Life & Health Chapter 17 | Health Chapter 8: Health Insurance Plans for Seniors Concepts

Accelerated Death Benefit Rider

Pays part of death benefit early upon terminal illness diagnosis.

Activities of Daily Living (ADL)

Six essential self-care tasks: bathing, dressing, toileting, transferring, continence, eating.

Adult Day Care

Daytime custodial care for those needing ADL assistance in a staffed center.

Assisted Living Facility

Residential community offering meals, housekeeping, social activities, and intermittent nursing.

Automatic Inflation Rider (AIR)

Annual built-in 5% face-amount increase on LTC policies for a specified term.

Benefit Trigger

Activation of LTC benefits upon loss of ≥2 ADLs or presence of cognitive impairment.

Buyer’s Guide

Overview of Medigap or LTC plan options (Medigap = “Choosing a Medigap Policy”); provided at application.

Buyer’s Guide for Medigap Insurance

“Choosing a Medigap Policy” guide on Medicare Supplement plans, updated annually by CMS/NAIC.

Center for Medicare and Medicaid Services (CMS)

Federal agency that administers and regulates Medicare and Medicaid programs.

Cognitive Impairment

Deficiency in memory, orientation, or judgment due to organic aging disease.

Cold Lead Advertising

Illegal marketing that omits disclosure of potential sales-agent follow-up calls.

Continuing Care

Benefit structure for seniors in continuing care retirement communities.

Continuing Care Communities

Communities offering a continuum from independent living through nursing-home care.

Core Benefits

Legally mandated coverage elements all Medicare Supplement plans must include.

Custodial Care

Non-medical assistance with personal needs (ADLs) by unskilled personnel.

Donut Hole

Coverage gap in Medicare Part D where enrollees pay higher drug costs between phases.

Duplication of Coverage

Illegal issuance of a second Medigap policy to someone who already has one.

Elimination Period

Waiting period (time‐based deductible) before long-term care benefits begin.

End-Stage Renal Disease (ESRD)

Kidney failure stage requiring dialysis or transplant.

Formal Care

Paid professional medical and personal assistance by nurses, therapists, aides, etc.

Formulary

Prescription drug plan’s official list of covered medications by category.

Guarantee of Insurability Option (Rider)

Rider allowing future coverage increases at set intervals, adjusted for inflation.

Guaranteed Issue

Policy acceptance regardless of health status, typically during open enrollment.

Hands-on Assistance (Help)

Physical aid with activities of daily living or related tasks.

High-Pressure Tactics

Use of threats, fear, or excessive pressure to influence policy sales.

Home Care

In-home hands-on or standby support with ADLs and household tasks.

Home Health Care

Part-time in-home skilled (and unskilled) medical services like wound care, therapy.

Hospice Care

Comfort-focused end-of-life care for terminally ill patients, at home or in facility.

Hybrid (Asset-based) Long-Term Care Plans

LTC benefits funded via annuity or whole‐life policy, with unused benefits payable.

Informal Care

Unpaid assistance with ADLs and chores provided by family or friends.

Intermediate Care

Limited daily, occasional skilled nursing and rehabilitative services per physician orders.

Intermittent Care

See Intermediate Care.

Lifetime Reserve Days

One‐time hospital days after exhausting standard Part A days; not renewed each benefit period.

Long-Term Care

Broad medical, personal, and environmental services for those no longer fully independent.

Long-Term Care Insurance

Policy covering extended ADL assistance and related costs for chronic care needs.

Long-Term Care Partnership Program

State‐operated, federally backed program protecting assets when qualified LTC insurance is purchased.

Long-Term Care Riders

Riders tapping part of policy face value to fund monthly LTC service benefits.

Medicare

Federal hospital and medical insurance for 65+, disabled ≥24 months, and ESRD patients.

Medicare Advantage (Part C)

“All-in-one” private HMO/PPO alternative to Original Medicare, often includes Part D.

Medicare Part A

Original Medicare’s hospital, skilled nursing facility, home health, and hospice coverage.

Medicare Part B

Original Medicare’s physician services, outpatient care, and durable medical equipment coverage.

Medicare Part D

Voluntary prescription drug benefit, offered via PDPs or Medicare Advantage plans.

Medicare Select

Network-restricted Medigap option requiring in-network providers for full coverage.

Medicare Supplement (Medigap)

Private policies that fill cost gaps in Original Medicare benefits.

Medigap

See Medicare Supplement.

NAIC

National Association of Insurance Commissioners.

Non-Forfeiture (Benefit) Options

Benefit if LTC policy lapses: reduced paid-up value, shorter period, or premium refund.

Non-Participating Provider

Bills patients directly, refuses assignment, may charge up to 15% over Medicare rates.

Nursing Home

Facility providing around-the-clock skilled nursing care.

Original Medicare

Federal fee-for-service program comprising Medicare Parts A & B.

Part A

See Medicare Part A.

Part B

See Medicare Part B.

Part C

See Medicare Advantage.

Part D

See Medicare Part D.

Participating Providers

Providers accepting assignment and Medicare’s fee schedule for direct reimbursement.

Physical Assistance

See Hands-on Assistance.

Plan A

Basic Medigap plan covering only the Core Benefits.

Pool of Money

LTC benefit pool: unused daily allowance extends coverage days.

Post-Claims Underwriting

Underwriting after a claim is filed, possibly resulting in claim denial.

Prescription Drug Plan (PDP)

See Medicare Part D.

Primary Insurer

Pays first on a loss as though no other insurance applies.

Private Fee-for-Service (PFFS) or Medicare Advantage Plan

Medicare Advantage option letting you use any participating provider; plan sets rates.

Respite Care

Temporary care providing relief for a primary caregiver.

Return of Premium Rider

Refunds paid premiums if insured dies unused or policy lapses.

Secondary Insurer

Pays remaining loss costs after primary insurer’s payment.

Shopper’s Guide for Long-Term Care Insurance (LTCI)

NAIC’s consumer guide explaining LTCI features, costs, and suitability; required at solicitation.

Skilled Nursing Care

Doctor-ordered, medically necessary daily nursing by skilled professionals, available 24/7.

Skilled Nursing Facility

Residential facility offering around-the-clock skilled nursing care.

Stand-By Assistance

Caregiver within arm’s reach to ensure safe completion of ADLs.

Substantial Assistance

Care level denoting inability to safely perform a task—provided as hands-on or stand-by aid.

Tax-Qualified Long-Term Care Insurance Contract

HIPAA-compliant LTCI: no Medicare duplication, benefits triggered by ≥2 ADLs/cognitive impairment ≥90 days, guaranteed renewable with 30-day free look, written care plan, no cash value.

Twisting

Use of deception or misrepresentation to induce replacement of an existing policy.

Waiver of Premium

Clause suspending premium payments while the insured is receiving LTC benefits.

Persons aged 65 and older

US citizens/permanent residents (5+ yrs) with 40 SS/railroad credits (≈10 yrs work) auto-eligible for Parts A & B; others may enroll by paying full premium.

Persons under age 65

Disabled individuals drawing SSDI or RRB benefits for ≥24 months become eligible for Medicare.

Amyotrophic Lateral Sclerosis

ALS patients qualify for Medicare immediately upon SSDI award, bypassing the 24-month waiting period.

End-Stage Renal Disease (ESRD)

Kidney failure needing dialysis or transplant; Medicare begins after 3 months of treatment; employer group plan pays primary for first 30 months.

Original Medicare

Federal fee-for-service program (Parts A & B) with annual deductibles and coinsurance.

Fee-for-Service

Payment model where beneficiaries pay providers directly for each covered service.

Deductible

Annual out-of-pocket amount beneficiaries pay before Medicare cost-sharing begins.

Co-Insurance

Percentage of Medicare-approved cost paid by beneficiaries after meeting the deductible.

Medicare Supplement (Medigap)

Private policy covering Original Medicare’s cost-sharing and select excluded services.

Medicare Advantage

Private “all-in-one” HMO/PPO alternative bundling Parts A, B (often D) with network-based benefits.

Medicare Part D

Voluntary prescription drug benefit, offered via stand-alone PDPs or within Advantage plans.

Initial Enrollment Period

Seven-month window (3 months before to 3 months after 65th birthday) to enroll in Parts A & B.

Annual Open Enrollment Period

Jan 1–Mar 31 yearly window to enroll in Part B; coverage starts July 1; late enrollees pay penalty.

Special Enrollment Period

Enrollment outside standard windows for those with employer-sponsored coverage, avoiding penalties.

Special Enrollment Period

Eight-month window to enroll in Part B while on employer group coverage or within eight months after it ends; no penalty; coverage start varies by enrollment timing.

Premiums

Monthly costs for Medicare coverage determined by Social Security eligibility status and income level.

Medicare Part A Premium

Monthly charge for those with

Medicare Part B Premium

Standard monthly fee ($148.50 in 2021) deducted from Social Security or billed; income-adjusted for high earners; 10% annual penalty for late enrollment (exempt if employer-covered).

Medicare Claims

Healthcare providers submit claims to CMS; beneficiaries receive an Explanation of Medicare Benefits; patient pays non-covered costs; Medicare’s primary/secondary status depends on employer plan size.

Participating Provider

Accepts assignment and Medicare fee schedule; cannot balance-bill patients.

Non-Participating Provider

Opts out of assignment, bills directly, may charge up to 15% above Medicare rate; patient files for reimbursement.

Balance Billing

Charging patient the difference between provider’s usual fee and Medicare-approved amount; prohibited for participating providers.

Medicare Summary Notice (MSN)

Quarterly mailed summary of services billed to Medicare, payments made, and patient liabilities; not a bill.

Appeals Process

Right to contest denied claims within 120 days via redetermination form, MSN instructions, or written request to Medicare contractor with dispute details.

Employer Group Medical – COBRA Groups

Under ADEA, provides age-neutral group coverage; allows delay of Part B without penalty; prohibits incentives to drop coverage.

Employer Group Coverage

Delay Part B enrollment; group plan pays first, Medicare secondary; eligible for SEP upon retirement.

Individual/Retiree Coverage

Medicare primary, individual/retiree plan secondary; enroll in Part B with Part A to avoid penalty.