Long-term care policy standards and terminology

What counts as long-term care insurance

Florida defines a long-term care insurance policy as any policy or rider advertised, marketed, offered or designed to pay for necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal care services provided in a setting other than an acute care unit of a hospital. It can pay on an expense-incurred, indemnity, prepaid or other basis.

What it is not: a policy offered primarily as Medicare supplement, basic hospital, basic medical-surgical, hospital confinement indemnity, major medical, disability income, accident-only, specified disease or accident, or limited health coverage is not long-term care insurance.

Key terms

• Chronically ill: certified by a licensed health care practitioner as either (a) unable to perform, without substantial assistance, at least two activities of daily living for at least 90 days due to loss of functional capacity, or (b) needing substantial supervision for protection from threats to health and safety because of severe cognitive impairment.
• Cognitive impairment: a deficiency in short- or long-term memory, orientation as to person, place and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.
• Licensed health care practitioner: a physician, a nurse licensed under part I of chapter 464, a psychotherapist licensed under chapter 490 or 491, or anyone else meeting commission rules.
• Limited benefit policy: a long-term care policy that limits coverage to nursing home care or to one or more lower levels of care.
• Applicant: for an individual policy, the person seeking to contract for benefits; for a group policy, the proposed certificateholder.
• Certificate: what is issued under a group long-term care policy delivered in Florida.

What the policy must carry

• The stamp. The first page must prominently show that the policy is approved as a "Long-Term Care Insurance Policy" meeting Florida law.
• Notice to Buyer. Also on page one: the policy may not cover all long-term care costs, and the buyer should periodically review it against changes in the cost of care.
• Outline of coverage. Delivered to an individual applicant at the time of application. For direct response sales it is delivered on request, and in any case no later than policy delivery. It summarizes principal benefits, exclusions and limitations, any cost the policy will not fully cover, renewal provisions (including any right to change premiums), and states that it is a summary and that the policy is approved under Florida law.
• Group certificates must describe principal benefits and exclusions and say the group master policy governs.

What the policy may not do

• No termination for age or declining health. A policy may not be canceled, nonrenewed or otherwise terminated because of the insured's age or the deterioration of mental or physical health. Only the office can authorize statewide nonrenewal, and only if renewal would jeopardize the insurer's solvency or losses cannot reasonably be mitigated.
• No prior hospitalization requirement for any benefit.
• No stepping-stone rule for institutional care: eligibility for care in one institutional setting may not depend on first receiving a higher level of institutional care.
• Prior institutionalization may be required only for waiver of premium, postconfinement, postacute or recuperative benefits, and a requirement of prior institutional care before noninstitutional benefits may not exceed 30 days. Such conditions must appear in a separate paragraph titled "Limitations or Conditions on Eligibility for Benefits."
• Preexisting conditions. An insurer may use a full health history application to underwrite. After the policy's waiting period expires, it may not use waivers or riders to exclude or limit coverage for specifically named preexisting conditions.

Home health care minimums

If a policy includes home health care, it may not, among other things:

• require that the insured would otherwise need skilled care in a skilled nursing facility;
• require an acute condition first, or prior nursing or therapy services at home;
• limit services to registered or licensed practical nurses, or require a nurse or therapist where a home health aide could do the work;
• exclude personal care by a home health aide;
• limit benefits to Medicare-certified agencies or providers;
• exclude adult day care.

Oversight

The Financial Services Commission adopts rules on disclosure, advertising and loss ratio and reserve standards. Insurers file advertising with the office and may use it immediately upon filing, but must stop at once if the office disapproves it.