Long Term Care Policy Definitions

COMMENT: Before we review and discuss some of the important provisions found in a typical individual long term care policy, it will help to define some frequently used basic terms. Other terms will be defined as they are used. Note that any term used in this definitions discussion, or in later articles, is in bold type. That means the term has a specific meaning as defined in the definitions section of the policy or somewhere else in the policy.

Activities of Daily Living

This means any of the following:

  • Bathing: Washing oneself by sponge bath; or in either a tub or shower, including the task of getting into or out of the tub or shower.
  • Dressing: Putting on and taking off all items of clothing and any required braces, fasteners or artificial limbs.
  • Transferring: Moving into or out of a bed, chair or wheelchair.
  • Toileting: Getting to and from the toilet, getting on and off the toilet, and performing related personal hygiene.
  • Continence: Ability to maintain control of bowel and bladder function; or, when not able to maintain control of bowel or bladder function, the ability to perform related personal hygiene (including caring for catheter or colostomy bag).
  • Eating: Feeding oneself by getting food into the body from a receptacle (such as a plate, cup or table) or by feeding tube or intravenously.
COMMENT: Activities of Daily Living (or ADL) is a term of art in the long term care business. Almost all long term care policies define these same 6 areas as ADLs. Inability to perform two or more of these activities without assistance is one of the ways to qualify for benefits under a long term care policy.

Adult Day Care

This is a program, of Qualified Long Term Care Services, for six or more clients furnished at an Adult Day Care Center for the purpose of supporting frail, impaired elderly or other disabled adults who can benefit from care in a group setting outside the home.

COMMENT: Adult day care is a relatively new approach to long term care. It is similar to child day care because it provides some specialized care during the day for those who require long term care but do not need institutionalization. It also provides a break during the day for those who provide the long term care at home. This is especially popular with family members who provide regular care.

Adult Day Care Center

An adult day care center is:

  1. A facility operated and licensed and/or certified as an Adult Day Care Center under applicable local laws; or
  2. Any other organization that meets ALL of the following requirements: indent withlettersProvides a program of Adult Day Care; a. Keeps a written record of services furnished to each client; b. Has established procedures to obtain emergency medical care; c. Is not a place which chiefly provides services for recreation or social services; and d. Maintains a client-to-staff ratio of eight, or less, to one, with a staff that includes a full-time director, one or more Nurses who are present at least four hours a day during operating hours, and at least two staff members on duty whenever clients are present.

COMMENT: You will note the emphasis on the center not being chiefly for recreation and social services. The operative word is "chiefly". Virtually all adult day care centers provide meals, companionship, personal care assistance, exercise, recreation, social and physical activities and social services. Many of them also offer at least some modest level of medical care. A few centers that are affiliated with a hospital or skilled nursing facility include, as a part of their services, administering medications and treatments, physical and other rehabilitative therapies, and health testing, monitoring and screening. Above all, Adult Day Care Centers offer companionship for elders who might otherwise be housebound – and a little time off for the family members who provide care.

Adult Day Care Centers may offer half-day or full-day programs, one to five days per week. Some require scheduled visits, while others allow drop-in visits.

Assisted Living Facility

This is a facility that meets all the following requirements:

  • Maintains appropriate licensing to provide Maintenance or Personal Care under the laws of the state where it is located;
  • Provides round-the-clock Maintenance or Personal Care services to assists clients whose needs include the inability to perform some Activities of Daily Living or who have Severe Cognitive Impairment;
  • Has at least three clients;
  • Uses aides trained or certified to provide Maintenance and Personal Care in accordance with any laws which apply to the provision of such care;
  • Provides twenty-four hour supervision of clients by a trained and awake staff;
  • Has formal arrangements for emergency medical care;
  • Maintains written records of services furnished to each client;
  • Serves clients three meals a day; and
  • Has appropriate methods and procedures to assist in administering prescribed drugs where allowed by law.

An Assisted Living Facility is not, other than incidentally, a hotel, motel, a place for rest, or a place for the treatment or rehabilitation of drug addiction or alcoholism. If an institution has more than one license or purpose, only that section of the institution specifically meeting the definition of Assisted Living Facility will qualify as an Assisted Living Facility.

COMMENT: The typical long term care insurance policy provides for several different types of coverage. – Treatment in an Assisted Living Facility is one of them. You will note, however, that the policy makes clear that coverage is not available if you live in other types of residences, such as a hotel, motel, rest home, drug or alcohol rehabilitation facility.

Care Advisory Services

A Care Advisor provides any number of services:

  • Assessing long term care service needs
  • Developing a long term care service plan
  • Requisitioning and coordinating long term care services
  • Implementing the long term care service plan, or
  • Periodic monitoring and reassessing long term care services

A Care Advisor is a health care professional from a Care Management Organization.

Care Management Organization

A Care Management Organization is either:

  1. An organization operated and licensed as a Care Management Organization under the laws of the state where it is located; or
  2. Any organization that meets ALL of the following requirements:
    1. Provides Care Advisory Services;
    2. Has a full-time administrator;
    3. Maintains written records of services performed for each client; and
    4. Has at least one Nurse and one Social Worker on the staff.
COMMENT: Care Advisory Services are needed to make certain that long term care services are well run and operated with some degree of responsibility and accountability. In other words, an insurance company does not want to provide benefits for slipshod, unaccountable treatment.

Community Care

This is care furnished outside of a Nursing Home, Hospice or Assisted Living Facility. It includes Home Health Care Services and Adult Day Care.

COMMENT: This is another type of care, other than Nursing Home care, that is now covered by long term care insurance policies.

Elimination Period

The number of days after the Original Coverage Effective Date of a policy during which the insured must be: (1) Chronically Ill; and (2) receiving Primary Services, (other than Hospice Care and Respite Care Services) before certain Benefits become payable. These days need not be consecutive.

COMMENT: The number of days in the Elimination is shown on the Schedule of Benefits page at the beginning of the policy. This is a figure you can negotiate. For a higher premium, you can get a shorter Elimination Period. The length of the Elimination Period is important because during this time you will not receive certain basic benefits. The long term care expenses to which these benefits might apply will be entirely your responsibility.

At the time of application, you need to weigh the higher premium cost of a shorter Elimination Period against the costs of assuming all your long term care expenses during a lengthy Elimination Period. The specific policy benefits that are, and are not, subject to the Elimination Period are discussed in our article on Elimination Period.

Formal Caregiver

A Formal Caregiver means any of the following: a Nurse, a Care Advisor, a Therapist, a Social Worker, a Home Health Aide, a Homemaker or a Certified Private Aide. Members of the Immediate Family cannot be Formal Caregivers.

COMMENT: All of the above Formal Caregivers are defined in the policy. The distinguishing characteristic of each is that they are either licensed or certified to do a specific type of work or they work under the supervision of a licensed or certified organization. Immediate Family means a spouse, child (natural, step or adopted), parent, sibling, grandchild or in-law. It also includes anyone who normally lives in the Home.

Home Health Care Agency

This is a Hospital or other organization that:

  • If licensing or certification is required, is licensed or certified as a Home Health Care Agency, under the laws where it is located, or under a public health law or similar law, to provide Home Health Care Services; or
  • Is recognized as a Home Health Care Agency by Medicare; or
  • Meets ALL the following requirements:
    1. Is licensed or certified where it is located to provide Home Health Care Services;
    2. Has at least five clients;
    3. Develops and reviews long term care service plans at appropriate intervals;
    4. Uses Home Heath Aides, trained or certified in accordance with any laws which apply to such care, to provide Maintenance or Personal Care;
    5. Provides on-site supervision of Home Health Aides by a Nurse or Social Worker;
    6. Has a Nurse or a Physician on call for a medical emergency during the hours that the Home Health Aide is in the client's Home;
    7. Maintains a written record of services performed for each client.

Home Health Care Services

Home Health Services are medical and non-medical services provided to ill, disabled or infirm persons in their residences. Such services may include Homemaker Services, assistance with Activities of Daily Living, and Respite Care.

COMMENT: Home Health Care Services can cover a variety of different services, ranging from medical to assisting with daily living activities to housekeeping, shopping and respite care to provide relief from care duties. These services can be obtained through individual specialized service providers (nurse, homemaker, personal care specialist) or by contracting with a full-service Home Health Care Agency. Although full-service Home Health Care Agencies may be more expensive, they can be extremely useful in coordinating different levels of care and when no family members are available to organize and oversee independent providers.

The type of services for which you contract and the way you arrange for them should be driven by your needs AND by the scope and coverage limitations of your long term care insurance coverage.

Hospice

This is a facility, unit of a facility, public or private agency or unit of a public or private agency that meets federal certification requirements as a Hospice, or is comparably licensed under the laws where it is located to provide care or management of the Terminally Ill.

Hospice Care

These are services furnished by a Hospice for the care or management of a Terminal Illness.

COMMENT: A Terminal Illness is an illness or injury, which a Physician certifies is likely to result in a person's death within six months. In addition to care in a Nursing Home, care in an Assisted Living Facility, Home Health Care, Adult Day Care and Respite Care, Hospice Care is another type of care now covered by most long term care insurance policies. As the needs and types of services have expanded, so has insurance coverage. At one time, long term care insurance only covered the expenses of nursing home care.

Hospice Care includes care in a hospice facility and similar end-of-life care in other locations, such as an assisted living facility or in your home.

Hospital

This is a facility that is licensed as a Hospital and provides:

  • A broad range of medical and surgical services for sick and injured persons twenty-four hours a day by, or under the supervision of, a staff of Physicians; and
  • Nursing Care twenty-four hours a day.
COMMENT: The key here is that the institution must be licensed as a Hospital. If it is not, as with any other type of health insurance, treatment will not be covered. Institutions providing experimental treatment will not be covered.

Immediate Family

This means a spouse, child (natural, step or adopted), parent, sibling, grandchild or in-law. It also includes anyone who normally lives in your house.

COMMENT: This term is relevant for determining when long term care is not eligible for coverage. Generally, expenses attributed to care provide by the Immediate Family are not covered because care provided by an immediate family member is normally given without charge.

Licensed Health Care Practitioner

This means a Physician, a registered professional Nurse or a licensed Social Worker.

Maintenance or Personal Care

This describes any care with the primary purpose of providing needed assistance to the Chronically Ill (including protection from threats to health and safety due to Severe Cognitive Impairment). Maintenance or Personal Care services may include Custodial Care and needed assistance with Activities of Daily Living.

COMMENT: Custodial Care means services provided on an extended basis to a person who is Chronically Ill to help maintain a person's health and/or functional status. Custodial Care does not include transportation or other service provided chiefly for personal convenience or companionship. Custodial Care does not ordinarily include any type of medical care.

Nurse

This is a registered professional nurse (R.N.), a licensed practical nurse (L.P.N.) or a licensed vocational nurse (L.V.N.) who is licensed under the laws where the services are performed.

Nursing Care

This means services requiring the professional skills of a Nurse, performed by a Nurse, under the orders of a Physician, and to improve or maintain Your health.

COMMENT: As defined in this model long term care policy, Nursing Care must meet four requirements: (1) The services require the special skills of a Nurse; (2) They are performed by a Nurse; (3) The services are performed under the orders of a Physician; AND (4) They are performed to improve or maintain the health of the insured. All four requirements must be met in order for the care to be recognized as Nursing Care.

Nursing Home

This is a nursing facility licensed under the laws where it is located; or any other facility that meets ALL of the following requirements:

  • Provides twenty-four hour a day Nursing Care;
  • Provides twenty-four hour a day Maintenance or Personal Care performed by a trained/certified and awake staff supervised by a Nurse;
  • Keeps a written record of all services performed for each client;
  • Has formal arrangements for emergency medical care;
  • Offers services not limited to provision of food and shelter, such as laundry and other residential services.

A Nursing Home is not a Hospital (except when it is located in a part of a Hospital designated as a nursing facility), residential facility, hotel, motel, place for rest, home for the aged, sheltered living accommodation, facility for the treatment of mental illness, continuing care retirement community or similar entity, or place for the treatment or rehabilitation of drug addiction or alcoholism.

COMMENT: Every licensed nursing facility has one or two people, called ombudsmen, who act as advocates for residents and their families when conflicts arise about facility rules or with facility staff. These ombudsmen are usually volunteers or employees of the state or county. They are not hired or paid by the nursing home.

The nursing home should be able to give you contact information for the local ombudsman and let you know when the ombudsman is scheduled to visit the facility. The local ombudsman should be able to provide you with objective, unbiased opinions about the facility and its staff, compare it with other facilities in the area, and discuss the facility's ability to handle residents who have physical and mental limitations.

There is also a state ombudsman who oversees local ombudsman programs and tracks formal complaints and health and safety violations of nursing facilities. You can contact the state office for an overall assessment of facilities. Though names vary from state to state, state ombudsmen can usually be located through a Department (Commission/Division/Office/Bureau/Board) of Aging (Senior/Elderly) Services.

Physician

The term Physician is defined in section 1861(r)(1) of the Social Security Act.

COMMENT: The Social Security Act defines a Physician as a doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the state in which he or she performs such function or action.

Plan of Care

Means a written plan prescribed by a Licensed Health Care Practitioner that identifies ways of meeting the Qualified Long Term Care Service needs of a person who is Chronically Ill.

COMMENT: A licensed practitioner of the healings arts must write the plan. A licensed practitioner of the healing arts can be a Physician, a Nurse, and a Social Worker and possibly others.

Qualified Long Term Care Services

This means necessary diagnostic, preventive, therapeutic, curing, treating, mitigating and rehabilitative services, and Maintenance or Personal Care services which: (a) are required by a Chronically Ill individual; and (b) are provided pursuant to a Plan of Care prescribed by a Licensed Health Care Practitioner.

COMMENT: The Plan of Care does not need to encompass all of the above services. This is merely a description of all of the various possible types of Qualified Long Term Care Services, any one or more of which could be part of a Plan of Care. Chronically Ill will be defined and discussed in the article on Eligibility for Payment of Benefits.

Social Worker

This means a person who is licensed as a Social Worker. This includes any Social Worker who has a license, certificate or similar permit to act as a Social Worker from a state or a body authorized by a state to issue such permits, or a person with a Masters degree in Social Work from an accredited university.

COMMENT: The key here is that the person must be licensed or certified or have, at least, a Masters degree from an accredited university.

Terminal Illness

This means an illness or injury that a Physician certifies is likely to result in a person's death within six months.

COMMENT: This is the standard definition of terminal illness.

Therapist

This means a person who has a license or appropriate professional certificate to provide Therapy Services under the laws where the services are being provided.

COMMENT: Therapy services include physical, respiratory, speech or occupational therapy rendered by a Therapist. Most home health care agencies provide all of these types of therapists. These specialists give short term assistance to people recovering from an illness or injury and on going therapy to those with permanent disabilities.