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Long-Term Care Glossary


Activities of Daily Living (ADLs): These are the six, standard physical functions necessary for independent living: eating, toileting, transferring, bathing, dressing and continence. Most LTC policies require that you not be able to perform at least two or three of these functions before you can receive coverage under the policy. ADLs also are used to determine the level of nursing care a person requires in a long-term care facility and the rate they are charged.

Benefit period: The length of time you receive benefits under the policy, which can range anywhere from 1 year to a lifetime. A single policy can have a separate benefit limit for nursing homes and home health care; for example, a policy may offer 5 years of nursing home coverage and 2 years of home health care. The benefit period always begins on the first day you receive benefits from the policy.

Benefit trigger: A term used by insurance companies to describe when to start paying benefits. Most policies tie this to your inability to perform a certain number of ADLs. If the policy says you must require help to do the activities before you can receive benefits, make sure it clearly states exactly what that means. For instance, a policy that specifies "substantial" or "hands-on" assistance will make it harder to qualify for benefits than if only "stand-by" assistance is required.

Cognitive impairment: A deficiency in a person's short or long-term memory, orientation as a person, place and time, deductive or abstract reasoning, or judgment regarding safety awareness.

Custodial care: Board, room or other personal assistance services (including assistance with ADLs) that may be provided by non-medical or non-skilled care providers.

Dementia: Progressive mental disorder that affects a person's memory, judgment and cognitive powers. Alzheimer's disease is one type of dementia.

Guaranteed renewable: A policy provision that means an insurance company cannot cancel or fail to renew a policy for any reason, unless you fail to pay premiums.

Home health care: Skilled and non-skilled services provided in an individual's home, including occupational, physical, respiratory, or speech therapy, nursing care, as well as social worker and homemaker services.

Inflation protection rider: An optional feature in a policy that automatically increases the daily benefit limit to account for inflation. This feature may be important, depending on your situation, but it does raise the price of the policy. Without inflation protection, your policy may only cover part of the cost of your long-term care by the time you need it.

Level premiums: This means that the premiums you pay will not increase as you get older or if your health status changes. However, the term does not mean the premiums will never go up. Any insurance company may raise premium rates for an entire rating class of people in the state, with approval from the Minnesota Department of Commerce.

Medical Assistance (or Medicaid ): The federally-supported, state-operated and state-administered public assistance program that pays for health care services to low-income people, including elderly and disabled persons. Medicaid pays for long-term nursing home care and some other limited health services. Recipients must meet low-income eligibility requirements to receive Medical Assistance, which is why a "spend down" of assets is necessary to qualify. Most nursing home residents without enough personal assets or long term care insurance end up on Medical Assistance. Be aware that some nursing homes do not accept people on Medical Assistance.

Medicare: The federal program providing hospital and medical insurance to people aged 65 or older and to certain ill or disabled persons under 65. Medicare provides very limited benefits for long term care.

Medigap or Medicare Supplement Insurance: Private insurance that supplements Medicare. Medigap policies do not provide benefits for long-term care but they do cover part of the hospital and doctor bills that Medicare does not cover.

Non-forfeiture benefits: An optional policy feature that allows for some coverage even if you quit paying the premium. This provision must be offered to purchasers of qualified long-term care policies, but may be available in non-qualified policies.

Non-qualified policy: Refers to policies that do not have the federal tax benefits of the qualified policies, but that still include Minnesota's minimum consumer protection standards and may offer less-restrictive benefit requirements.

Outline of coverage: A description of a policy's benefits, exclusions, and provisions that makes it easier to understand a policy and compare it with others. Insurance companies are legally obligated to provide you with this summary before you purchase a long-term care policy.

Pre-existing condition: A medical condition that was diagnosed or treated prior to the effective date of the policy. Most long-term care insurance policies limit the benefits paid for a pre-existing condition for a period of time after the policy is issued - but it cannot be for more than 6 months.

Qualified policy: A type of policy that qualifies for certain federal tax breaks. This kind of policy may be appropriate if you meet the requirements to itemize deductions on your tax forms and if your overall medical expenses (including long-term care premiums) exceed 7.5 percent of your adjusted gross income.

Respite care: Offers a few hours to several days of help to relieve family caregivers. These expenses are usually not covered under long-term care policies.

Spend down: A requirement that an individual use up most of his or her income and assets before qualifying for Medicaid.

Waiver of premium: Minnesota law requires that while you are receiving benefits because of a nursing home confinement, you do not have to pay the premium. Some policies also waive the premium when receiving home health care.