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Accelerated Death Benefit: A feature included in some life insurance policies that lets the policyholder use some of the policy's death benefit prior to death to pay for long-term care.
Activities of Daily Living (ADLs): Everyday functions and activities people usually do without help. ADL functions include eating, bathing, dressing, using the bathroom, and transferring (getting in and out of bed, etc.) and continence. Most insurance policies use the inability to do a certain number of ADLs (such as two out of six) to determine benefit eligibility.
Acute Care: Recovery is the primary goal of acute care. Acute care is usually short term and the services of doctors, nurses or other skilled professional services are typically required and usually provided in a doctor's office or hospital.
Adult Day Services: Services provided during the day at a community-based center. These programs address the individual needs of functionally or cognitively impaired adults. These are structured, comprehensive programs that provide social and support services in a protective setting during any part of a day, but do not provide 24-hour care. Many adult day service programs include health-related services.
Advanced Directive: (also called health care directive, advanced health care directive, or living will) A legal document that specifies whether someone wants to be kept on artificial life support if he/she becomes permanently unconscious or is otherwise dying and unable to speak for his/herself. It can include other specific wishes related to health care he/she wants under those circumstances.
Aging and Disability Resource Centers (ADRCs): ADRCs serve as single points of entry into the long-term supports and services system for older adults and people with disabilities. Through integration or coordination of aging and disability service systems, ADRC programs raise visibility about the full range of options that are available, provide objective information, advice, counseling and assistance, empower people to make informed decisions about their long term supports, and help people more easily access public and private long term supports and services programs. In Minnesota, the Senior LinkAge Line 800-333-2433 is the ADRC for Minnesota.
Annuity: A purchased contract in which an insurance company (annuity issuer) agrees to pay the purchaser, or the person the purchaser designates (annuity payee)a return on money deposited with the annuity issuer (either in the form of a single lump sum or several payments deposited over several months or years) according to the terms of the
Annuity Issuer: A person or an entity (insurance company) that manages an annuity. The annuity issuer accepts funds from the owner(s) during the accumulation phase and issues payments after the funds have been annuitized. Banks and financial planners often sell annuity-arrangements; however, insurance companies issue annuity based financial arrangements.
Annuity Payee: A person who receives periodic payments from an annuity. An annuity contract may provide for two or more payees. An annuity payee is sometimes called the annuitant, however, a payee may not also be an annuitant.
Assisted Living Facility: A residential living arrangement that provides personal cares, help with Activities of Daily Living, help with medications and services, such as laundry and housekeeping. Facilities may also provide health and medical care, but not as intensive as offered at a nursing home. Types and sizes of facilities vary, ranging from small homes to large apartment-style complexes. Levels of care and services also vary.
Benefit: Money paid by an insurance company to a person or a care provider for services that the insurance policy covers.
Benefit triggers: Used by insurance companies to determine when a person is eligible to receive benefits. The most common benefit triggers for long-term care insurance are: needing help with two or more Activities of Daily Living and having a cognitive impairment, such as Alzheimer's disease. Usually, benefits are payable after the individual meets the benefit trigger and satisfies a waiting period.
Caregiver: Anyone who helps care for an elderly person or person with a disability who lives at home. Caregivers usually provide help with ADLs and other essential activities, like shopping, meal preparation and housework.
Chronically Ill: A long-lasting condition or recurrent illness that causes a person to need help with ADLs and often other health and support services. This condition is expected to last for at least 90 consecutive days. Chronically ill is a term used in tax-qualified long-term care insurance policies to describe a person who needs long-term care because he or she cannot do a certain number of ADLs without help, or because of a severe cognitive impairment such as Alzheimer's disease.
Cognitive Impairment: Deficiency in short or long-term memory, orientation to person, place and time or judgment, as it relates to safety awareness. Alzheimer's disease is an example of a cognitive impairment.
Combination policy/Comprehensive policy: a plan feature that covers both facilities-based and home-based care. This can include the option to cover services in a nursing home, assisted living facility, adult day care center, at home, hospice care (in a facility or at home), respite services (in a facility or at home), bed reservations and caregiver training.
Community Based Services: Services and service settings in the community, such as adult day services, home delivered meals or transportation services. Often referred to as home- and community-based services, they are designed to help older people and people with disabilities stay in their homes as independently as possible.
Cost-Sharing: An enrollee's financial responsibility for health care program coverage, such as a co-payment, premium or spenddown.
Custodial care: (also called personal care) Non-skilled service or care, such as help with bathing, dressing, eating, getting in and out of bed or chair, moving around and using the bathroom.
Daily Benefit: The maximum amount the insurance will pay for a single day of long term care services.
Deductible Period: the time between becoming eligible for benefits and when long term care insurance actually begins paying benefits. Sometimes known as an elimination period or a deductible, it helps keep premiums affordable. The longer the waiting period— the lower the premiums. The waiting period can be measured in calendar days or days of service.
Elimination Period: (See deductible period)
Equity Value: Fair market value of property minus any property liabilities, such as mortgages or loans.
Estate Recovery: A process the State or County can use to recover the cost of Medical Assistance from the estate of a person or the person’s spouse either of whom received Medical Assistance. The amount the State or County recovers cannot be more than the amount it contributed to the person's medical care.
Functional Eligibility: Assessment of a person's care needs to determine if he or she meets MA eligibility requirements to cover long-term care services. It can include assessing a person's ability to perform Activities of Daily Living or the need for skilled care.
Guaranteed Purchase Option: An option that guarantees a policyholder the right to purchase additional units of a daily benefit at a later date.
Guaranteed Renewable: A policy cannot be cancelled and must be renewed by the company when it expires, unless benefits have been exhausted. The company cannot change the coverage or refuse to renew the coverage for anything but non-payment of premiums.
Incurred Payment Disbursement: This payment method will pay less than the daily maximum if the actual cost for services is less. For instance, if the policy has a $100 Daily Benefit, but the actual expenses are only $80 a day, the policy would only pay $80 a day.
Indemnity Payment Disbursement: This payment method will pay the actual dollar amount of the benefit regardless of the cost of services. For example, if the policy has a $100 Daily Benefit, the policy would pay $100, even if the actual cost of the service rendered were $75 or $125.
Inflation Protection: Allows a policyholder to increase insurance benefits over time to offset higher long-term care service costs associated with inflation.
Instrumental Activities of Daily Living: (IADLs) Activities that are not necessary for basic functioning, but is necessary to live independently. These include:
Insured: A person covered under an insurance policy.
Insurer: Any company that sells insurance to the public.
Long-Term Care Insurance: Long-term care insurance provides coverage for services such as, custodial care, nursing care, personal care, and assistance with activities of daily living for persons who are in need of such care due to old age, chronic mental or physical illness, injury or cognitive impairment. Long-term care insurance covers services provided in settings that may include, but are not limited to, the recipient’s home, assisted living or long-term care facilities. Long-term care insurance includes both individual policies and certificates issued under a group insurance contract.
Long-term Care Services: Services that include medical and non-medical care for people with a chronic illness or disability. Long-term care services include services provided in the home, skilled nursing facility (SNF) care, nursing facility care in an inpatient hospital or intermediate care facility (ICF ICF/DD). The services help meet health or personal needs and can be provided at home, in the community, or in a facility. Most long-term care services help people with Activities of Daily Living, such as dressing, bathing and using the bathroom. For Medical Assistance eligibility and payment, long-term care services are those provided to someone with limited income and assets who requires a level of care equal to that received in a nursing facility.
Maximum Lifetime Benefit: The period of time or dollar amount limit for which the long-term care benefits will be paid under the policy.
Medical Assistance Lien: Also known as a pre-death lien, a Medical Assistance lien is a method for the State to recover against assets for reimbursement of Medical Assistance rendered. A Medical Assistance lien may be filed against real property you own if you were enrolled in Medical Assistance while you were living in a nursing home. The value of the lien will be the amount Medical Assistance paid for your care, including capitation payments to a health plan.
Minnesota Long Term Care Partnership: A long-term care insurance policy that allows a person buy certain qualified Long-Term Care (LTC) insurance policies to keep more assets if they later need to request Medical Assistance to help pay for their LTC services. It allows applicants and enrollees to exclude assets and protect assets from Medical Assistance recoveries, in an amount equal to the benefits paid out by a qualified Long Term Care Partnership policy as of the effective date of eligibility of Medical Assistance.
Non-forfeiture Benefit: An option that can be added to a long-term care insurance policy that, upon voluntary termination of premiums, allows the full daily benefit to be paid for a shortened benefit period.
Outline of Coverage: A short explanation of benefits, coverage, exclusions and premiums that is given to someone who applies for insurance. It is only a summary and does not include all of the policy’s information. It is not an insurance contract.
Pre-existing Condition: A medical condition, illness or disability that a person had before he/she purchased an insurance policy.
Protected Asset Limit (PAL): The total dollar amount of assets a person is allowed to protect through the Minnesota Long Term Care Partnership. This amount is equal to the dollar amount of insurance benefits that a Partnership policy has paid on behalf the policyholder.
Respite care: Temporary care provided while a caregiver who cares for someone on a regular basis has time off. Respite care is typically 14 to 21 days of care per year and can be provided in a nursing home, adult day service center or at home by a private party.
Restoration of Benefits: Benefits are reinstated after they are used and when the need for care has ended. For example, a three year policy pays benefits for one year, there is no care needed for six months then the policy restores the year of benefits to return to a three year benefit. Make sure to check to see what percentage of the benefit is restored and how long the period has to be free of treatment before the benefits can be restored.
Return of Premium (ROP): A common non-forfeiture benefit. An option where the policyholder receives cash back, which is usually a percent of the total premiums paid to date, after lapse or death.
Reverse Mortgage: A type of loan based on home equity that allows older homeowners (age 62 or older) to convert part of the equity in their homes into tax-free income without having to sell the home, give up its title or take on a new monthly mortgage payment. Instead of making monthly payments to a lender, like a regular mortgage, a lender makes payments to the homeowner. The loan, along with financing costs and interest on the loan, does not need to be repaid until the homeowner dies or no longer lives in the home.
Rider: A written contract between insurer and insured, which changes the policy or certificate. Riders usually increase the cost of the long-term care insurance policy.
Shortened Benefit Period: A type of non-forfeiture benefit. An option where the long-term care coverage continues but the benefit period or duration amount is reduced as specified in the policy.
Skilled Care: Nursing care, such as help with medications and caring for wounds, and therapies, such as occupational, speech, respiratory and physical therapy. Skilled care usually requires the services of a licensed professional such as a nurse, doctor or therapist.
Spenddown: A cost-sharing approach which allows Medical Assistance eligibility for people whose net income is greater than the applicable federal poverty guidelines.
Spousal Benefits: An option offered by some long-term care insurance companies to spouses that allows spouses who both qualify for long-term care insurance to pay premiums that are less than if each person had purchased individual coverage. It also may allow spouses to use each other’s benefits.
Tax-qualified: A long-term care insurance policy that meets federal standards that allow a person who purchases a long-term care insurance policy to receive federal tax advantages. Policyholders are able to deduct their long- term care insurance premiums, as medical expenses on his or her income tax return, up to a certain amount.
Underwriting: The process of examining, accepting or rejecting insurance risks and classifying policyholders to charge the right premium amount for a long-term care insurance policy.
Waiting period: The number of days a person must be in a nursing facility or the number of days of home health care services that must be received before long-term care benefits will be paid under the policy. During the waiting period, most people have to pay privately for the nursing facility stay or home health care services. See deductible period.
Waiver of Premium: After a policyholder has received benefits for the specific number of days stated in the long-term care insurance policy, no further premiums are due until the person leaves the nursing home. Sometimes this feature is also available for long-term care services received in the home.
