• These policies were standardized by the National Association of Insurance Commissioners
  (NAIC) to help consumers understand and compare them and make informed buying decisions

• Medicare Supplement policies sometimes provide preventative medical care benefits such as
  annual physical exams

• A Medicare Supplement policy must NOT contain benefits which duplicate Medicare benefits

• Individuals over 65 who have just enrolled in Medicare Part B for the first time cannot be refused a Medicare Supplement policy and cannot be rated if they apply for coverage within 6 months of Part B enrollment (in other words, Medicare Supplements must be guaranteed issue during open enrollment)

• All Medicare supplement policies must be guaranteed renewable

• Hospice care is included in most standard Medicare Supplement insurance policies

• Hospice care typically offers a family counseling benefit

• Medicare Supplement policies typically provide foreign travel emergency health care coverage as a core benefit when you travel outside the U.S.

• An insurer can cancel a Medicare supplement plan after the nonpayment of premiums

In general, the following six minimum standards apply to all policies designated as Medicare Supplement
Insurance:

• The policy must supplement both Part A and Part B of Medicare

• The policy must automatically adjust its benefits to reflect statutory changes in Medicare

• If the policy excludes coverage for preexisting conditions, the exclusion cannot exist for longer
  than six months. That is, no coverage can be denied as a preexisting condition after the policy
  has been in effect for six months.

• Part B expenses not covered by Medicare (that is, the 20% co-payment) must be covered by
  the Medicare supplement policy, up to a maximum of $5,000 per year. However, policies may
  include a deductible before this benefit becomes payable.

• The policy must include a minimum 30 day free-look provision

Core Benefits

All Medicare Supplement plans cover coinsurance on hospital costs, up to an additional 365 days after Medicare Part A hospital benefits run out. All Medigap policies also cover at least part of these costs:

• Medicare Part A hospice coinsurance or copayment
• Medicare Part B coinsurance or copayment
• First 3 pints of blood received as a hospital inpatient

Medicare Select

The Medicare Select plan (sometimes called Medicare Advantage or Medicare Part C) is a type of Medicare
Supplement that works like a Managed Health Care Plan. You have to choose providers that belong to a network (except in cases of emergencies).

• HMO’s, PPO’s, and Private Fee-For-Services are all types of a Medicare Advantage Plan

• With a Medicare Select plan, the insured agrees to use preferred providers, and in exchange, pay
  a lower premium

• In addition to the premium, Medicare Advantage enrollees normally must pay a small co-payment per visit or per service

• Medicare Part C does NOT cover long-term care

Medicare Part D

Medicare Part D is a prescription drug plan administered by one of several private insurance
companies, each offering a plan with different costs and lists of drugs that are covered. Participation in
Part D requires payment of a premium and a deductible.

►LONG-TERM CARE INSURANCE

What is Long-Term Care?

You'll often see nursing home care referred to as Long-Term Care. However, Long-Term Care (LTC) refers to a broad
range of medical, personal, and environmental services designed to assist individuals who have lost their ability to
remain completely independent in the community.

• Long Term Care policies require that in order for an insured to be qualified for benefits they
  must be unable to perform a minimum of two Activity of Daily Living (ADL’s)

• Activities of Daily Living (ADL’s) are considered the basic tasks of everyday life, such as dressing,
  eating, bathing and mobility

• In long-term care insurance, the benefit period is the length of time for which claims will be paid

• Although care may be provided for short periods of time while a patient is recuperating from an
  accident or illness, LTC refers to care provided for an extended period of time (normally more
  than 90 days)

• Depending on the severity of the impairment, assistance may be given at home, at an adult
  care center, or in a nursing home

• Most long-term care policies also pay benefits for “cognitive impairment” such as Alzheimer’s disease or
 other dementia

What Is Long-Term Care Insurance?

• It is similar to most insurance plans in that the insured receives specified benefits in the event
  long-term care is required

• Most LTC policies pay the insured a fixed dollar amount for each day the policy covers,
  regardless of what the care costs

Long-Term Care Coverages

• Long-term care insurance is typically designed to provide coverage for a minimum benefit period of 1 year

• The cost of a long-term care policy is based on age, health condition, and level of benefits provided

• As individuals age, they are likely to suffer from acute and chronic illnesses or conditions. An
  acute illness is a serious condition, such as pneumonia or influenza, from which the body can
  fully recover with proper medical attention. A comprehensive long term care policy will typically
  not cover expenses associated with acute care provided in a hospital.

• Traditional “reimbursement” long term care insurance policies pay benefits based upon the actual expenses that are incurred, subject to policy limits

• Most long-term care policies define a pre-existing condition as a condition for which medical advice or treatment was recommended by or received from a health care provider within six months preceding the effective date

• Some people will suffer from chronic conditions, such as arthritis, heart disease, or
  hypertension, which are treatable but not curable illnesses

• Over time, a chronic condition frequently goes beyond being a nuisance and begins to inhibit a
  person's independence

• Each application for long-term care insurance shall contain clear and unambiguous questions to
 determine the health condition of the applicant EXCEPT applications for guaranteed issue

• All long-term care policies must be guaranteed renewable

• Long-term care coverage typically offers inflation protection which allows for a periodic increase in policy benefits
  due to inflation

• The guarantee of insurability option provides the insured with the ability to purchase additional insurance
  at a later date without evidence of insurability.

• Most long-term care policies pay on a reimbursement (or expense-incurred) basis, up to the policy limits

• Benefits are usually excluded or limited for addictive behavior rehabilitation (alcohol, drugs)

• Most long-term care policies may only exclude losses due to a pre-existing condition for up to 6 months following the effective date of coverage

• Most long-term care policies have a free-look (right to return) period of 30 days after its delivery

Three categories of long-term care

• Skilled nursing care is continuous, around-the-clock care provided by licensed medical professionals under the direct supervision of a physician. Skilled nursing care is usually administered in nursing homes, custodial care facilities, and hospitals.

• Intermediate nursing careis provided by registered nurses, licensed practical nurses, and nurse’s aides under the supervision of a physician on an intermittent basis.

• Custodial care provides assistance in meeting Activities of Daily Living (ADL)
requirements, such as bathing, dressing, walking, eating, and toileting

Home and Community-Based Services

Home health care is care provided in the insured’s home, usually on a part-time basis. It can include
skilled care (e.g., nursing, rehabilitative, or physical therapy care ordered by a doctor) or unskilled
care (e.g., help with cooking or cleaning).

Adult Day Care

• Adult day care is designed for those who require assistance with various activities of daily living,
  while their primary caregivers (usually family or friends) are absent

Respite Care

• Respite care is designed to provide a short rest period for a family caregiver

Continuing Care

• Designed to provide a benefit for elderly individuals who live in a continuing care retirement
  community

Assisted Living

• Housing for elderly or disabled people that provides nursing care, housekeeping, and prepared
meals as needed. This would suit an individual who needs some nursing care supervision but
NOT full-time care.

• When individuals are in need of assistance with one or two activities of daily living, they may be eligible
for an assisted living facility.

Taxation of LTC Policies

• Qualified LTC insurance contracts are treated in the same manner as accident and health
  insurance contracts

• Tax-qualified long-term care premiums are considered a deductible medical expense if the taxpayer's medical expenses
  exceed 7.5% of their adjusted gross income wasn’t done

• Amounts received under an LTC contract are excluded from income because they are
  considered amounts received for personal injuries and sickness

• There is a limit on these amounts and these limits are adjusted for inflation annually

• Qualified long-term care insurance premiums paid by an employer are generally excluded from an employee's gross
  income

Long-Term Care Partnership Programs

The Long-Term Care Partnership Program is a Federally-supported, state-operated initiative that allows individuals who purchase a qualified long term care insurance policy or coverage to protect a portion of their assets that they would typically need to spend down prior to qualifying for Medicaid coverage.