MASSHEALTH AND LONG-TERM CARE INSURANCE POLICIES

The September 11 edition of The Boston Globe reported that the Cellucci administration, in an effort to encourage more Massachusetts elders to buy long-term care insurance, will be allowing insurers to sell cheaper, lower-benefit policies. "New state regulations, effective Jan. 1, will drop the current, decade-old requirement that such insurance policies cover home care as well as nursing home costs… drop the current requirement that long-term care benefits kick in after 100 days of nursing home care…(and) insurers can sell policies that don't start paying until beneficiaries have been institutionalized for a year- a $61,000 out-of-pocket expenditure at current rates." And the new rules stipulate no minimum daily benefit for nursing home care. The article reports that the regulations include some consumer protections in the form of new disclosure requirements. These include whether a policy qualifies the insured for the new federal income tax deductions and whether the insurance salesperson receives a commission on the sale, but not the amount. Advocates argue that these are not sufficient protections for the average consumer.

MassHealth already had its own regulations that seek to encourage purchase of long-term care insurance. MassHealth does not place a lien against real estate to recover the cost of medical benefits if that member was institutionalized, notified MassHealth that he/she had no intention of returning home, and had a long-term care insurance policy in place that meets MassHealth requirements at the time of the institutionalization. As of January 1 Massachusetts residents will be able to buy policies that do not protect them in this way. Whether or not the specific policy meets the MassHealth requirements is another area of mandated disclosure under the new regulations. But it still may be confusing for the consumer. In response MassHealth has issued the following clarifications.

In order to qualify for the lien exemption a policy must meet the following requirements:

1. It must cover nursing and custodial care in a nursing facility licensed by the Department of Public Health.
2. The policy must have available benefits of at least $125 per coverage day in a nursing facility, except where the actual expense incurred is less, regardless of whether accrued benefits are measured in terms of days or dollar amount.
3. The policy must have benefits available sufficient to cover at least 730 days in a nursing facility
4. Policies can't have an elimination period (days of institutionalization before policy begins to pay benefits) longer than 365 days. If the insured is discharged to the community and re-institutionalized he/she is not subject to another elimination period unless he/she has received no benefits for a period of at least 180 consecutive days. In lieu of an elimination period, the policy may have a maximum deductible of $54,750.

Bet you had to read some of this more than once. I did. Just imagine the general public. For clarification or a copy of the MassHealth regulations MGH social service staff can contact Ellen Forman at x6-5807 or eforman@partners.org.

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