ADLAn abbreviation for the phrase“Activities of Daily Living” that is limited to eating, bathing, dressing, continence (inability to control one’s bowel or bladder), transferring (getting in and out of a bed or chair)and toileting. ADLs are used to determine if and when a policyholdercan draw benefits under his/her policy. Typically, a policyholder must be“deficient” (unable to do) in two ADLsbefore he/she can begin to draw homebenefits under his/her Long-Term Carepolicy. An individual must be “deficient”in two or, in some policies, three ADLsbefore he/she can draw Nursing Home benefits under his/her policy.

Adult Day Care*These are services for people in a community setting which are providedin a licensed day care program that usually provides Personal Care, supervi-sion, protection or assistance in eatingbathing, dressing, toileting, movingabout and taking medications.

Adult Day Health CareServices in an Adult Day Care Center that includes a level of day care includingmedical, Skilled Nursing and therapy services in addition to those services listedunder Adult Day Care above.

Assisted Living FacilityOften incorrectly used interchangeablywith Residential Care Facility. A licenseis required to operate a Residential CareFacility (RCF) or Residential CareFacility for the Elderly (RCFE), whilethere is no specific licensure requirementfor an Assisted Living Facility. Facilitiesthat are advertised as Assisted LivingFacilities often offer Independent Livingwith on-site services such as meals,supervision, and assistance with ADLs.Many of these facilities have multiplebuildings on the same property. Peoplewho need no or relatively little assistancewith ADLs can live in the IndependentLiving units (unlicensed) while othersthat need assistance with ADLs live in a building that is licensed as a RCF orRCFE. Partnership policies will only paybenefits in a facility licensed as a RCF oran RCFE. There are special conditionsfor when Partnership policies will payfor services outside of California in unlicensed facilities.

Care ManagementCare Management is also known as CareCoordination. It is a process of assessingand reassessing an insured’s need forLong-Term Care (not specifically limitedto policy benefits alone), developing aPlan of Care, coordinating services, andmonitoring the adequacy of the care

received. Care Management takes an all-inclusive look at an individual’s totalneeds or resources, and links the indi-vidual to a full range of appropriateservices, using all available fundingsources. For Partnership policies, theCare Management must be completedby an organization independent fromthe insurance company and approved by the State Department of HealthServices. The costs of the assessment and development of a Plan of Care arecounted as administrative expenses andare not deducted from the policies’ daily or lifetime maximums. SomePartnership companies also pay the costsof coordinating services and monitoringthe adequacy of the care received as anadministrative expense.

Glossary of Long-Term Care Insurance TermsIt’s ImportantWe All Speak The Same Language!

Long-term care definitions can be confus-ing. There are many long-term care consumer guides with glossaries, each with a slightly different definition for the sameterm. The definitions in this LTC Alertapply to Partnership policies. They weredrawn from a variety of consumer guides,including some from the California

Department of Aging’s “Taking Care ofTomorrow: A Consumer’s Guide to Long-Term Care.” Many of these terms are alsodefined in the California Insurance Code(CIC). However, we have not used the CICdefinitions in this glossary, choosing insteadto use definitions that your clients wouldmore easily understand.

Co-InsuranceAn amount that a policyholder must bewilling to pay out-of-pocket to make upfor any difference between his/her policy’s Daily Benefit and the careprovider’s daily charges.

Daily BenefitThe value of benefits a policy will payeach day until the total value of the policy is exhausted.

Elimination PeriodAlso known as a deductible or a waitingperiod. This is the number of days inwhich formal paid care must be receivedafter the insured is determined to havebecome chronically ill before the policybegins paying for care. While some policies have no deductible periods andpay benefits from the first day, the mostcommon waiting periods are 30 days, 60 days, or 90 days. For Partnershippolicies, an insurer must allow at leasta nine month period in which to satisfythe Elimination Period. The Elimination Period need only be met once during alifetime. Any day when covered servicesare reimbursed by other insurance orMedicare must be counted toward meet-ing the Elimination Period. An insuredneed not meet the Elimination Periodrequirement to receive Respite Care.

Guaranteed RenewableEvery Long-Term Care policy sold to anindividual must be either GuaranteedRenewable or Non-Cancelable.Guaranteed Renewable means that thecompany cannot cancel a policy orchange any of the benefits, unless a policyholder fails to pay the premiums.Insurance companies are allowed toincrease premiums for a “class” of policies, but not for a person individually. Non-Cancelable means that a policy cannot be canceled, exceptfor non-payment of premium, and thatpremiums can never be increased after apolicy is issued to an individual.

Hands-On AssistanceThe physical assistance of another person without which the insured wouldbe unable to perform the Activities ofDaily Living.

Home Care Aide OrganizationAn entity that provides a wide range ofnon-medical assistive services to adultsand children, including: environmentalmanagement such as housekeeping,chores and shopping; companionshipand respite care; transportation andescort services; assistance with Activitiesof Daily Living such as grooming,bathing, ambulating, toilet and elimination assistance, meal planningand preparation, medication reminders.

Home Health AgencyA licensed organization which is primarily engaged in providing SkilledNursing services and other therapeuticservices to persons in the home on apart-time or intermittent basis under aplan of treatment prescribed by theattending physician. Most Home HealthAgencies are certified by Medicare, butsome choose not to be.

Home Health Care*Skilled Nursing or other professionalservices in the residence, including, butnot limited to, part-time and intermit-tent Skilled Nursing services, homehealth aid services, physical therapy,occupational therapy, or speech therapyand audiology services, and medicalsocial services by a social worker.

Homemaker Services*These services provide assistance withchores or activities that are necessary foran individual to be able to remain inhis/her residence and include house-keeping, cooking and grocery shopping.Services may be provided by a skilled orunskilled person when they are required in a Plan of Care developed by a doctoror a care team under medical direction.

Hospice Services*Hospice Services are provided in an individual’s residence and offer physical, emotional, social and spiritualsupport for an individual and his/hercaregiver and family when a terminalillness has been diagnosed. HospiceServices may be provided by a skilled orunskilled person when they are requiredin a Plan of Care developed by a doctor or a care team under medical direction.

Independent LivingPlace in which residents are expected tofunction independent of any assistancewith their Activities of Daily Living.Independent Living includes seniorretirement communities, retirementapartment buildings, mobile home parksand independent single family dwellingswith no services.

Instrumental Activities of Daily Living*

IADLs are the activities of using thetelephone, managing medication, moving about outside, shopping foressentials, preparing meals, laundry andlight housekeeping.

LapseTermination of a policy due to the policyholder’s failure to pay the premium.

Lapse ProtectionCompanies are required to allow apolicyholder to reinstate his/her policyafter a Lapse if the policyholder canshow that his/her failure to pay premiums was because of an impairmentin cognitive or functional abilities.Reinstatement of the policy shall beavailable to the insured if requestedwithin five months after terminationand shall allow for the collection of past due premiums.

Long-Term CareServices and assistance to an individualwho has severe limitations in his/her ability to function independently andrequire care over an extended period oftime. The inability to function inde-pendently can result from either physicalor mental limitations and is defined interms of the inability to perform essential Activities of Daily Livingand/or Instrumental Activities of DailyLiving. Long-Term Care can be receivedin a Skilled Nursing or a ResidentialCare Facility.

Look-Back Period for Medi-CalThe time (currently 30 months) during which a person may not transfer property to others, or set up certain types of trusts, in order to qualify for Medi-Cal. When a personapplies for Medi-Cal, any transfers made during -

this Look-Back Period could be countedas part of the applicant’s assets for pur-poses of Medi-Cal qualification. Thismay result in a period of ineligibilityduring which an individual will have topay for his/her Long-Term Care costs, even though they are receiving other Medi-Cal benefits.

Medi-CalThis is California’s version of Medicaid,a joint federal and state program forpeople with low incomes and few assets.Medi-Cal provides health care services topeople on public assistance and to otherswho cannot afford to pay for these serv-ices themselves.

Medi-Cal Asset ProtectionA unique feature that is only available ina Partnership-Certified policy. It is anexemption to Medi-Cal eligibility rulesthat allows people to keep more moneythan they would otherwise be able tokeep, and still qualify for Medi-Cal.Every dollar paid out in benefits by aPartnership-Certified policy will protectan equal amount of an individual’s assetsin the event that he/she ever needs Medi-Cal benefits. This benefit is mostvaluable to an individual who can onlyafford a policy that will provide servicesfor one or two years. If the policy benefits are used up, the individual canqualify for Medi-Cal to pay for their Long-Term Care needs without becoming impoverished.

Medigap CoverageA private insurance that supplementsMedicare. While Medigap (Medicaresupplement) policies typically coverMedicare’s deductibles and Co-Insuranceamounts, they do not provide benefitsfor Long-Term Care. Like Medicare,Medigap policies primarily cover hospi-tal and doctor bills and limited skilledcare in a nursing home.

Monthly BenefitAll Partnership policies (and some, butnot all traditional policies) allow greaterflexibility in the use of home and com-munity care services by combining DailyBenefits to create a Monthly Benefit cap.For example: A traditional policy maypay $100 a day nursing home benefitand $50 a day home and communitybased benefit. If the policyholder, how-ever, needs $200 of home-based care oneday and no services the next day he/she

would have to pay $150 out of his/her own pocket to supplement theone day of home-based care. With aPartnership policy, the policyholderaccrues a “bucket of money” ($50 x 30= $1,500) that he/she can spend as aMonthly Benefit when home-basedservices are actually needed.

Nonforfeiture BenefitsNonforfeiture Benefits allow the policy-holder to retain some benefit of a Long-Term Care insurance policy ifhe/she Lapses his/her policy. Theamount of that remaining benefit will be specified in the policy.

Nursing FacilityNursing Facilities are licensed by the California Department of HealthServices to provide both Skilled Nursingand Personal Care. Residents receivingSkilled Nursing care usually are conva-lescing from serious illness or surgeryand require continuous observation andrehabilitation. The most common typeof non-medical care given in NursingFacilities is Personal Care services suchas assistance with ADLs like bathing,grooming and toileting. Most residentsare only receiving Personal Care servicesin a Nursing Facility and have cognitiveimpairments such as Alzheimer’s disease,or they are extremely elderly and can nolonger live independently at home.

Outline of CoverageA summary of the terms of a policy or certificate. Agents are required to provide an Outline of Coverage to prospective applicants at the time of initial solicitation. If a person is purchasing insurance through the mail,companies must give him/her theOutline of Coverage with the application or enrollment form.

Partnership-CertifiedA Long-Term Care insurance policyapproved by the California Partnershipfor Long-Term Care containing key features that meet the special regulationsof the California Department of HealthServices. These key features assure thatmeaningful services will be provided in the event an individual needs Long-Term Care services. Partnership-Certified policies are especially designedto meet the Long-Term Care needs ofpeople with modest to middle income.

Personal Care*Personal care provides “Stand By” or“Hands-On” help in order for an individual to be able to perform his/herADLs and IADLs. It also includes helpwith self-administration of medications.A person with cognitive impairment(i.e., Alzheimer’s disease) often does notneed assistance with ADLs, but oftenneeds Personal Care in the form of verbal cues, or “Stand By” assistance tobe certain he/she does not hurt him-self/herself in activities such as cooking.The Partnership policies cannot requirethat the provider of the Personal Careservice be at a level of licensure or certi-fication greater than that required bylaw to perform that service or requirethat the service be provided byMedicare-certified agencies or providers.

Plan of CareMeans a written individualized plan of

services prescribed by a Licensed HealthCare Practitioner (LHCP). ForPartnership policies, the LHCP must be an employee or a designee of a CareManagement Organization approved by the State Department of HealthServices. The Partnership requires thePlan of Care to include the type and frequency of all formal (provider is paid)and informal (provider receives no reimbursement) Long-Term Care services required for the insured, and thecost to the insured, if any, of any formalLong-Term Care services prescribed.The Plan of Care must also include anon-inclusive list of potential providersavailable in the community that canprovide the services listed.

Pre-existing ConditionsMedical conditions that existed, werediagnosed, or were under treatmentbefore the policy was issued. Long-TermCare insurance policies may refuse topay the benefits payable for such conditions during the first six monthsafter the policy was issued. Some companies will pay for any pre-existing conditions revealed at the time of application.

Residential Care FacilityThese facilities provide room and board,assistance with personal care and anynecessary supervision. They range in sizefrom small, two- to six-bed “mom andpop” operations to facilities with over200 living units. They are licensed bythe California Department of Social Services.

Respite Care*Means the supervision and care of theinsured in the home or out of homewhile the family or other individualswho normally provide care take short-term leave or rest that providesthem with temporary relief from theresponsibilities of caregiving. Eligibleproviders for Respite Care include: a Nursing Facility, a Residential CareFacility, community-based programssuch as an Adult Day Health/SocialCare provider, persons employed by aHome Health Agency, and a person who is qualified by training and/or experience to provide the care.

Severe Cognitive Impairment Means that an individual needs supervi-sion or assistance to protect himself/her-self or others because of mental deterio-ration caused by Alzheimer’s disease orother organic mental diseases. In policiesthat use the Federally Tax Qualified eligibility standard, an individual mustrequire substantial supervision becauseof Severe Cognitive Impairment.“Cognitive Impairment” (a definitionused for non-Federally Qualified poli-cies) and “Severe Cognitive Impairment”(a definition limited to Federally

Qualified policies), are measured byclinical evidence and the same standard-ized mental health tests.

Skilled NursingNursing and supportive care provided by licensed nurses to patientswho need nursing service on an extend-ed basis. This care is usually provided 24hours a day, is ordered by a physician,and involves a treatment plan. SkilledNursing care is generally provided in anursing facility, but may also be provid-ed in other settings such as the patient’shome with help from visiting nurses or therapists.

Skilled Nursing FacilityA health facility or a distinct part of a hospital or other institution that:

• provides room and board; • provides 24 hour a day nursing care

and related services on a continuinginpatient basis;

• has a registered professional nurse onduty or on call at all times;

• has a duly licensed physician available in case of emergency;

• has a planned program of policiesand procedures developed with theadvice of, and periodically reviewedby, at least one physician; and

• maintains a clinical record for each patient.

Residents receiving Skilled Nursing careusually are convalescing from serious illness or surgery and require continuousobservation and rehabilitative services.

Stand-By Assistance The presence of another person withinarm's reach of the insured that is neces-sary to prevent, by physical intervention,injury to the insured while the insured is performing an ADL, such as being readyto catch an individual if he/she fallswhile getting into or out of the bathtub.

Step-DownA policy feature which allows a policyholder to reduce coverage inexchange for a lower premium. Thereare primarily three ways this can bedone. A policyholder can reduce theDaily Benefit, or the total number ofyears the policy will pay, or he/she canchange his/her coverage from aComprehensive policy to a NursingHome Only policy if the company sellsone. This right to reduce coverage canbe exercised anytime after the first yearor whenever the premium increases.Companies must also offer this optionto a policyholder if he/she stops payingpremiums as an alternative to lapsing coverage.

Waiver of PremiumPolicies certified by the Partnership must waive the premiums upon a policyholder’s receipt of the policy’sResidential Care Facility or NursingFacility benefit. Some Partnership policies waive the premium upon receipt of Home Care services.

* Also defined in the CaliforniaInsurance Code Section 10232.9