8-hour Partnership Long-Term Care Policies

 

Table of Contents

 

Chapter 1: Partnership Program Creation

1

Defining Long-Term Care

2

Service Providers

2

  Nursing Homes

2

  Assisted Living Facilities

3

  Care at Home and in the Community

3

History of the Partnership for Long-Term Care

4

Partnership Policy Creation

7

State Amendments and Waivers

9

    Chart: Dollar-for-Dollar Chart Regarding Asset Protection

12

Informal versus Formal Care

13

New Federal Legislation: The Deficit Reduction Act of 2005

14

Questions that Remain Unanswered

14

Health Insurance Portability & Accountability Act (HIPPA)

14

  Chronically Ill

15

Grandfathered Policies

16

OBRA 1993 Provisions and the Partnership for Long-Term Care

16

  Sec 1917(b) paragraph 1 subparagraph C (recovering funds from estates)

17

  Sec 1917(b) paragraph 3 (state waivers)

17

  Sec 1917(b) paragraph 4 subparagraph B (defining estate)

17

Promoting Partnership Long-Term Care Plans

18

Program Growth

18

Partnership Participation

19

Public Education

20

DRA Requirements

21

Unfair Claim Practices Defined Under the NAIC

22

  Model Unfair Claims Settlement Practices Act

22

  Unfair Claim Distributions

23

Policy Benefits Chosen at the Time of Application

24

Mandatory Protection in Partnership LTC Policies

24

FPO and ABI

24

Suitability Forms and the NAIC Model Regulations

25

Reciprocity between States

25

State Funding

26

Chapter 2: Program Benefits

27

Making Benefit Choices

27

Daily Benefit Options

29

Expense-Incurred and Indemnity Methods of Payment

30

Determining Benefit Length

30

Asset Protection in Partnership Policies (dollar-for-dollar, total asset & hybrid)

31

Policy Structure

31

Home Care Options

32

Inflation Protection

32

Simple and Compound Interest

33

Required Rejection Forms (in some states)

33

Periodic Coverage Increase Options

33

Elimination Periods in LTC Policies

34

Policy Type: Comprehensive and Non-Comprehensive

34

Restoration of Policy Benefits

35

Preexisting Periods in Policies

35

Prior Hospitalization Requirements for Skilled Care

35

Deciding Between Federal Tax-Qualified & State Non-Tax Qualified Policies

36

Nonforfeiture Values

37

Waiver of Premium

38

Unintentional Lapse of Policy

39

Policy Renewal Features (Guaranteed Renewable and Non-cancelable)

39

Policy Exclusions: Items Not Covered by the LTC Policy

40

Extension of Benefits

40

Affordability of Long-Term Care Contracts

40

Standardized Definitions

41

Minimum Partnership Requirements

41

Benefit Duplication

41

Partnership Publication

41

Partnership Versus Traditional Policies

42

Abbreviations

42

Long-Term Illness Impacts Families

43

It’s a Partnership

43

Tax Treatment

45

Group Long-Term Care Insurance

46

Deciding When to Buy

46

Partnership Policy Requirements

49

Determining Policy Benefits

49

Industry Regulation

51

Medicaid

52

  “Look-Back Period”

53

Protecting Partnership Policyholder Assets

54

  Case Management Services

56

Partnership Education Requirements

57

Partnership Policy Buyers

59

Partnership Policy Benefits

59

Adequate Coverage

60

Joint and Linked Long-Term Care Policies

60

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

The Donut Hole

76

In General

76

State Requirements

76

Relying on Insurance for LTC Payment

77

Insurance Pricing

77

Premium Mode

78

Age as a Pricing Factor

78

A Younger Market Developing

79

Reducing Benefits to Save Premium

80

Guaranteed Renewable

81

Policy Review: 30 Day “Free Look”

81

“Notice to Buyer”

81

Policy Schedule

82

Policy Terminology

82

Elimination Periods in Policies

86

Policy Termination

86

Mental Impairments of Organic Origin

87

Hospitalization Requirements

87

Home and Community Based Benefits

88

Bed Reservation Benefit

88

Waiver of Premium

89

Alternative Plan of Care

89

No Policy Covers Everything

90

Age Misstatement

91

Third Party Notification

91

Reinstatement of a Lapsed Policy

92

Section 6021: Expansion of State LTC Partnership Program

93

NAIC 2000 Model Act

94

     “Level Premium” Does Not Mean Unchanging Rates

96

     Financial Requirements for Rate Increases

96

     Rate Certification from the Insurer’s Actuary

96

     Consumer Disclosure

97

     LTC Personal Worksheet

97

     Is the Policy Suitable for the Buyer?

97

     Consumer Publications

99

     Post-Claim Underwriting

99

     Tax-Qualified Policy Statement

99

     Replacement Notices

100

     Policy Conversion

100

An Overview

100

The Model Act Applies to All

101

     Policy Renewable Provisions

102

     Payment Standards Must be Defined

102

     Preexisting Standards

102

     Policy Type must be Identified

102

     ADLs

102

     Life Insurance Policies with Accelerated Benefits

103

     Nonforfeiture Provisions

103

     Extension of Benefits

103

     Home & Community Care

103

     Additional Provisions for Group Policies

104

     Outline of Coverage

104

     Policy Delivery

104

     No Field Issued LTC Policies

104

     Policy Advertising and Marketing

104

     No Policy Covers Everything (Again)

105

     Prior to the Sale

105

     Shopper’s Guide

105

     It’s Just Plain Illegal (Twisting, High Pressure Tactics, Misrepresentations)

105

     Association Marketing

106

     Following the Sale

106

     Failure to Pay Premiums

106

Ethical Considerations

107

Full Disclosure

108

In Conclusion

108

Chapter 4: Financial Planning for LTC

110

The Importance of Planning

110

Cost of Care

113

Older Americans Act (OAA)

114

A Woman’s Issue

115

     Chart: How Costs are Covered

116

Financial Planning Strategies

118

Asset Transfers

118

Reverse Mortgages

121

Annuities

123

Medicaid Spend-Down

124

Relying on Medicaid for Long-Term Care Payment

125

Using Insurance for Long-Term Care Expenses

126

Paying LTC Expenses Out-of-Pocket

126

Critical Illness Policies

127

Health Savings Accounts (HSA)

127

Life Insurance with Accelerated Death Benefits

128

Life and Viatical Settlement Agreements

129

Business of Viatical Settlements

130

Chronically Ill

130

Policy

131

Related Provider Trust

131

Special Purpose Entity

131

Terminally Ill

131

Viatical Settlement Broker

131

Viatical Settlement Contract

131

Viatical Settlement Provider

132

Viatical Settlement Purchase Agreement

132

Viator

132

License and Bond Requirements

132

License Revocation and Denial

134

Viatical Settlement Contracts and Disclosure Statements

135

Reporting Requirements and Privacy

136

Examination or Investigations

137

Confidentiality of Examination Information

139

Conflict of Interest

139

Immunity from Liability

140

Disclosure to Viator

140

Disclosure to Insurer

145

General Rules

145

Prohibited Practices

147

Conflicts of Interest

149

Advertising for Viatical Settlements and Purchase Agreements

149

Fraud Prevention and Control

153

Fraud Warnings

153

Immunity from Liability

153

Confidentiality

154

Viatical Settlement Antifraud Initiatives

154

Injunctions; Civil Remedies; Cease-and-Desist

155

Unfair Trade Practices

156

Authority to Promulgate Regulations

156

Filial Responsibility Laws

157

Chapter 5: Terminology

162

 

 

 

 

United Insurance Educators, Inc.

8213 – 352nd Street East

Eatonville, Washington 98328-8638

mail@uiece.com

www.UIEce.com

 

 

Welcome

 

  There was a time when any appropriately licensed insurance producer could present and sell long-term care policies.  Today’s policies are complicated and today producers who work in this market must be specialists in the long-term care marketplace.  This course is designed for those agents.

 

  Each state mandates specific education requirements.  Some states require Partnership long-term care education as part of (not in addition to) other state requirements while other states simply have a Partnership continuing education requirement, but the course need not actually be part of the state’s formal approval process.  That is not the case for insurance companies.  Since the Partnership long-term care requirement is a federal requirement, insurers must be able to validate the education that has been taken.  As a result, our LTC courses are registered on the Clear-Cert website and they meet the federal guidelines for Partnership education.

 

 

Please Complete Your Own Work

 

  The states require each insurance producer and adjuster to complete their own education without help from another person or entity.  If we learn that another individual allowed you to use their completed test as a marker we will deny you a certificate of completion, as required by the states.  No refund will be due as a result of this action.

 

  There is a reason the federal government has mandated education for agents selling or marketing Partnership long-term care policies: they are complicated.  It is important that all in the industry know what they are doing.

 

 

Copyrighted Material

 

  All of our courses are copyrighted; this means you may not use it in part or whole without our express written permission.  Other educators may not use our course in any way, whether used in a classroom setting or as part of an online course.  Our course may not be used as a resource for creating another course.  We will lodge a complaint with both the state and our attorney when this occurs.

 

  Your cooperation is appreciated.