Please find below a brief discussion of important questions and terms. For more detail, please click here to request a free copy of "Evaluating Long Term Care Insurance."
Long-Term care is the help you may need if you are unable to care for yourself because of a prolonged illness or disability. People often think of long-term care as nursing homes. In fact, the term now refers to a whole variety of private and semi-private care situations and services, including in-home care, assisted living, adult family homes, residential care and nursing homes.
Glossary of Terms and Definitions
Activities of Daily Living (ADLs): Activities that people do independently everyday - eating, bathing, dressing, moving about (mobility), transferring (for instance, from a bed to a chair), using the toilet, and maintaining bladder and bowel continence - used to measure the ability to function.
Acute Care: Care for illness or injury that develops rapidly, has pronounced symptoms and is finite in length. Medical care that is required for a short period of time to cure a certain illness and/or condition.
Adult Day Care: Social, recreational and/or rehabilitative services provided for persons who benefit from daytime supervision. An alternative between care in the home and in an institution. Refers to health support and rehabilitation services provided in the community to people who are unable to care for themselves independently during the day but are able to live at home at night.
Adult Foster Care: A live-in arrangement where one adult lives with and is provided care and/or services by an unrelated individual or family. Such arrangements may be certified by the state or managed independently.
Alternate Facility: A licensed residence other than a skilled nursing facility where care services are delivered (i.e. hospice, assisted living, Alzheimer's or Christian Science setting).
Alternate Plan of Care Benefit: Payment for a special arrangement of services specifically designed to allow the person to reside in a setting other than a nursing facility (i.e. services to provide assistance and capital improvements such as ramps, grab bars and/or durable medical equipment).
Alzheimer's Disease: A form of organic dementia resulting in premature mental deterioration, first described in 1906 by German neurologist, Alois Alzheimer.
Alzheimer's Units: Special living units within skilled nursing facilities or assisted living facilities specifically providing care and services for those with Alzheimer's disease.
Aphasia: Loss of the ability to use or understand language.
Assessment: A determination of physical and/or mental status by a health professional based on established medical guidelines.
Asset Protection: Willful legal planning to achieve protection from Medicaid "spend-down" requirements, typically provided by irreversible trusts - recently outlawed by Congress except under specific conditions.
Assisted Living Facility (ALF): A non-medical institution providing room, board, laundry, some forms of personal care, and usually recreational services. Licensed by state departments of social services, these facilities exist under several names including domiciliary care facility, sheltered house, board and care home, community-based care facility, residential care facility, etc.
Bed Reservation Benefit: Pays the cost of reserving your place in a care facility should you need to be hospitalized during a covered stay.
Benefit Period: The maximum time, usually in days, that a policy will pay the daily benefit. The average stay in a skilled nursing facility is 2.8 years, so many people choose either a 3 year plan (1095 days) or 4 year plan (1465 days) to cover the average stay plus a little time to spare. Others feel safest with an unlimited benefit period.
Capital Improvements: Permanent physical adaptations to a residence which enables an individual to remain and function in that environment.
Care Coordinator: A health care professional whose training includes managing and arranging for long term care services. This person can be a doctor, nurse, social worker or other similarly trained and, licensed professional.
Care Management: Services provided by a professional, typically a nurse or social worker, to assess, coordinate, and monitor the overall medical, personal, and social services needed by an individual requiring long-term care.
Caregiver - Primary: The key person (usually a relative) overseeing and providing the care for a person who is incapacitated.
Caregiver(s) - Secondary: Relatives or others who assist part-time in giving care.
Catastrophic Illness: Illness resulting in sudden temporary or permanent change or significant disruption to a person's normal lifestyle.
Chronic Care: Care for an illness continuing over a protracted period of time or recurring frequently. Chronic conditions often begin inconspicuously and symptoms are less pronounced than acute conditions.
Cognitive Impairment: Refers to the loss or deterioration of mental capacity in people suffering from conditions such as Alzheimer's disease.
Cognitive Reinstatement: A provision to continue a policy which has lapsed (providing that back premiums are paid) when the cause of the lapse was due to cognitive impairment.
Continuing Care Retirement Community: A residential community providing a variety of living arrangements and services from independent living apartments to ALF and SNF care.
Custodial Care: Services that can be given safely and reasonably by a non-medical person, designed mainly to assist with ADLs, including bathing, eating, dressing and other routine activities.
Daily Benefit Amount: A specified, maximum, daily, dollar amount payable on a covered period of care. Policies offer a range of choices in ten-dollar increments. Your choice should take into account the local costs of care, how much you could pay for care out of your own resources (without dipping into savings), and how much money or care you could count on from your family.
Elimination Period: A deductible. A specified time period of covered care where no benefits are payable. Ideally, should be selected as the longest period that you could sustain care costs using your available, expendable assets.
Home Health Care: Refers to a wide range of services, from skilled care and physical therapy to personal care delivered at home or in a residential setting. This care can be medical and non-medical services provided to ill, disabled, or infirmed persons in their residences.
Homemaker Services: Assistance given in managing and maintaining household activities that allows you to remain safely in your home when you can not manage those activities on your own. May include meal preparation, laundry, cleaning, chores, etc.
Inflation Protection: Increases the daily benefit amount on an annual basis. If elected, increases benefits in order to protect against the effects of inflation. Most common is the Compound 5% Inflation Rider which increases the daily benefit amount each year by 5% of the previous years daily benefit amount. The compound effect really begins to take off around the 20th year, so if you are younger when you buy, this seems to be the best choice. If you are in retirement, it's a toss-up between paying for the extra protection or simply starting out with a higher daily benefit at the beginning.
Intermediate Nursing Care: Assistance needed for stable conditions that require daily, but not 24-hour, nursing supervision. Such care is ordered by a physician and supervised by registered nurses. It is less specialized than skilled nursing care, often involves more personal care, and is generally needed for a long period of time.
Long Term Care (LTC): Also called custodial care. Assistance, expected to be provided over a long period of time, to people with chronic health conditions and/or physical disabilities who are unable to care for themselves without the help of another person.
Long Term Care Insurance (LTCI): Insurance available through private insurance companies as a means for individuals to protect themselves against the high costs of long-term care. Medicaid is a means-tested program supported by federal, state, and local funds and administered by each state to provide health care for eligible low-income individuals
Medicaid: To get Medicaid help, you must meet federal and state guidelines for income and assets. Many people start paying for nursing home care out of their own funds and "spend down" their financial resources until they are eligible for Medicaid.
Medicare: A federal government insurance program to assist those age 65 and over and the disabled with medical and hospital expenses. Medicare covers only skilled care in a skilled nursing facility and limited skilled nursing care at home. It does not provide benefits for personal or custodial care. Medicare requires co-payments and deductibles.
Medicare Supplement or "Medigap": Policies...are private insurance policies that supplement Medicare benefits by covering co-payments and deductibles for medical and hospital expenses. These policies do not provide coverage for personal or custodial care.
Non forfeiture Benefit: This benefit returns some of the investment if the coverage is eventually lapsed or dropped. It usually takes the form of a paid-up coverage with reduced benefits. Sometimes this benefit is offered in the form of a "return of premium" which returns all or some of your premium payments after a period of time or upon death. The extra cost can add from 10 - 100% to the premium cost depending upon your specifications.
Nursing Home: A facility that provides room and board and a planned, continuous medical treatment program, including 24-hour-per-day skilled nursing care, personal care, and custodial care.
Personal Care: Refers to assistance provided by another person to help with walking, bathing, eating, and other routine daily tasks. It is provided by aides who are not medical professionals but are trained to help with these tasks.
Pre-Existing Conditions: Medical conditions that existed prior to the effective date of the policy. Some policies may exclude claims stemming from a condition that falls under this definition for a specified period of time.
Respite Care: Is nursing home or home care that temporarily replaces the existing level of support received from an informal, non paid caregiver for the purpose of providing care and supervision to the patient while relieving the caregiver.
Restoration of Benefits: If you receive benefits, then later get well and don't enter a new claim period for a specified amount of time, the benefits you used may be restored- that is, they become once again available, not counted as used.
Return of Premium: A return of premium refers to the refund of all premiums paid minus any benefits/claims paid during the life of the policy due to nonpayment of premiums. A return of premium is not allowed in Washington state for long-term care. However, policies purchased in other states may have this benefit.
Skilled Nursing Care: Nursing and rehabilitative care provided by or under the direction of skilled medical personnel - available 24-hours a day & ordered by a physician under a treatment plan. Can be either in a facility setting or at-home. Note: Medicare and Medicaid both have their own definitions of "skilled nursing care" which do not necessarily match those found in LTC policies.
Skilled Nursing Facility (SNF): A state licensed institutional setting which provides nursing and rehabilitative care provided by or under the direction of skilled medical personnel - available 24-hours a day & ordered by a physician under a treatment plan.
Spend-down: Depleting almost all assets to meet eligibility requirements for Medicaid.
Third-Party Notification: Gives you the option of having the "premium overdue" notice sent to a third party as a precaution to insure that the policy does not unintentionally lapse.
Waiver of Premium: A provision which allows you to stop paying premiums once you are in a period of covered care. Usually applies to only to a facility stay, although some policies do waive premiums for approved home health care as well. Date when premium stoppage begins varies with each company.
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