Chapter 1

The Process of Long Term Care

 

 

 

    There was a time when the general population did not understand the need for long-term medical care provided outside of the home.  It was assumed that family and friends would provide any personal care required with aging.  As our population demographics have changed, the availability of family and friends providing personal care on a prolonged basis has disappeared.  Today, most people realize that our children and friends probably cannot provide care on a long-term basis.

 

Defining Long-Term Care

 

What exactly is long-term care? 

  Sometimes the answer to that question depends upon the source.  The 2004 Medicare handbook defines long term care as A variety of services that help people with health or personal needs and activities of daily living over a period of time.  Long-term care can be provided at home, in the community, or in various types of facilities, including nursing homes and assisted living facilities.  Most long-term care is custodial care.  Medicare doesnt pay for this type of care if this is the only kind of care you need.

 

  The California Partnership Comprehensive Brochure states: Long-term care is the assistance needed over an extended period of time to manage, rather than cure, a chronic condition, such as, arthritis, stroke or dementia, or the frailties of aging or accidents.

 

  Long-term care generally excludes care provided in the hospital.  It specifically applies to care in a nursing home, home health care setting, or other institution providing non-hospitalization benefits.

 

  The federal law considers long-term to mean care provided for 90 days or more.  Most long-term care definitions relate to the inability to perform what has been termed the activities of daily living.  These activities include eating, toileting, transferring (from bed to chair), bathing, dressing, and continence.  While it is common for the elderly to be limited in their activities, as they increasingly cannot perform one or more of the daily activities of living they are likely to need some type of long-term care.

 

 

Where do you go for long-term care?

 

  In the past, there was no question where an elderly man or woman went for prolonged care: their daughters home if she was unable to come to theirs.  Today, fewer people have the option of moving in with a daughter for care.  Most women now work outside of the home so they are not available for daytime care.  We are also a mobile nation.  It is not unusual for the children to live out-of-state.

 

  Since the need for care often develops gradually, let us follow the path that is commonly taken with age:

 

  Mildred has been noticing that getting around is harder than it used to be.  Her arthritis has made movement increasingly difficult.  Her stamina has also gone down considerably.  Mildred used to do all of her housework and gardening, but gradually that has changed.  She doesnt plant spring flowers anymore.  The weeds have gradually overtaken the flowerbeds.  She vacuums monthly now instead of weekly and she only vacuums the center of the floors.  Bending to pick up items or move furniture is not something she can easily do.

 

  Mildreds daughter and son are also noticing changes.  She seems to be losing weight.  Her daughter, Sonia, realizes that her mother is no longer cooking very often.  Instead of fixing a nutritious meal Mildred often eats whatever she finds at hand.  Mildred doesnt wash clothes as often as she used to so she wears clothing that is often stained from previous days wear.

 

  Despite these obvious problems, Mildred does not need to live in a nursing home or even in an assisted living apartment.  She prefers her home and she can take care of herself enough to remain there.  Sonia and her brother, Steve, decide that simply hiring a part-time housekeeper and cook may be the best solution at this time.

 

  After checking with her Medicare supplemental insurance provider, Sonia learns that there is no coverage provided for this type of care.  Mildred receives Social Security benefits through her late husband and she also has a small pension that carried over.  In addition, Mildred has a money market account, a certificate of deposit, and an annuity that has never been annuitized.  Therefore, even though her monthly income is small, her overall financial picture seems adequate to Sonia and Steve to pay for household help.

 

  This added help works well for more than a year.  Then Mildreds children become aware that she is forgetting to take her medications.  Sonia learns to her dismay that Mildred also failed to pay her premium on her Medicare supplemental policy.  Sonia and Steve realize that they must begin to play a more active role in their mothers life.

 

  Both Sonia and Steve have full time jobs.  They all live in the same town, but it is not close to their mothers house so the drive there and back on a daily basis is not easy for them.  Mildred must take medication in the morning and again at night.  At first, Sonia buys a medication container and once a week sorts out her mothers medication.  Then she calls in the morning each day and again at night to remind her mother to take her medication.  Steve takes over Mildreds bills making sure they are paid on time.  This seems to work for a period of time.

 

  Over the next few months, however, the situation becomes worse.  Mildred is unsteady on her feet and must hang on to the furniture as she walks.  Sonia begins to investigate other avenues of care for her mother.  At first, Sonia and Steve assumed they would simply hire a nurse to come in daily.  When they inquire with Mildreds insurance agent they are told that such care is not covered by Mildreds policy nor Medicare.  This was a shock to both of them because they had simply assumed that when such care was needed, it would be covered by Medicare and their mothers Medicare supplemental policy.

 

  Sonia located a woman from the neighborhood who was willing to care for Mildred during the week.  Sonia and Steve would take turns staying with her at night and on the weekends.  Mildreds grandchildren were not yet old enough to be able to help.

 

  The paid caregiver and Mildreds children helped with her routine activities of daily living.  They helped her out of bed in the morning (transferring), and made sure she took her medications.  Mildred was able to do many things for herself, including bathing and going to the bathroom.  The primary function of the caregiver was to insure Mildreds safety.  Mildred would turn on the stove and forget about doing so, leaving it on.  She was unsteady, and prone to falling.

 

  Sonia sought the guidance of Mildreds doctor.  He outlined the type of care she needed. Although Sonia was not medically trained, her mothers care could be administered by anyone; a medically trained caregiver was not required.

 

  The type of care being provided for Mildred is called personal care.  Personal care is assistance with the activities of daily living provided by either skilled or unskilled persons under a plan of care developed by a physician or a multidisciplinary team under medical directions.

 

  There is a difference between home care and home health care.  As the names imply, care given at home may be either medical in nature or not.  Whether or not medical care is involved is the difference between the two types of care.  Home care is personal care given by unskilled personnel.  Home health care is part-time or intermittent skilled nursing services by licensed nursing personnel provided by a home health agency in a residence.  Generally, once the care required has progressed to skilled nursing services, the family is no longer able to supply the care.  10232.9 (a)(c)

 

  Sonia also found adult day care services.  Day care may be either medical or non-medical.  Adult day care services provide care outside of the home in a group setting for adults who cannot be left alone.  This service is as much for the caregiver as it is for the beneficiary.  A midday meal is provided and there are structured activities.  There may also be medical services such as therapy provided.

 

  Adult day care centers are ran by numerous organizations, such as private for-profit organizations, churches, hospitals, and government agencies.  In California, adult day care has three distinct designs: adult day health care, adult day social care, and Alzheimers day care.  Adult day care often prevents institutionalization or at least delays it.  Adult day care, even though it may be used on a part-time basis, is considered to be a form of long-term care.

 

  As Mildreds health continued to deteriorate, medical care was eventually required.  By this time, Sonia was tired herself.  She was working during the day at her job and caring for her mother through the night.  The cost of daytime supervision was more than she or Steve had anticipated, so Mildreds savings were being affected as well.

 

  When Mildreds doctor told Sonia that her mother needed a higher level of care than she was able to provide, she felt relieved.  Sonia loved her mother, but she knew she could not continue caring for her.  Now, Sonia thought, her Medicare policy would begin to cover the cost.  If the care meets Medicare guidelines, Medicare will pay for the cost of home health care services.  For the care to meet Medicares guidelines, it must involve part-time or intermittent skilled nursing care and home health aid services, physical therapy, occupational therapy, speech-language therapy, medical social services, durable medical equipment, medical supplies and other services.

 

  What Sonia immediately realized is that the care provided by Medicare would not be adequate.  Mildred needed full time care; Medicare provides only part-time care.  Sonia wasnt even sure her mother met the Medicare requirements so even part-time care might not be available.

 

  Sonia and Steve looked for an assisted living facility for their mother.  While costs vary greatly depending upon multiple factors, most cost in excess of $3,000 per month.  Sonia found a studio apartment for her mother in an assisted living facility nearby.  The location allowed Sonia and Steve to visit easily.  Although the facility was not fancy, it did provide the type of care they were looking for.  There seemed to be adequate personnel and a friendly atmosphere.  The cost was $3,600 per month.  This did not cover everything: medications were additional, meals delivered to the room were additional (Mildred was expected to come to the common dining room to eat), and laundry services were extra. 

 

  In order to be accepted by the assisted living facility, Mildred had to have some independence.  She must be able to bathe herself, take care of her bathroom functions, dress herself, and be ambulatory.  Using a walker or scooter was acceptable.  The primary role of the facility was 24-hour supervision.  Of course, they helped in other ways.  A nurse brought Mildreds medication to her and made sure it was taken as prescribed by her doctor.  Meals were prepared based on her particular dietary needs.  If she needed some types of personal care, that was also provided.

 

  Assisted living facilities are one of the most promising types of care developed in recent years because it allows some independence while still providing supervision and limited care.  In California, such care is often called RCFE (residential care facility for the elderly).  RCFEs are licensed by the Department of Social Services.  Funding may be available from Medi-Cal and long-term care insurance policies.  Assisted living facilities offer the privacy and dignity of individual living space while still providing personal care and supervision.

 

  Sonia and Steve saw their mothers financial resources begin to dwindle.  Her income was not adequate to fully pay for the assisted living facility.  Initially, they were also trying to continue maintaining Mildreds house.  It became evident that it would be best to sell it.

 

  Eventually the assisted living facility could no longer provide the level of care that Mildred needed.  At that point, it was necessary to move her to a nursing home.  Under specific circumstances Medicare will pay for some nursing home costs.  The 2004 Medicare handbook states: Most long-term care, in a nursing home or at home, is custodial care (help with activities of daily living like bathing, dressing, using the bathroom, and eating).  Medicare doesnt cover this kind of care if this is the only kind of care you need.  Medicare Part A only covers skilled care given in a certified skilled nursing facility or in your home.  You must meet certain conditions for Medicare to pay for skilled care when you get out of the hospital.

 

  Mildred did not meet Medicares requirements so her care would not be covered.  Some assisted living facilities are partnered with nursing homes.  These facilities are often called Life Care Facilities because the individual receives both assisted living care and, when necessary, nursing home care.  The assisted living facility that she was in did not have a partnership with a nursing facility.  Sonia and Steve researched available bed space at facilities near their homes.

 

  The facility they decided on was fairly new, spacious, and well equipped.  Even so, it was still a nursing home with all the old fears and prejudices that people have against them.  Sonia and Steve felt very anxious and guilty for moving their mother into a nursing home.  Both wondered if they had done enough for her.

 

  In fact, the nursing home is now the most used medical form of long-term care services.  This is true even though there have been great leaps in alternatives to such care (such as assisted living facilities).  This may be primarily due to the longer lives we are living.  We often go to the nursing home not due to illness, but because of simple frailty.  Although statistics may have some variations depending upon how the stats were collected and organized, it is generally accepted that approximately 30 percent of those over the age of 65 will need a nursing home at some point in their lives.[1]  Actual need of nursing home care may be as little as 90 days following a knee replacement, or for life if health has deteriorated as was the case with Mildred.

 

  Sonia and Steve were surprised at the cost of adequate nursing home care.  While costs do vary by region and other factors, they found that care for under $4,000 per month was impossible. The California website (www.dhs.cahwnet.gov) states that nursing home care in California averaged about $150 per day or nearly $55,000 per year in 2003.[2]  The more medical care required the higher the cost.  There are three levels of care in a nursing home: custodial, intermediate, and skilled.  Skilled is the level of care covered by Medicare if all qualifications are met by the patient.  Skilled care is also the highest level of medical care provided in the nursing home.  Custodial care may also be called personal care.  Mildreds care was custodial or personal care.

 

  Sonia and Steve quickly realized that long-term nursing home care is very expensive.  Mildreds home had sold and the proceeds were being used to pay for her care.  Since Mildreds general health was sound, it was likely that she would live in a nursing home for several years.  Her problems were an inability to walk and dementia.  Both would keep her institutionalized, but neither was likely to cause her death prematurely.

 

  By the time Mildred eventually died eighteen months later from a heart attack, a large amount of her assets had been spent on her care.  However, Sonia and Steve were luckier than many because their mother did have assets sufficient enough to pay for good care.  They were never forced to seek help through Medicaid.  Medicaid is a joint Federal and state program that helps with medical costs for some people with low incomes and limited resources.  Medicaid programs vary from state to state, but most health care costs are covered if you qualify for both Medicare and Medicaid.[3]

 

  As seen by Mildreds progression, long-term care involves more than one type of facility or organization.  There are insurance policies that will pay for some types of care, but due to underwriting, they must be purchased prior to actually needing them.  When insurance is desired, the policy must meet the requirements set down by the state of California.  10231.2 states Long-term care insurance includes any insurance policy, certificate, or rider advertised, marketed, offered, solicited, or designed to provide coverage for diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services that are provided in a setting other than an acute care unit of a hospital.  Long-term care insurance includes all products containing any of the following benefit types: coverage for institutional care including care in a nursing home, convalescent facility, extended care facility, custodial care facility, skilled nursing facility, or personal care home; home care coverage including home health care, personal care, homemaker services, hospice, or respite care; or community-based coverage including adult day care, hospice, or respite care.  Long-term care insurance includes disability based long-term care policies but does not include insurance designed primarily to provide Medicare supplement or major medical expense coverage.

 

Understanding the Need for Long-Term Care

 

  As Sonia and Steve discovered, reaching the final destination of a nursing home is not necessarily an immediate thing.  In the past, most nursing home policies covered only the nursing home.  This is not surprising since there was a time when only the very ill or long time sick ended up in a nursing home.  If possible, the elderly avoided the nursing home by receiving care from family and friends.

 

  As times changed, the requirements of policies changed also.  Consumers sought out better products that would provide for coverage at home and in other settings besides the nursing home.  As competition for sales grew, so did the options offered.

 

  Today, long-term care is a huge industry for insurance companies and for the organizations offering care.  With the increased interest in this type of policy came a need for state supervision.  California developed policy requirements, as did most states.  The federal government became involved as well with their own set of rules for tax-qualified policies.

 

Activities of Daily Living for Eligibility Criteria

 

  Virtually every policy uses some form of activities of daily living in their eligibility criteria.  California section 10232.8(a) requires specific activities be included in this list.  They are:

        Eating

        Bathing

        Dressing

        Ambulating

        Transferring

        Toileting, and

        Continence.

 

  Please note that there are seven activities listed above in Californias code.  Federal requirements list only six activities of daily living.  It is harder to qualify using six elements than it is seven.  Mathematically, 2 out of 7 are better odds for qualification than are 2 out of 6.  Therefore, Californias code makes policy qualification easier than federal tax-qualified policies do.  Federal standards eliminate the activity of ambulation. 

 

  For Mildred, eliminating ambulation ignored a serious medical problem.  Since ambulating was her one physical limitation, even though it severely limited her ability to take care of herself, she would lose that as qualifying criteria for receiving benefits.  It is likely that she would eventually have trouble transferring, but two limitations are required under the federal criteria.  Currently, she could still eat without assistance (as long as the food was prepared), she could bath herself, dress herself, get from the bed to the chair and back, and she was able to perform the necessary functions of toileting and continence.  The California insurance code lists impairment of cognitive ability as a stand-alone criteria for receiving benefits.  Therefore, the dementia would likely qualify her for benefits.

 

  As is true of any legal contract, terms bear a great importance in long-term care policies.  Impairment in activities of daily living is an important definition because it states the quantity of impairments necessary to claim benefits under the issued policy.  Subsection 10232.8 (d) of the California code states impairment in activities of daily living means the insured needs substantial assistance either in the form of hands-on assistance or standby assistance, due to a loss of functional capacity to perform the activity.  Impairment of cognitive ability means the insured needs substantial supervision due to severe cognitive impairment.

 

Finding the Caregivers

 

  As Sonia and Steve discovered, finding the right type of care is very important.  In Mildreds case, they were able to delay institutionalization by providing other types of care in her home and eventually in assisted living prior to the nursing home.  The telephone book may be a starting point, but without adequate information it is unlikely that the results will be satisfactory.  Finding adequate care usually takes time and thought.

 

Policies Providing Home Care or Community Based Care

  In California every long-term care policy or certificate that advertises benefits for home care or community-based care must provide at least the following:

1.    home health care,

2.    adult day care,

3.    personal care,

4.    homemaker services,

5.    hospice services, and

6.    respite care.  10232.9 (a)

 

  California defines home health care as skilled nursing or other professional services in the residence, including but not limited to, part-time and intermittent skilled nursing services, home health aid services, physical therapy, occupational therapy, or speech therapy and audiology services, and medical social services by a social worker.  Adult day care may be either medical or non-medical.  10232.9 (a)(1)

 

  As Americans continue to live longer, the need for long term care services of various types will continue to grow.  The longer one lives the greater the chance that long-term care services will be needed due to simple frailty.[4]   The age mix is shifting upward.  Due to lower birth rates and longer life spans, we are becoming a nation with a larger elderly population while younger ages are decreasing.  In California, those who are age 65 or more is expected to nearly double from 3.25 million in 1990 to over 6 million by the year 2020.[5]

 

  So, does this mean that every person will end up in a nursing home?  Certainly not but many will.  There is no way to positively know which of us should plan for the possibility of needing long-term care by purchasing a policy.  We can look at some factors for guidance though.  Our familys medical history will lend some clues.  Our financial situation will also offer guidance.  Can we afford to pay for long-term care needs out-of-pocket as Mildred did?  Do we want to pay for long-term care needs ourselves or would we rather transfer the risk the same way we do with our homes fire insurance?  Although no one wants their home to catch fire, we purchase insurance to insure the loss in case it does. The same is true with long-term care insurance.  No one wants to go to a nursing home, but insurance is purchased to cover the cost in case some type of long-term care becomes necessary.

 

  AARP, the American Association of Retired People, reported that 40% of nursing home admissions are due to a fall that resulted in an injury.[6]  For many others, a particular event puts them over the edge, so to speak.  Their health has been deteriorating already and the event merely pushes them into requiring institutionalization immediately.  The reason that institutionalizes them will also determine their length of stay.  For some, it will be a healing time (for a broken hip, for example) while others will remain in the nursing home for the duration of their life (due to a stroke, for instance).  The length of stay is determined by their ability to resume caring for themselves.  If the physical condition will not be eliminated, it is then considered to be long-term.

 

  The California Partnership Comprehensive brochure lists four items that can help in determining an individuals chance of needing care in a nursing facility: longevity, gender, marital status, and health factors.[7]

 

 

Longevity:

  The longer you live the more likely that frailty (due to age) will become a factor in needing nursing home care.  Those who live to be 95 are more likely to have spent at least five years in a nursing home than those who die in their mid-seventies.  Four times more people receive care at home than in a nursing home, although there are fewer facts known about home care since families often handle the cost themselves.[8]

 

Gender:

  The New England Journal of Medicine reported in 1991, following a study, that one out of every two women over the age of 65 will spend time in a nursing facility.  Women are more likely to need formal long-term care due to longer life spans (than men).  They also tend to outlive their spouses so there is no one left at home to care for them.  Women are also more prone to chronic diseases such as arthritis and osteoporosis.

 

Marital Status:

  Those who have a living spouse are less likely to go to a nursing home.

 

Health factors:

  Obviously health factors play a major role in whether or not a person will need to go to a nursing home.  If an individual is aware that some conditions run in their family, such as debilitating arthritis, Alzheimers or heart conditions, the eventual need for long-term care must be considered.

 

  We have had wonderful progress in the medical field.  What was once considered to be long-term illness is no longer looked at in that light.  Tuberculosis was once considered a long-term illness.  That is no longer true today.  As we progress medically, conditions that now institutionalize our citizens may cease to do so.

 

Types of Care as Defined by California

 

  The types of care required will directly link to the existing condition.  In California, long-term care insurance includes all products, which provide coverage for any of the following benefits:

        Institutional care, which is care provided in a convalescent care facility, skilled nursing facility, or personal care facility.

        Home care, including home health care, personal care, homemaker services, hospice care, and respite care.

        Community-based care, which includes adult day care, hospice or respite care.

 

  Finding the best caregivers often depends upon the level of care required.  Like Mildred, most people progress over a period of time towards the nursing home.  While some will go directly from independent living to a nursing home, many more will follow the path Mildred experienced.

 

Family First

 

  Like Mildred, family is usually the first caregiver.  Often this means a wife caring for her ailing husband.  Since men tend to die sooner than women and also tend to marry women younger than them, it is common for men to be cared for at home.  Next to the spouse, children are the common caregivers.  While friends may sometimes play a part, seldom do friends provide actual care.[9]  Under some conditions a spouse may receive pay for providing these services, but most do so without pay.  Initially, the care given may be no more than help with medications, dressing, and other daily functions.  Individuals who are able to primarily care for themselves, with help from their spouse and children, can often continue living at home.  Since remaining at home is a primary goal, such help is critical.

 

Paid Home Care

 

  As the care becomes more demanding, outside help may be the only answer.  Elderweb states that statistics are difficult because so many families pay for such care out-of-pocket using local people that are not licensed with any agency.  Such care includes personal care, housekeeping services, meal preparation, and shopping.

 

  Personal care is defined as assistance with the activities of daily living that may be provided with skilled or unskilled personnel.  Such care is provided under a plan designed by a physician or a multidisciplinary team under medical direction.  As of 1993, California has required long-term care insurance policies to provide benefits for care rendered by unlicensed providers if the state has no licensing requirements for that particular service and the insurance policy would cover that type of service if it had been provided by a licensed agency.  This requirement allows individuals to hire less expensive home care help.  Once the policy is issued in California, care may be received anywhere with the same requirements applying.

 

Home Care And Home Health Care

  There are two types of care at home: medical and non-medical.  Care that is medical is called home health care.  It is common for care to begin as home care and eventually end up being home health care as medical conditions worsen.  Home care may be provided by a person with no medical training.  It is personal care not requiring any medical treatments.  Home health care is part-time or intermittent skilled nursing services by licensed nursing personnel.  It is provided at the patients home.  The type of medical care received will depend upon the persons needs.  10232.9 (a)(c)

 

  Home health care may be covered by Medicare if the patient qualifies under their guidelines.  According to the Medicare Program handbook, home health care is part-time or intermittent skilled nursing care and home health aide services, physical therapy, occupational therapy, speech-language therapy, medical social services, durable medical equipment, medical supplies, and other services.[10]  If you qualify (and only IF you qualify) Medicare will pay for all qualified home health care services.  You will pay 20% of the Medicare-approved amount for durable medical equipment, if any are required.  If you do qualify and Medicare does pay for the service, you will receive a Medicare Summary Notice (MSN) for the service.  This is not a bill.  It lists all the services or supplies that were billed to Medicare for a 30-day period.  It should be checked for accuracy.

 

  In some areas Medicare is testing a new service: Electronic Medicare Summary Notices (e-MSN).  For many, it is a simple and convenient way to get a copy of the MSN through the web.  The beneficiary may then simply print it off.  The e-MSN is not currently replacing the paper copy that is mailed to the beneficiary.

 

  Medicare is testing the web availability of MSNs in some areas to evaluate the benefit of the service before it is made available to all people on Medicare.  To see if it is available in your area go to www.medicare.gov on the web. 

 

  How does Medicare decide if the service qualifies for coverage?  At times, Medicare makes a national coverage decision about whether a particular type of service or medical equipment is covered.  A national decision relates then to all those covered by Medicare.  In such a case it is called a National Coverage Determination.

 

  The Medical Director at a Fiscal Intermediary or Medicare Carrier sets rules for the way Medicare claims in each local area are reviewed.  These rules are also followed to decide whether or not an individual claim will be paid.  These local rules must be consistent, scientific, and meet the guidelines established by Medicare.  Local guidelines may NOT disagree with any existing national coverage determinations.  This does not mean that there may not be variances from area to area because there can be.  The rules that allow for variations are called Local Medical Review Policies (LMRP).  To review these, go online to www.medicare.gov and select Your Medicare Coverage.  Any individual who disagrees with a determination of eligibility for a service may appeal the decision.

 

Respite Care

 

  Many professionals feel that respite care is as much for the caregiver as it is for the patient.  Actually both are true.  A caregiver that wears out may not be able to continue providing care.  By giving the caregiver a break in their routine the caregiver is refreshed and the patient avoids losing their services.

 

  Respite care may be given in the patients home or at a community location.  Medicare will pay only for inpatient respite care given to a hospice patient so that the usual caregiver can rest.[11]   When Medicare covers respite care it is often provided in a nursing home.  The patient returns home when the caregiver is again available.

 

Assisted Living

Residential Care Facilities for the Elderly

 

  Assisted living arrangements have been well received in America.  Residential Care Facilities for the Elderly (RCFE) are licensed by the Department of Social Services in California.  Medi-Cal may provide funding in some cases as will LTC insurance policies.

 

  The resident typically has their own private apartment, minus the kitchen.  Some do provide partial kitchens (sink, counter, and refrigerator).  A few include full cooking facilities in the apartment but most prefer their residents not cook due to the obvious hazards this would represent.  Each resident brings their own furniture to the apartment and decorates as they desire.  While there may be variances in the type of care provided, most are set up to supervise and assist their residents.  As Sonia and Steve found, most facilities require some amount of independence since these are not full-service nursing homes.  Personal care is the primary function along with supervision.  The personal care provided will include such things as meals, housekeeping, medication supervision, and help in dressing and bathing.  It is important to choose the right facility because the types of care can vary.  In all cases, however, the goal of assisted living is assistance not complete care.

 

  Because California does not have specific licensing categories for assisted living, insurance benefits would probably be available only for those licensed as Residential Care Facilities for the Elderly.  Because of the uncertainty of benefit payments, the requirement to pay for care in an RCFE was substituted for assisted living benefits.

 

  Assisted living or RCFEs usually require that the resident have some measure of independence.  Like the one Mildred lived in, they usually require some ability to get around.  They usually require that the resident be able to join the group for meals in a common dining room.  The ability to handle bathroom functions independently is also a common requirement.  Most residents in an RCFE are not able to do all activities of daily living, but they are not ill or frail enough to need a nursing home either.

 

  Under the legislation added by SB 1052, all insurers must offer coverage for assisted living.  This must be done at the time of application for insurance coverage.  It further states that the benefit must pay a minimum benefit of at least 70% of the maximum benefit for institutional care.  All expenses incurred by the insured while confined in a residential care facility for long-term care services that are necessary diagnostic, preventative, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance or personal care services needed to assist the insured with the disabling conditions that cause the insured to be a chronically ill person, as authorized by Public Law 104-191 and related regulations must be covered.  There can be no restriction on who may provide the service or the requirement that services be provided by the residential care facility as long as the expenses are incurred while the insured is confined in the residential care facility.  10232.92 (b)

 

  California is among those who have been leaders in developing the best assisted living facilities in the country.  Also listed as the states leading in assisted living are Arizona, Colorado, Florida, Kansas, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Texas, and Washington.[12]

 

Life Care Facilities

 

  Many companies are now combining types of care in the facilities they own and operate.  These facilities combine housing, assisted living, and nursing home care.  Many churches have sponsored such arrangements, but other organizations are also involved.  How they operate vary, but often the residents buy into them.  When they die, their financial interest reverts back to the sponsoring organization.  If they live a long time they have more than made back their investment; if they do not live a long time the organization has done well financially.

 

Independent Living Services

 

  It is no secret that most people desire to remain in their own homes.  As age deteriorates an individuals physical and mental skills, remaining at home becomes a greater and greater challenge.  Many community services have been developed to assist the elderly in remaining home.  Each community may have different services available.  Usually there are some that offer meals brought to the residents home, housekeeping services, transportation to appointments, and help in shopping or fixing meals.  There are even organizations that offer daily or weekly telephone calls to prevent isolation.

 

  Maintaining medication schedules is a common problem with the elderly.  This is often handled by family and friends, but if no one is available, community organizations may be able to offer assistance. 

 

Adult Day Care/Adult Medical Day Care

 

  As with so many types of care, adult day supervision may be either medical or non-medical.  Like other types of care, when the word medical is included it means that some type of medical care is also included.  When medical care is included it is provided by a person with medical training.

 

  When families are attempting to keep an elderly member home adult day care facilities can be a lifesaver.  These facilities are offered through churches, community organizations, and for-profit companies.  Many offer transportation to and from the facility.  In California, adult day care has three distinct designs:

        Adult day health care,

        Adult day social care, and

        Alzheimers day care.

 

  Most adult day care groups offer the beneficiary structured supervision during the day allowing the family members to go to work or run errands.  Adult day care may simply be a day off for the caregiver.  Whatever the need, adult day care can mean the difference between staying at home and institutionalization for the patient.  Adult day care is considered to be long-term care because it is a form of care for an extended period of time.

 

Congregate Care

 

  Congregate care is provided in congregate housing.  It may be a building equipped to handle only a few people or several hundred.  Generally each resident has their own bedroom and bathroom but they share the rest of the building.  Some are set up so that two bedrooms share one bathroom.  Congregate housing does not offer residents personal living space beyond their bedroom and bathroom.  Living areas, dining rooms, kitchens, and laundry facilities are shared.  There may be additional advantages that are shared, such as exercise rooms, game rooms, or sewing areas. 

 

  Statistics tell us that those who choose to utilize congregate housing are older than 75, not sick enough to be in a nursing home, but with enough limitations that supervision and some degree of help is required.[13]  Much of the congregate housing is funded by the federal government through its Congregate Housing Services Program.  Those with low incomes may have their rent federally subsidized.  These programs often have very long waiting lists unfortunately.

 

 

Nursing Home Facilities

 

  Although there are various forms of long-term care, the best known involves the nursing home.  While statistics vary, depending upon the source used, it is generally accepted that about 30 percent of those over the age of 65 will need a nursing home at some point in their lives.[14]  Not all nursing home stays are for lengthy periods of time; some need only a few months to recover from a specific health problem.

 

  Nearly half of all nursing home residents are over the age of 85 according to Elderweb, an organization that monitors the elderly.  Many of these are not actually ill but rather frail.  Of course, they do have physical conditions related to age, but no particular condition that has made their stay necessary.  Instead it is an accumulation of problems.

 

  In the past few years we have seen more specialization in nursing homes.  Some accept only mentally impaired individuals, for example.  A nursing home is never the same as staying at home, no matter how hard the facility tries.  Even so, a nursing home is often the only sensible place for an elderly, frail person to be. 

 

Diverting the Cost of Care With an Insurance Policy

 

  Medical care is never cheap.  Nursing home care is especially expensive.  While an insurance policy is not the only solution, it has become a primary one.  Americans want health care during their working years to cover catastrophic costs.  Long-term nursing home care is merely an extension of that.

 

  The cost of a policy will depend upon multiple factors: benefits chosen, application age, and general health at the time of application.  Although facility costs do change with the passing of time the policy should cover no less than 80 percent of the anticipated costs.

 

Types of Policies

  Policies and certificates that limit benefits to institutional care will be called a nursing facility and residential care facility only policy.  This will be stated prominently on page one of the form and the outline of coverage.  10232.1(b)

 

  Some policies are designed to pay only for home care services.  These policies are called home care only contracts and must prominently state that on page one of the form and on the outline of coverage.  These policies will also cover community-based services.  10232.1(c)

 

  Only policies and certificates that provide benefits for both institutional care and home care may be called comprehensive long-term care policies.  10232.1(d)

 

LTC Riders on Life Insurance Policies

  Some life insurance policies have offered long-term care riders.  To do so in California, anything that is marketed, advertised, or sold as long-term care must meet the requirements of California.  This includes long-term care riders.

 

Premium Collection at Application

  When an application is taken by an agent or through the mail, only one months premium may be collected.  If interim coverage is provided, the insurer may not require more than two months premium for that purpose.  No further premiums may be collected until the policy is delivered to the applicant for acceptance.  10232.65 (a)

 

Notification of Application Acceptance or Denial

  The insurer must notify the applicant of acceptance or denial within 60 days from the date the insurer or producer accepted the application.  If notice is not received within 60 days, interest must be paid on the funds collected at application.  Interest would continue until the applicant is either refunded their premium (denied a policy) or issued a policy.  10232.65 (b)

 

  Once the policy is issued and delivered, the applicant has the right to review it.  If they are not satisfied with their purchase, they may return it via first-class mail for a full refund within 30 days of its delivery.  Returning (refusing acceptance) the policy will void it and void all benefits associated with the policy.  The insurer must refund all premiums and fees paid at application within 30 days of the policy return.  The refund policy must be stated prominently on the first page of the policy or certificate.  10232.7

 

Chronically Ill or Acutely Ill?  It Makes a Difference.

 

  Insurance policies are legal contracts.  Therefore, terms are very important when it comes to receiving benefits.  In long-term care policies, terms are critical to receiving benefits.  An acute medical condition often requires hospitalization, but not long-term care.  The chronically ill, on the other hand, are likely to need long-term care.  Funk and Wagnalls standard dictionary defines acute as coming to a crisis quickly, as opposed to chronic.

 

  Acute sickness is likely to fall under the terms of a major medical policy or, if over the age of 65, a Medicare supplemental policy.  Sometimes an acute condition progresses to a chronic condition.  During the acute phrase, however, care is typically much different than it would be for a chronic illness. 

 

  What would an acute illness be?  The sudden onset of appendicitis would qualify as an acute illness.  The condition is not expected to last long-term, but it does come to a crisis quickly.  An important difference between chronic and acute is the fact that chronic continues to affect the individuals life, whereas an acute condition is typically handled (by surgery for the appendicitis patient) over a relatively short period of time.  If the acute condition becomes a chronic condition then the situation could not be corrected.  Therefore, it became chronic.

 

  When we are young and healthy, most medical problems will be either maintenance care, such as yearly physicals, or an acute condition, such as the appendicitis example.  We do not expect to have a chronic illness.  As we age, what would have once been an acute illness can become a chronic one.  A chronic condition is ongoing and often long term in nature.  Chronic conditions are more likely to come under the terms of a long-term care nursing policy.

 

  The Health Insurance Portability & Accountability Act of 1996 (HIPAA) describes a chronically ill person as one who has been certified by a licensed care practitioner as being unable to perform without substantial assistance at least two activities of daily living.  That would mean the inability to perform two of the following six activities:

        Eating

        Toileting

        Transferring

        Bathing

        Dressing

        Continence.

 

  Please note the absence of ambulating in the above list.

 

  Chronically ill could also mean a cognitive impairment which caused potential danger to that person or to others.

 

  Californias code 10232.8 (c) states: A licensed health care practitioner, independent of the insurer, shall certify that the insured meets the definition of chronically ill individual as defined under Public Law 104-191.  If a health care practitioner makes a determination, pursuant to this section, that an insured does not meet the definition of chronically ill individual, the insurer shall notify the insured that the insured shall be entitled to a second assessment by a licensed health care practitioner, upon request, who shall personally examine the insured.  The requirement for a second assessment shall not apply if the initial assessment was performed by a practitioner who otherwise meets the requirements of this section and who personally examined the insured.  The assessments conducted pursuant to this section shall be performed promptly with the certification completed as quickly as possible to ensure that an insureds benefits are not delayed.  The written certification shall be renewed every 12 months.

 

  A licensed health care practitioner means a physician, registered nurse, licensed social worker, or other individual whom the United States Secretary of the Treasury may prescribe by regulation.

 

  California requires the licensed health care practitioner to develop a written plan of care after personally examining the insured.  The costs to have the insured examined for the purpose of determining whether or not they meet the definition of chronically ill may not count against the lifetime maximum of the policy or certificate.  Because the health care practitioner must be independent of the insurer (insurance company), he or she cannot be an employee of the company, nor can he or she be compensated in any manner that is linked to the outcome of the certification.  The practitioners assessment of the insured must be unhindered by any financial consideration.

 

  Subsection (c) of Californias code applies only to policies and certificates intended to be federally qualified long-term care insurance contracts.

 

Are You Chronically Ill as Defined Under Public Law 104-191?

  A licensed health care practitioner, independent of the insurer, must certify that the insured meets the definition of chronically ill individual as defined under Public Law 104-191.  If the health care practitioner denies benefits to an insured, that person may request a second opinion.  The requirement for a second assessment may not apply if the initial assessment was performed by a practitioner who otherwise meets the requirements and who personally examined the insured.  The assessments conducted must be performed promptly with the certification completed as quickly as possible to ensure that an insureds benefits are not delayed.  Written certification must be renewed each year (every 12 months). 

 

What Home Care Benefits Must Include in an LTC Policy

  Every long-term care policy or certificate that provides benefits for home care or community-based services must also provide at least the following six services:

        Home health care

        Adult day care

        Personal care

        Homemaker services

        Hospice services

        Respite care

 

  Home care is termed to mean skilled nursing or other professional services in the residence, including but not limited to, part-time and intermittent skilled nursing services, home health aid services, physical therapy, occupational therapy, or speech therapy and audiology services, and medical social services by a social worker.

 

  Adult day care may be either medical or non-medical care on a less than 24-hour basis, provided in a licensed facility outside the residence, for individuals in need of personal services, supervision, protection, or assistance in sustaining daily needs.

 

  Personal Care is assistance with the activities of daily living provided by a skilled or unskilled person under a plan of care developed by a physician or a multidisciplinary team under medical direction.  This would also include help with what is termed the instrumental activities of daily living.  Instrumental activities include using the telephone, managing medications, moving about outside, shopping for essentials, preparing meals, doing laundry, and performing light housekeeping chores.

 

  Homemaker services is assistance with activities necessary to or consistent with the insureds ability to remain in their residence, that is provided by a skilled or unskilled person under a plan of care developed by a physician or a multidisciplinary team under medical direction.

 

  Hospice services are provided for those who are terminally ill.  Hospice services are performed on an outpatient basis for care not covered by Medicare.  They are designed to provide palliative care, alleviate the physical, emotional, social, and spiritual discomforts of an individual who is experiencing the last phases of life due to the existence of a terminal disease.  Such care provides support for the primary caregiver and the family.  Such care may be provided by a skilled or unskilled person under a plan of care developed by a physician or a multidisciplinary team under medical direction.

 

  Respite care is short-term care provided in an institution, home, or community-based program that is designed to relieve a primary caregiver in the home.  This is a separate benefit with its own conditions for eligibility and maximum benefit levels. 

10232.9 (a)(b)

 

  Home care benefits contained in a policy may not be limited or excluded by any of the following:

1.    Requiring a need for care in a nursing home if home care services are not provided.

 

2.    Requiring that skilled nursing or therapeutic services be used before or with unskilled services.

 

3.    Requiring the existence of an acute condition.

 

4.    Limiting benefits to services provided by Medicare-certified providers or agencies.

 

5.    Limiting benefits to those provided by licensed or skilled personnel when other providers could provide the service, except where prior certification or licensure is required by state law.

 

6.    Defining an eligible provider in a manner that is more restrictive than that used to license that provider by the state where the service is provided.

 

7.    Requiring medical necessity or similar standard as a criteria for benefits. 10232.9(c)

 

  Home care must be covered under a comprehensive long-term care policy at a level that is at least 50 percent of the maximum benefit payable in an institution.  Home care must always pay at least $50 per day, which means that institutional care must always be no less than $100 per day.  Insurance products approved for residents in continuing care retirement communities are exempt from this provision.  10232.9(d)

 

Durational Maximums in Comprehensive LTC Contracts

  Every comprehensive long-term care policy or certificate that sets a durational maximum for institutional care, limiting the length of time that benefits may be received during the life of the policy or certificate, must allow a similar durational maximum for home care that is at least one-half of the length of time allowed for institutional care. 10232.9(d)

 

Benefits in LTC Policies

That Include Nursing Home Confinements

  Every long-term care policy or certificate covering confinement in a nursing facility must include a provision with the following features (10232.92):

 

1.    Care in a residential care facility must be covered.  A residential care facility means a facility licensed as a residential care facility for the elderly (RCFE) or a residential care facility as defined in the Health and Safety Code.  Outside California, eligible providers are facilities that meet applicable licensure standards, if there are any, and are engaged primarily in providing ongoing care and related services sufficient to support needs resulting from impairment in activities of daily living or impairment in cognitive ability, which provide care and services on a 24-hour basis, have a trained and ready-to-respond employee on duty in the facility at all times.  Three meals per day are also provided, accommodating special dietary needs.  The facility has an agreement to ensure that residents receive the medical care services of a doctor or nurse in case of emergency, and have appropriate methods and procedures to provide necessary assistance to residents in the management of prescribed medications.

 

2.    The benefit amount payable for care in a residential care facility must be no less than 70 percent of the benefit amount payable for institutional confinement.

 

3.    All expenses incurred by the insured while confined in a residential care facility for long-term care services that are necessary diagnostic, preventative, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance or personal care services, needed to assist the insured with the disabling conditions that cause the insured to be a chronically ill person under the guidelines of Public Law 104-91 must be covered and payable up to the maximum daily residential care facility benefit of the policy or certificate.  It does not have to exceed that amount.  There cannot be any restriction on who may provide the service, nor can there be a requirement that services be provided by a residential care facility, as long as the expenses are incurred while the insured person is confined in a residential care facility, the reimbursement does not exceed the maximum daily residential care facility benefit of the policy, and the services do not conflict with federal law or regulations for the purposes of qualifying for favorable tax consideration proved y Public Law 104-191.

 

4.    In policies or certificates that are not intended to be federally qualified, the threshold establishing eligibility for care in a residential care facility can be no more restrictive than that for home care benefits, and the definitions of impairment in activities of daily living and impairment of cognitive ability are the same as for home care benefits.  In policies that are intended to be federally qualified, the threshold establishing eligibility for care in a residential care facility must be no more restrictive than that for home care benefits and the definitions of impairment in activities of daily living and impairment in cognitive ability must be the same as those for home care benefits.

 

Defining the Maximum Lifetime Benefit

  Every long-term care policy or certificate must define the maximum lifetime benefit as a single dollar amount that may be used interchangeable for any home- and community-based services, assisted living benefit, or institutional care.  There can be no limit on any specific covered benefit except for a daily, weekly, or monthly limit set for home- and community-based care and for assisted living care, and for the limits defined in the policy for institutional care.  In other words, the policy cannot require that skilled care first be received for a defined period of time before the policy would cover other levels of care. 10232.93

 

  It is important to note that lifetime does not necessarily mean the lifetime of the insured.  It refers to the policy lifetime.  The policys lifetime will be stated in the contract and may be any time element, such as three, five, or ten years.  Since the maximum lifetime must be stated as a single dollar amount, the length of time can depend, to some extent, upon the services that are utilized under the terms of the contract.  For example, Keith has such a policy and has been receiving home care, which his policy sets at a maximum of $3,000 per month.  His care has required the full amount allowed ($3,000 per month).  Keith eventually goes to a local nursing facility costing $5,000 per month, which his policy fully covers because it is within the specifications of the policy terms.  Keiths policy has a maximum lifetime benefit of $100,000.  When that amount is reached, whether through home care services or the nursing facility, his policy will end.  It will have then fulfilled its lifetime maximum benefit when that last dollar totaling the $100,000 has been paid out.

 

Per Diem Expenses

  Every long-term care policy or certificate that provides reimbursement for care in a nursing facility must also cover and reimburse for per diem expenses, as well as the costs of ancillary supplies and services.  However, these reimbursements do not have to exceed the maximum lifetime daily facility benefit of the policy or certificate.  10232.95

 

  What are ancillary supplies and services?  They are a secondary item or procedure, serving as an aid or accessory to the primary service being provided.  For example, Shiela has broken her hip.  The break is the primary medical problem that is being treated. In the process of that treatment, however, will be the need for items or services not directly involving the hip, but related to the treatment of it.  These related services and supplies would be called ancillary services and supplies.

 

Material Modifications on Policies Issued Prior to 1/1/1997

  When a policy or certificate holder of an insurance contract that was issued prior to December 31^st, 1996, requests a material modification to the contract as defined by federal law regulations, the insurer, prior to approving the request, must provide a written notice to the policyholder that the contract change requested could constitute a material modification that jeopardizes the federal tax status of the contract and appropriate tax advice should be sought out.  10232.96

 

Threshold for Benefit Eligibility in Nursing Facility Policies

  In every long-term care policy or certificate that covers care in a nursing facility, the threshold establishing eligibility for nursing facility care must be no more restrictive than a provision that the insured will qualify if either one of two criteria are met:

        An Impairment in two activities of daily living, or

        An impairment in their cognitive ability.  10232.97

 

  Precedent to the payment of benefits for any care covered by the terms of the policy, any insurer offering long-term care insurance may obtain a written declaration by a doctor, independent needs assessment agency, or any other source of independent judgment suitable to the insurer that services are necessary.  In other words, the actual need for care and benefits must be established by a qualified person.  The insured may not simply request and receive benefits.  10233

 

LTC Policy Restrictions

 

  Long-term care insurance policies are prohibited from:

 

1.    Canceling, non-renewing, or otherwise terminating the policy on the grounds of age or the deterioration of the mental or physical health of the insured individual.

 

2.    Containing 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 same insurer, except with respect to an increase in benefits voluntarily selected by the insured or group policyholder.

 

3.    Providing for payment of benefits based on a standard described as usual and customary, reasonable and customary, or any other words similar to that.

 

4.    Terminating a policy, certificate, or rider, or containing a provision that allows the premium for an in-force policy to be increased due to the divorce of a policyholder.

 

5.    Including an additional benefit for a service with a known market value other than the statutorily required home- and community-based service benefit, the assisted living benefit, or a nursing facility benefit, unless the additional benefit provided for the payment of at least five times the daily benefit and the dollar value of the additional benefit is disclosed in the schedule page of the policy.  10233.2

 

  When a policy or certificate replaces a previously existing long-term care policy or certificate, the replacing insurer must waive any time periods applicable to pre-existing conditions or probationary periods to the extent that similar exclusions have been satisfied under the original policy or certificate.  In other words, if the original policy has already bypassed the time requirement for pre-existing conditions, the replacement policy is not allowed to impose another one.  It must recognize the period of time that already passed relating to pre-existing periods within the first policy.  10233.3

 

End of Chapter One