8-hour Partnership Long-Term Care Policies

Table of Contents

Chapter 1: Partnership Program Creation	1
Defining Long-Term Care	2
Service Providers	3
Nursing Homes	3
Assisted Living Facilities	3
Care at Home and in the Community	4
History of the Partnership for Long-Term Care	5
Partnership Policy Creation	7
State Amendments and Waivers	8
Chart: Dollar-for-Dollar Chart Regarding Asset Protection	11
Informal versus Formal Care	12
New Federal Legislation: The Deficit Reduction Act of 2005	13
Health Insurance Portability & Accountability Act (HIPPA)	14
Chronically Ill	14
Grandfathered Policies	15
OBRA 1993 Provisions and the Partnership for Long-Term Care	15
Sec 1917(b) paragraph 1 subparagraph C (recovering funds from estates)	16
Sec 1917(b) paragraph 3 (state waivers)	16
Sec 1917(b) paragraph 4 subparagraph B (defining estate)	16
Promoting Partnership Long-Term Care Plans	16
Program Growth	17
Partnership Participation	18
Public Education	18
DRA Requirements	19
Unfair Claim Practices Defined Under the NAIC	20
Model Unfair Claims Settlement Practices Act	20
Unfair Claim Distributions	21
Policy Benefits Chosen at the Time of Application	22
Mandatory Protection in Partnership LTC Policies	22
FPO and ABI	22
Suitability Forms and the NAIC Model Regulations	23
Reciprocity between States	24
State Funding	24
Chapter 2: Program Benefits	25
Making Benefit Choices	25
Daily Benefit Options	27
Expense-Incurred and Indemnity Methods of Payment	28
Determining Benefit Length	28
Asset Protection in Partnership Policies (dollar-for-dollar, total asset & hybrid)	29
Policy Structure	29
Home Care Options	30
Inflation Protection	31
Simple and Compound Interest	31
Required Rejection Forms (in some states)	32
Periodic Coverage Increase Options	32
Elimination Periods in LTC Policies	32
Policy Type: Comprehensive and Non-Comprehensive	33
Restoration of Policy Benefits	33
Preexisting Periods in Policies	34
Prior Hospitalization Requirements for Skilled Care	34
Deciding Between Federal Tax-Qualified & State Non-Tax Qualified Policies	35
Nonforfeiture Values	35
Waiver of Premium	37
Unintentional Lapse of Policy	38
Policy Renewal Features (Guaranteed Renewable and Non-cancelable)	38
Policy Exclusions: Items Not Covered by the LTC Policy	39
Extension of Benefits	39
Affordability of Long-Term Care Contracts	39
Standardized Definitions	40
Minimum Partnership Requirements	40
Benefit Duplication	40
Partnership Publication	40
Partnership Versus Traditional Policies	41
Abbreviations	41
Long-Term Illness Impacts Families	42
It’s a Partnership	43
Tax Treatment	44
Group Long-Term Care Insurance	45
Deciding When to Buy	46
Partnership Policy Requirements	49
Determining Policy Benefits	50
Industry Regulation	51
Medicaid	52
“Look-Back Period”	53
Initial Partnership Programs, the History	53
Case Management Services	55
Partnership Education Requirements	56
Partnership Policy Buyers	57
Partnership Policy Benefits	58
Adequate Coverage	59
Joint and Linked Long-Term Care Policies	59
Linked LTC Policies	60
Joint LTC Policies	61
Indemnity and Reimbursement Plans	62
Critical Illness Policies	62
Health Savings Accounts (HAS)	63
Chapter 3: Policy Considerations	64
What is a Traditional Long-Term Care Policy?	64
Policy Issue	64
Comprehensive and Non-Comprehensive Options	65
Medicare Benefits	65
Medicare Part A (Hospital Insurance)	66
Skilled Nursing Care Covered Under Medicare	67
Home Health Care	68
Hospice Care	69
Medicare Part B (Medical Insurance	69
Medicare Part C (Medicare Advantage)	71
Medicare Part D (Medicare Prescription Drug Coverage)	71
Medicare Supplemental Policies	71
The Original Medicare Plan	72
Medicare Advantage Plans	73
Protecting Assets	73
Medicaid Benefits	74
The Patient Protection and Affordable Care Act	75
Prescription Plan Donut Hole	75
In General	76
State Requirements	77
Relying on Insurance for LTC Payment	77
Insurance Pricing	78
Premium Mode	78
Age as a Pricing Factor	78
A Younger Market Developing	79
Reducing Benefits to Save Premium	83
Example	83
Guaranteed Renewable	84
Policy Review: 30 Day “Free Look”	84
“Notice to Buyer”	84
Policy Schedule	84
Policy Terminology	85
Elimination Periods in Policies	89
Policy Termination	89
Mental Impairments of Organic Origin	89
Hospitalization Requirements	89
Home and Community Based Benefits	91
Bed Reservation Benefit	91
Waiver of Premium	92
Alternative Plan of Care	92
No Policy Covers Everything	93
Age Misstatement	94
Third Party Notification	94
Reinstatement of a Lapsed Policy	95
Section 6021: Expansion of State LTC Partnership Program	96
NAIC 2000 Model Act	97
“Level Premium” Does Not Mean Unchanging Rates	98
Financial Requirements for Rate Increases	99
Rate Certification from the Insurer’s Actuary	99
Consumer Disclosure	99
LTC Personal Worksheet	100
Is the Policy Suitable for the Buyer?	100
Consumer Publications	101
Post-Claim Underwriting	102
Tax-Qualified Policy Statement	402
Replacement Notices	103
Policy Conversion	103
An Overview	103
The Model Act Applies to All	104
Policy Renewable Provisions	104
Payment Standards Must be Defined	105
Preexisting Standards	105
Policy Type must be Identified	105
ADLs	105
Life Insurance Policies with Accelerated Benefits	105
Nonforfeiture Provisions	106
Extension of Benefits	106
Home & Community Care	106
Additional Provisions for Group Policies	106
Outline of Coverage	107
Policy Delivery	107
No Field Issued LTC Policies	107
Policy Advertising and Marketing	107
Prior to the Sale	108
Shopper’s Guide	108
It’s Just Plain Illegal (Twisting, High Pressure Tactics, Misrepresentations)	108
Association Marketing	109
Following the Sale	109
Failure to Pay Premiums	109
Ethical Considerations	110
Full Disclosure	111
In Conclusion	111
Chapter 4: Financial Planning for LTC	113
The Importance of Planning	113
Cost of Care	116
Older Americans Act (OAA)	116
A Woman’s Issue	118
Chart: How Costs are Covered	119
Financial Planning Strategies	120
Asset Transfers	120
Reverse Mortgages	124
Annuities	127
Medicaid Spend-Down	129
Relying on Medicaid for Long-Term Care Payment	129
Using Insurance for Long-Term Care Expenses	130
Paying LTC Expenses Out-of-Pocket	131
Critical Illness Policies	132
Health Savings Accounts (HSA)	132
Using Life Insurance with Accelerated Death Benefits to Pay for LTC	133
Life and Viatical Settlement Agreements	134
Business of Viatical Settlements	135
Chronically Ill	135
Policy	135
Related Provider Trust	136
Special Purpose Entity	136
Terminally Ill	136
Viatical Settlement Broker	136
Viatical Settlement Contract	136
Viatical Settlement Provider	137
Viatical Settlement Purchase Agreement	137
Viator	137
License and Bond Requirements	137
License Revocation and Denial	139
Viatical Settlement Contracts and Disclosure Statements	140
Reporting Requirements and Privacy	140
Examination or Investigations	141
Confidentiality of Examination Information	143
Immunity from Liability	144
Disclosure to Viator	144
Disclosure to Insurer	149
General Rules	149
Prohibited Practices	151
Conflicts of Interest	152
Advertising for Viatical Settlements and Purchase Agreements	153
Fraud Prevention and Control	156
Fraud Warnings	156
Immunity from Liability	157
Confidentiality	157
Viatical Settlement Antifraud Initiatives	158
Injunctions; Civil Remedies; Cease-and-Desist	159
Unfair Trade Practices	160
Authority to Promulgate Regulations	160
Filial Responsibility Laws	160
Chapter 5: Terminology	165

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