16.2.2 LTC Provisions and Limits
HIPAA requires all LTC policies to contain certain provisions in order to qualify for tax-exempt treatment and requires the adoption of certain provisions of the NAIC's long-term care insurance model regulation.
Qualified LTC services are defined as diagnostic, preventive, therapeutic, curing, treating, mitigating and rehabilitative services, maintenance or personal care services that are required by a chronically ill individual and are provided under a plan of care established by a licensed health care practitioner.
Diagnosis of chronic illness can be made on two levels.
- Physical
- Cognitive
A physical diagnosis would mean that the individual has been certified as unable to perform at least two ADLs. An LTC policy must take into account at least five ADLs.
An individual is considered chronically ill if he/she requires substantial supervision to protect his/her health or safety owing to severe cognitive impairment* and the condition was certified within the previous 12 months.
*Cognitive relates to the thought processes of reasoning, intuition, or perception.
