What To Look For in LTC Insurance
Insurance Features | Company Features
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Insurance Features |
Typical Options |
CT Partnership Enhancements |
| Lifetime Maximum Benefit: The total dollar limit the insurance company will pay for all benefits. |
$40,000 to $1,000,000 or Unlimited (usually marketed as years of coverage, ranging from one year to unlimited) |
Same options except Partnership minimum is $106,215 ($291/day for one year).
Medicaid Asset Protection: if the insurance is insufficient to pay for one's care, one can apply to Connecticut's Medicaid program without becoming poor.
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| Daily Benefit Amount: The dollar limit the insurance company will pay in benefits each day care is needed. Note, some insurance companies allow different limits between nursing facility care and home care. |
$50 to $400 per day The average cost in a CT nursing facility is approx. $444/day, and licensed home care providers can easily cost as much. Note, the insurance companies set the maximums benefit levels. |
Current minimum allowed is $291 per day for nursing facility care, and $145.50 per day for home care. These minimums increase each year by 3.0%.
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| Inflation Protection: Benefit amounts may increase annually based upon the type of inflation protection selected. All applicants must be offered inflation protection, but with some plans, they may decline the offer. In CT, if any type of inflation protection is chosen, it must remain in effect throughout the life of the policy, even when paying claims. |
Compound at 3% to 5% or CPI, where the policy automatically increases the daily coverage 3% to 5% compounded each year (or to match CPI increases) without a corresponding premium increase. The 5% compounded inflation option is preferred, although the most expensive alternative. Simple at 3% to 5%, where the policy automatically increases the daily coverage 3% to 5% simple each year without a corresponding premium increase.
Guaranteed Purchase Option, where the policyholder is periodically given an option to increase coverage by 5% compounded (or other options, such as CPI) for an additional premium. No Inflation Protection |
Must provide no less than 3.0% Compounded Inflation Protection on the daily coverage.
While all companies will increase both daily and lifetime benefits by no less than 3.0% compounded annually, some allow policyholders 65 and older to opt not to have their lifetime benefit increase in return for a lower premium and other companies offer policies where the lifetime benefit stops increasing at age 65 while the daily benefits continue to increase. |
| Deductible or Elimination Period: The period of time that must elapse before the insurance company will pay benefits. |
None to 100 days In CT a deductible cannot be longer than 100 days. Some deductibles only have to be met once (preferred, although it can increase the premium), others have to be met for each new "period of care." |
Same options. |
| Qualifying for Benefits: One must have a "Functional Impairment" or a "Cognitive Impairment." Note, Tax Qualified plans have more specific requirements. |
Functional Impairment typically means that someone needs help with at least 2 of the following: eating, dressing, bathing, transferring, toileting or continence (ADLs);
Cognitive Impairment typically means that someone may be able to perform the above activities but forgets when or how to do them, such as with Alzheimer's Disease. |
Requirements must be written clearly in the policy. The functional impairment trigger is the same for all Partnership plans, and cognitive impairment must be determined through the use of specific standardized tests. All Partnership plans must utilize the same standardized tests and scores in determining cognitive impairment. |
| Home and Community-based Care: Covered services may include: nursing, therapies, adult day care, hospice, respite, meals, homemaker, and home health aides. |
This can be part of a "Comprehensive Plan" or a separate rider.
Look for "Case Management" services that coordinate all the care necessary regardless of who is providing the care, rather than a service that limits care options. The Homemaker benefit normally includes light cleaning, meal preparation, grovery shopping, transportation and more. Some non-Partnership policies require receipt of other services before the Homemaker benefit is allowed. |
These benefits must be offered. When selected, they must include an extensive list of services including Case Management. A Plan of Care must be prepared that describes all needed care to keep the person safely at home, and the Plan must be approved by an Access Agency, who is not involved in delivering the care.
The Homemaker benefit is available without first requiring receipt of other services. |
| Waiver of Premium: Premium stops soon after receiving benefits. |
Premiums can stop as soon as care is provided, or as late as 90 days after benefits are paid, (which means the deductible must also have been met). | Same options. |
| Alternate Services: This allows the insurance company to cover other services not listed in the policy when agreeable to the policyholder, their physician and the insurer. |
This can be very useful to allow coverage for future treatments. However, the insurance company has the right to say no. | Same options. |
| Guaranteed Renewable: LTC insurance is designed so that neither the provisions nor the premiums change over time. It also means that an insurance company must continue to honor all existing policies even if they discontinue selling the policy. Typically, they would sell the "block of business" to another insurance company who must then honor all of the policy provisions. |
The exceptions are that provisions and premiums can be changed if mandated by the state or federal government; or requested by the insurance company, but only after they show adequate proof to the Insurance Department that such a change is warranted. | Same options. |
| Tax Qualified Plans: Policies that meet certain consumer standards provide federal tax breaks shown below: Premiums paid by employers for employees' coverage can be deducted just like premiums for employee health coverage. Benefits paid are not subject to federal income tax. Co-payments may be deductible as an unreimbursed medical expense to the employee. Premiums paid by employees may be deductible as an unreimbursed medical expense (there are age-based caps). |
Benefits are triggered by a functional impairment that is expected to last at least 90 days; or a cognitive impairment. Either type of impairment must be determined by an assessment conducted in the last 12 months by a doctor, nurse or social worker. |
Same options.
All Partnership policies are Tax Qualified.
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| Connecticut Partnership-Approved Plans: Insurance companies that submit policies that meet additional consumer standards can participate in the CT Partnership. |
In addition to the enhancements shown above:
Reduced Benefit Offer: if a policyholder is about to lapse, the insurer must offer to lower the coverage and premium. Free Employer & Consumer Assistance: from the State of Connecticut. Nursing Facility Discount: facilities in Connecticut will provide at least a 5% discount to policyholders. Agent Training: all agents must attend a special certification training course. |
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| Strength of Insurance Company: It is wise to choose an insurance company that is both financially strong, and committed to the Long-Term Care market. |
Review both the "financial health" and "ability to pay claims" of a company. Ratings, such as those provided by Standard and Poors or AM Best, can be reviewed. Note that these ratings reflect the entire company, not just their LTC business. |
Same options. |
| Qualifying for Coverage: Each insurance company has its own list of health conditions (underwriting criteria) that they will use to accept or deny an application. |
Same options. | |
| Surcharges: These may apply for: payroll deductions or modal payments (e.g., weekly, bi-weekly, or monthly payments), or poor health risk. |
Same options. | |
| Discounts: These may be available for: Spouses or Partners, Preferred Health, and Groups (employer or association) |
5% to 30% or higher | Same options. |
For more information contact:
David Guttchen, Director
David.Guttchen@ct.gov
(860) 418-6318