiums resume and no back payments are required. This is standard for most policies.