Managing Your Health Care

Medigap and Long-Term Care Insurance

Medicare Supplement Policies

Medigap or Medicare supplement policies can be purchased to help “fill in the gaps” of your Medicare coverage if you have original Medicare. You don’t need a Medigap policy if you are covered by a Medicare Advantage plan.

In Minnesota there are two standard Medicare supplement policies: “basic” and “extended basic.” As the name implies, “extended basic” policies are more comprehensive than basic policies.

An open enrollment period of six months follows when you enroll in Medicare Part B (the portion of Medicare that covers physicians and other professional services). During this period you cannot be denied Medicare supplement insurance due to an existing health condition.

Compare plans before you buy. Consider your health needs and the cost of the plans to make the right choice for your health. If you don’t understand what is covered, ask questions. Don’t feel pressured to buy. If a salesperson stops by your home unannounced, don’t feel pressured to let the person into your home. Do business on your own terms. Check your options carefully before making important decisions about your health care coverage.

Long-Term Care Insurance

Long-term care insurance helps you pay the costs of long-term care, possibly including an assisted living facility or nursing home. If you’re thinking about buying a long-term care insurance policy, you should consider the following steps before doing so.

Take Your Time and Shop Around

Since policies differ in coverage and cost, consider contacting several companies to compare and contrast policies. Also, take your time in reviewing the policies.

Check Out the Company and Agent

Check with the Minnesota Department of Commerce to make sure the company and the agent are licensed and in good standing.

Ask Around

You may want to consider consulting a financial planner, tax advisor, accountant, or attorney before purchasing long-term care insurance.

Be Sure to Review the Policy and its Requirements

The following are some of the requirements and provisions that appear in long-term care insurance policies:

Minnesota Law Requirements
Minnesota law requires long-term care policies to contain the following:

1. At least one year of coverage, including nursing home or home health care;
2. Alzheimer’s disease coverage (if the policy is initiated before the disease is diagnosed);
3. An inflation protection option;
4. An “outline of coverage” that explains benefits, limitations, and exclusions;
5. A “guaranteed renewable” clause that states the policy cannot be canceled unless the premium is not paid; and
6. A statement that the policy can be canceled by the consumer within 30 days of its start.

Duration of Benefits
A policy must cover at least one year, but can provide up to a lifetime of coverage. A policy might be less expensive if the benefit period is shorter.

Elimination Period
This refers to the number of days you must be in a nursing home or the number of home care visits you must receive before receiving benefits. The number may range from 0 to 180 days.

Qualifying for Coverage
You must meet certain criteria before collecting benefits, which could include the inability to dress, bathe, and eat independently. If a policy has stricter requirements, it is likely to cost less.

Assisted Living
This may be covered at varying levels in different long-term insurance policies. Make sure to carefully read a policy’s provisions concerning assisted living.

Inflation Protection
This protects your policy from inflation. The more a policy is protected from inflation, the more likely its premium will be higher.

Pre-Existing Conditions and Exclusions
Minnesota law requires pre-existing conditions to be covered after a six-month waiting period. You should be aware that other exclusions in the policy may apply.

Long-Term Care Partnership Program

The Minnesota Long-Term Care Partnership Program is an effort to encourage people to plan for their long-term needs. Long-term care partnership policies allow you to protect more of your assets if you need to apply for Medical Assistance in the future.

Under the program, if you purchase a partnership policy and later need to apply for Medical Assistance, you are eligible for asset protection up to the dollar amount of the benefits under your partnership policy. You are allowed to choose which assets to protect. This means that the protected assets are not counted for purposes of determining eligibility for Medical Assistance. They are also protected from estate recovery for Medical Assistance.

To be eligible for the partnership program, you must:

1. Be a beneficiary of a partnership policy;
2. Be a Minnesota resident when your coverage begins; and
3. Have exhausted all of your benefits under the partnership policy.

Partnership program benefits can be applied when you have exhausted policy benefits at the time of requesting Medical Assistance payment for your longterm care services. They can also be applied when you have exhausted policy benefits while already receiving Medical Assistance payments for long-term care services.

Not all long-term care insurance policies are long-term care partnership policies. If you already have regular long-term care insurance, you can exchange it for a partnership policy. Or you can add a “rider” to your current policy, so your existing insurance policy qualifies as a partnership policy.

Partnership policies are not right for everyone. Traditional long-term care insurance policies must give you an option to purchase inflation protection. Partnership policies must include inflation protection, unless you are 76 or older when you purchase the policy. Inflation protection generally results in a higher premium. When shopping for long-term care coverage, compare policies carefully. Discuss your options with your insurance agent to determine which policy best fits your needs and income.

To learn more about the Minnesota Long-Term Care Partnership Program, you can contact the Minnesota Department of Human Services or visit www.mn.gov/dhs/long-term-care-partnership/.

The Minnesota Department of Commerce, which licenses insurance companies and accepts complaints concerning long-term care and Medigap insurance companies, can be reached as follows:

Minnesota Department of Commerce
85 7th Place East, Suite 280
St. Paul, MN 55101
(651) 539-1500 (local)
(800) 657-3602 (Greater MN only)
www.mn.gov/commerce

Nursing Home Care

The Centers for Medicare and Medicaid Services publish a free booklet entitled Guide to Choosing a Nursing Home or Other Long-Term Care that contains useful tools such as a checklist for potential nursing homes, information about your rights and a Glossary of Terms. To obtain this book, contact The Centers for Medicare and Medicaid Services at (800) Medicare or on the web at www.medicare.gov. The Minnesota Department of Health offers a report card on Minnesota nursing homes on its website at www.health.state.mn.us or nhreportcard.dhs.mn.gov.