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Long-Term Care Glossary

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LTC Term Definitions
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Word/Phrase Definition
90-day ADL Certification A new requirement under HIPAA which requires certification by a licensed health professional that the loss of at least two of six activities of daily living will last a minimum of 90 days. The certification must be made to facilitate insurer claim payments.
Accelerated Death Benefit An option in a life insurance policy that will pay all or part of the policy face amount prior to death. This benefit can pay the cost associated with catastrophic medical conditions which can include the need for nursing home confinement.
Activities of Daily Living Functional routines that relate to one's ability to live independently. These activities consist of bathing, dressing, feeding, toileting, continence and mobility.
Adult Congregate Living Facility Residential or apartment housing for people which can include a minimum amount of assistance with the activities of daily living.
Adult Day Care Services provided to individuals who cannot remain alone, including health and custodial care and other related support. This care is rendered in specified centers on a less than 24 hour basis.
Adult Day Care Facility An institution designated to provide custodial and/or minimum health care assistance to individuals unable to remain alone, usually during working hours when the caregiver is employed.
Adult Day Service Services provided to individuals who cannot remain alone, including health and custodial care and other related support. This care is rendered in specified centers on a less than 24 hour basis.
Alternate Plan of Care A long term care insurance policy feature which allows for substantial flexibility in designing a recovery and/or maintenance program for a claimant, using as many types of long term care assistance as needed on a reasonable cost basis delivered in an agreed upon setting.
Asset Spend-down Procedure where an individual's income and assets are diminished in order to attain the minimum required levels of the various state's eligibility requirements for Medicaid assistance.
Assisted Living Facility Residence for long term care patients on a less expensive basis and receives some long term care services.
Benefit Period The length of time for which benefits under a long term care insurance contract will be paid (i.e.; four years or lifetime).
Bereavement Counseling A support service designed to assist family members of terminally ill patients to cope with their grief. This service is often available under a hospice care program and a benefit may be payable under a long term care insurance policy.
Care Coordinator A person designated by an insurer to organize a plan of care at claim time between the insured, medical providers and family members.
Caregiver A person providing assistance to a dependent person due to medical reasons or the inability to conduct routine activities of daily living.
Chronically Ill This is the definition under which an individual qualifies for favorable tax treatment for long term cal-c expenses, whether self-insured or reimbursed by an insurance company. To be chronically ill, the person must be either unable to perform two of six activities of daily living for at least 90 days or suffer a severe cognitive impairment.
Cognitive Impairment One of the measurements used to determine eligibility for long term care benefits in a policy, it is the deterioration or loss of one's intellectual capacity, confirmed by clinical evidence and standardized tests, in the areas of: (I) short and long term memory; (2) orientation as to person, place and time; and (3) deductive or abstract reasoning.
Comprehensive Benefits A long term care insurance plan that offers a wide variety of coverage for long term care insurance services. This plan was modeled after the NAIC model policy in 1988. These policies could be both tax-qualified and non-qualified plans.
Continuing Care Retirement Communities This campus-type environment offers houses, apartments, communal dining facilities, a nursing facility, recreation, a library and other services. An entry fee and a stipulated monthly payment is required.
Custodial Care The most common type of long term care service rendered, it provides assistance with activities of daily living and generally performed by a trained aide in a variety of settings, most often in the home.
Custodial Care Facility Licensed by the state to provide custodial care and assistance with activities of daily living and a nursing staff to oversee the administering of medication.
Daily Benefit The specified maximum amount of benefit payable for long term care services in any one day. The dollar amount may vary by service such as $100 a day payable for a nursing home confinement and $75 a day payable for health care.
Diagnostic Related Grouping Medicare uses this grouping as a guide for the treatment of Medicare recipients and payment to providers. This guide governs the length of hospital stay for each illness or injury. Hospital often force individuals not well enough to go home to be admitted into a skilled nursing facility.
Elimination Period In a long term care insurance policy, this is a period time during which no benefits are payable and is sometimes referred to a deductible. Examples of elimination periods are 15 and 100 days.
Employer-Sponsored plans This is group long term care insurance first introduced in 1987. The earlier plans were voluntary, Portable products benefits and premiums similar to individual long term care coverage. Development of true group long term care insurance plans is currently underway.
Expense-incurred A method under which daily benefit amounts are paid on the actual expenses incurred for the necessary long term care service.
Gatekeepers Also called "safety nets", these specific qualifications, must be met before becoming eligible for any specific benefit payment under long term care insurance policy. These qualifications set by insurance companies have largely been eliminated through NAIC's model policy and regulation.
Geriatric Case Manager An individual assigned to handle the various needs of a person unable to do for themselves. This qualified individual can coordinate every aspect of an aging adult's care from interviewing and hiring household help to paying bills and often serve as the eyes and ears of other family members not located in the immediate area.
Guaranteed Renewable The renewal provision of a long term care insurance policy, ensuring that the policy cannot be canceled by the insurer nor can policy provisions be changed without the insured's consent. Policy premiums, however, may be adjusted upward based on the company's experience for an entire class of business.
Health Care Financing Administration This is the administrative arm of Medicare and other programs.
Health Care Surrogate An individual designated as a medical durable power of attorney to make medical decisions on behalf of another person.
Health Insurance Portability and Accountability Act (HIPAA) This federal legislation, passed in 1996, clarified the tax treatment of long term care insurance, defining the parameters under which benefits and expenses are received tax-free.
HIPPA "Health Insurance Portability and Accountability Act" This federal legislation, passed in 1996, clarified the tax treatment of long term care insurance, defining the parameters under which benefits and expenses are received tax-free.
Home Care This is a type of long term care service, provided in the home, generally consists of activities of daily living assistance and are rendered by a trained aide.
Home Health Care A program of professional, paraprofessional and skilled care usually provided through a home health care agency to a person at home. This care is often prescribed by a physician as medically necessary and can include nursing services, physical, speech, respiratory and occupational therapy.
Home Health Care Agency An organization providing home health care or home care, state licensed or accredited as required, keeps clinical records of all patients, and is supervised by a qualified physician or registered nurse.
Home Hlth Aide Person hired to perform caregiving duties, like feeding, bathing, or assisting someone to move from a bed to a chair. They may also perform homemaker chores like laundry or shopping when they are incidental to their primary caregiving duties.
HomeMaker A person hired to do housekeeping chores but not caregiving duties. A homemaker will do dishes, laundry, vacuuming, shopping, etc, but not feeding or bathing someone.
Hospice Care A coordinated program for control of pain and symptoms for the terminally ill which may also provide support services to family members.
IADLs IADL "Instrumental Activities of Daily Living" These are primarily homemaker services such as preparing meals, shopping, managing money, using the telephone, doing housework and taking medication.
Inflation Protection Benefit This optional benefit is designed to help preserve the value of the daily benefit amount. It automatically increases the daily benefit annually on a simple or compounded basis either by a stipulated percentage amount or an index measurement.
Instrumental Activities of Daily Living (IADLs) These are primarily homemaker services such as pre-paring meals, shopping, managing money, using the telephone, doing housework and taking medication.
Intermediate Care Occasional nursing services, preventive or rehabilitative, performed under the supervision of skilled medical personnel.
Intermediate Care Facility An institution licensed by the state to provide patient care for those requiring constant availability and support, but very little in the way of skilled care. This facility may also provide custodial I care services.
Life Insurance-Based Long Term Care Insurance This is a form of long term care coverage where benefits are wrapped inside a life insurance policy. Benefits can be provided for both long term care insurance and death, with cash values also available for withdrawal.
Long distance caregiving A difficult position in caring for a family member while located in another area and not available for day to day assistance.
Long Term Care Insurance A specific type of insurance policy designed to offer financial support in paying for necessary long term care services rendered in a variety of settings.
Long Term Care Rider This is an optional benefit that can be added to a life insurance, annuity or disability income policy to provide benefits for long term care.
LTC A specific type of insurance policy designed to offer financial support in paying for necessary long term care services rendered in a variety of settings.
Managed Care A type of claims management system for long term care insurance policies using pre-selected providers who have agreed to treat insurance company claimants on a reduced cost basis.
Medicaid The joint federal and state welfare program administered by the states to provide payment for health care services, including long term care, for those meeting minimum asset and income requirements.
Medicare Federal program organized under the Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965, it provides hospital and medical expense benefits, including long term cat-c services, for those individuals over age 65 or those meeting specific disability standards.
Medicare Catastrophic Act Federal legislation enacted January 1, 1989, it expanded long term care benefit payments provided under Medicaid and also changed some Medicaid requirements. The Medicare changes in the Act were repealed that same year effective January 1, 1990. The Medicaid changes stayed intact.
NAIC Model Policy Recommended minimum policy standards as designated by the insurance industry watchdog, the National Association of Insurance Commissioners (NAIC), originally established in 1988 and amended thereafter, states have the choice to adopt part, all or none of the standards for their own regulation. HIPAA legislation, passed by Congress in 1996, redefined some of the provisions of the model policy.
Non-Qualified Plans This term refers to all long term care insurance policies being sold that do not meet the required definitions under HIPAA federal legislation. There could be adverse tax consequences for these plans sold from January 1, 1997 forward.
Nonfoifeiture Benefits This long term care insurance policy feature enables the insured to continue long term care coverage in some form after the insured has ceased making premium payments. A cash return, a paidup policy or an extended term feature are typical nonforfeiture benefits. Under Tax Qualified plans, cash refunds are not allowed.
Partnerships A joint public and private sector program that allows residents of a state to buy an approved long term care insurance policy that would pay benefits during a long term care claim and enable these residents to conserve some assets that would otherwise have to be spent down to access Medicaid. States introducing partnerships so far are Connecticut, New York, Indiana and California, but several other states are expected to introduce their versions in the near future.
Per Diem A method fbi- paying the daily benefit amount that is based on an elected amount and not on the actual expenses incurred. Long term care insurance policies that are tax-qualified have capped the $175 tax-free per diem amount that may be elected for- 1 997. This maximum is increased annually. The 1998 per diem tax-free limit is $180.
Pool of Money Under a long term care insurance program, this is a variation on the typical benefit period. Rather than designate a period of time over which benefits can be payable, this concept creates a lump sum of money to be used as needed during a long term care claim. The claim ceases when services are no longer needed or the lump sum of money runs out.
Pre-existing condition A diagnosed injury or sickness for which medical advice or treatment was sought prior to the effective date of the long term care insurance contract.
Prospective Payment System Introduced to Medicare in 1983, this is the program that payments are calculated and made to providers of medical services for- Medicare eligible individuals and includes diagnostic related groupings.
Respite Care Services provided for caregivers to permit temporary periods of relief or rest in caring for a person. These services can be provided by a home health care agency or other state licensed facility and may be reimbursable under a long term care insurance policy.
Return of Premium An optional benefit under a long term care insurance policy that provides a return of all or a portion of premiums paid less claims paid, either on a specified policy anniversary or, at policy surrender or, death of the insured.
Sandwich Generation This term was coined when describing individuals caring for both a dependent children and an aging parent or relative.
Skilled Care A professional type of nursing assistance performed by trained medical personnel under the supervision of a physician or other qualified medical personnel. It is the only type of care eligible for reimbursement in a skilled nursing facility under Medicare.
Spousal Impoverishment Protection Medicaid changes in made as part 01. the Medicare Catastrophic Act of 1988 provided an income and shelter allowance for the at home spouse whose partner is institutionally confined.
Standby Assistance An individual is considered unable to perform an activity of daily living if someone must be in close proximity to him to help when he is attempting to perform the activity.
Subacute Care Assistance provided by nursing homes for health services such as stroke rehabilitation and cardiac care for post-surgery that offers a lower cost alternative to hospital treatment of the same kind.
Swing beds Hospital beds that may be designated as either acute care or skilled nursing, changing from one to the other to continue care to the individual without having to switch rooms or facilities.
Tax-qualified plans These are long term care insurance policies that meet the definition required by HIPAA and therefore are eligible for favorable tax treatment.
Transfers In qualifying for Medicaid, transfers are moving assets to someone other than a spouse or to a trust for the purposes of qualifying for Medicaid. Transfers must be made 60 months before Medicaid application. Transfers made specifically to avoid Medicaid spend-down could result in criminal penalties for the person that assisted with the transfer.
Triple Trigger This is the designation for the three ways to be eligible for benefits under a long term care insurance policy including assistance with activities of daily living, cognitive impairment or medical necessity. This definition is not available in tax-qualified plans.
Viatical Settlements The purchase, on a reduced basis, of a life insurance policy owned by a terminally ill person.
Viator The person who is receiving the acceleration of life benefits from a viatical settlement.
Waiver of Premium A policy provision of a long term care insurance contract that suspends premium payment after a specified period of time during which the insured is receiving policy benefits for long term care services. The suspension continues until recovery at which resumption of premium payment is expected.

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