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Document Sample
John Hancock Life Insurance Company
(John Hancock)
Presentation on
The Texas A&M University System
Long-Term Care Insurance Plan
Enrollment Period:
November 6 – December 22, 2006
Plan Effective Date:
January 1, 2007
1 Long-Term Care Insurance is underwritten by John Hancock Life Insurance Company, Boston, MA 02117.
GLTC -ABC-EMS-10/02 TX
(07/04)
Agenda
• What Is Long-Term Care?
• Who Pays for Long-Term Care Services?
• Need for Long-Term Care Insurance
• Plan Design Overview
2
GLTC -ABC-EMS-10/02 TX
(07/04)
What Is Long-Term Care?
• Long-term care is personal care or
supervision needed by persons of all ages
for an extended period of time
• It may be needed due to an accident or
illness, or the effects of aging
• Some conditions that may require long-term
care include:
– Head Injury
– Multiple Sclerosis
– Parkinson’s Disease
– Stroke
– Heart Disease
– Alzheimer’s Disease
3
GLTC -ABC-EMS-10/02 TX
(07/04)
What Is the Difference Between Long-Term
Care and Long-Term Disability?
• Long-term care insurance helps protect
against financial loss in the event that you need
long-term care services. If you become unable to
care for yourself due to chronic illness, injury or
the effects of aging, this insurance can help
defray the costs of long-term care services.
• Long-term disability insurance is meant to
replace your income if you are unable to work
due to illness or non-occupational injury.
Long-term disability insurance does not provide
benefits for long-term care services.
4
GLTC -ABC-EMS-10/02 TX
(07/04)
What Is the Cost of Care in My Area?
Average yearly cost of a nursing home in the United States*: $55,000 ($150 per day)
AVERAGE COSTS OF NURSING HOMES (PER DAY)**
Austin $127 – $160
Dallas/Ft. Worth $139 – $198
Houston $127 – $158
San Antonio $114 – $157
Average yearly cost of home health care in the United States*: $31,200 ($85 per day)
AVERAGE COSTS OF HOME HEALTH CARE (PER HOUR)**
Home Health Aide Registered Nurse
Austin $16 $60
Dallas/Ft. Worth $16 $140
Houston $17 $85
San Antonio $16 $41
*Source: U.S. General Accounting Office (GAO), 2000. “Long-Term Care Insurance: Better Information Critical to Prospective
Purchasers”, September 2000.
5 **Source: Harris, Rothenberg International, 2005. “Survey of Average Costs of Nursing Home, Assisted Living and Home Care
Across the United States”, July 2005.
GLTC -ABC-EMS-10/02 TX
(07/04)
Who Pays for Long-Term Care Services?
Other Public Other Private
3% 4%
Private
Insurance
10%
Out of Pocket
25%
Medicare
14%
Medicaid
44%
Total Long-Term Care Costs in 1999:
$134 Billion
Source: U.S. General Accounting Office (GAO), 2001. “Long-Term Care: Baby Boomer Generation Increases Challenge of Financing
Needed Sources”, March 2001.
Graph Source: U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services (formerly Health Care
Financing Administration (HCFA), Office of the Actuary, National Health Statistics Group, Personal Health Care Expenditures (excerpt
6 from GAO Report, GAO-01-563T, entitled “Long-Term Care: Baby Boom Generation Increases Challenge of Financing Needed
Services”), March 2001.
GLTC -ABC-EMS-10/02 TX
(07/04)
Is There a Growing Need for Long-Term
Care Insurance?
• Aging “Baby Boomer” Generation
• Changes in Family Composition
– More working women, divorces, later marriages
– Informal caregiving is difficult
• Medical Advances
– Prolong life, not necessarily independence
• Social Security, Medicare and Medicaid may face increased financial
pressures
7
GLTC -ABC-EMS-10/02 TX
(07/04)
What Are the Odds of Needing Long-Term
Care Services?
1 in 743
House Fire
(major damage)*
1 in 43
Auto Accident
(totaled)**
2 in 5
Long-Term Care***
*Sources: U.S. Bureau of the Census Data, 2000, and year 2000 Fire Information provided by National Fire Protection Association,
Home Fire Statistics, November 2001. Source Information: The result of dividing the number of people in the U.S. in 2000, by the
number of house fires in the U.S. in 2000.
**Source: U.S. Bureau of the Census Data, 2000, and year 2000 data collected by the Federal Highway Administration, 2001. Source
information: The result of dividing the number of people in the U.S. in 2000, by the number of auto accidents in the U.S. in 2000.
8 ***Source: U.S. Agency for Healthcare Research and Quality (AHRQ), 2000. Source information: “Two in five of people turning 65 may
need LTC at some point in their lives”. AHRQ Focus on Research. AHRQ Pub. No. 02-M028, March 2002.
GLTC -ABC-EMS-10/02 TX
(07/04)
Plan Design Overview*
*Refer to the Outline of Coverage in the Enrollment Package
for more details about the plan.
9 Long-Term Care Insurance is underwritten by John Hancock Life Insurance Company, Boston, MA 02117.
GLTC -ABC-EMS-10/02 TX
(07/04)
Who Is Eligible for the Plan?
• All actively-at-work employees on US payroll, eligible to
participate in the Teacher Retirement System of Texas
(TRS) or Optional Retirement Program (ORP) working at
least 50% time for at least 4 ½ months
• Actively-at-work graduate student employees on US
payroll, working at least 50% time for at least 4 ½ months
• Actively-at-work employees who are serving a postdoctoral
fellowship with an institution in The Texas A&M University
System
• Retirees
• Spouses and surviving spouses of eligible employees and
retirees*
• Parents and parents-in-law of eligible employees and retirees
• Grandparents and grandparents-in-law of eligible employees
• Siblings of eligible employees.* Also includes spouses of eligible siblings.
• Adult children of eligible employees.* Also includes spouses of eligible adult children.
• Insureds with coverage under the existing CNA long-term care insurance plan, provided all
eligibility requirements are met on the date your coverage is to become effective
*Spouses, siblings and adult children must be age 18 or older to apply.
10 All applicants must reside within the US (50 states and the District of Columbia) on their effective date of coverage,
except eligible, active employees and their spouses.
GLTC -ABC-EMS-10/02 TX
(07/04)
How Do I Apply for Coverage?
• All eligible, actively-at-work employees who enroll
between November 6 – December 22, 2006,
receive guaranteed acceptance and can enroll
via the:
– Web
– Enrollment Form
• All other eligibles must provide proof of good
health by completing the statement of health
questionnaire on the application
• Applications are available on the web and in the
enrollment kit
• Eligible family members may apply whether or not
the eligible employee or retiree applies
• If you are currently insured under the existing CNA
plan, please refer to the package that was recently
sent to your home for more information on how you
11 may apply
GLTC -ABC-EMS-10/02 TX
(07/04)
What Services Are Covered?
• Nursing Home Care (including
inpatient hospice)
• Alternate Care Facility Care*
• Community Based Professional Care
– Home Health Care
– Adult Day Care**
– Hospice Care
– Homemaker Services
• Informal Care
• Alternate Plan of Care
*Kansas requires an expanded nursing home definition to be used. It includes licensed
nursing care homes, intermediate personal care homes, assisted living facilities and
12 residential care facilities. A separate alternate care facility benefit is not available.
**Washington state refers to this as Adult Day Health Care.
GLTC -ABC-EMS-10/02 TX
(07/04)
How Much Does the Plan Pay in Benefits?
Daily Maximum Benefit (DMB) Options
1 2 3 4 5
Nursing Home DMB (100%) $100.00 $150.00 $200.00 $250.00 $300.00
Alternate Care Facility DMB1 (100%) $100.00 $150.00 $200.00 $250.00 $300.00
Community Based
Professional Care DMB2 (75%) $75.00 $112.50 $150.00 $187.50 $225.00
Informal Care DMB3 (25%) $25.00 $37.50 $50.00 $62.50 $75.00
6-Year Lifetime Maximum Benefit (LMB) $219,000 $328,500 $438,000 $547,500 $657,000
The total of benefits payable for all charges incurred on any day will not exceed the Nursing Home
DMB, except for the Stay at Home Benefit and Alternate Plan of Care.
1 Kansas requires an expanded nursing home definition to be used. It includes licensed nursing care homes, intermediate personal care homes,
assisted living facilities and residential care facilities. A separate alternate care facility benefit is not available.
2 This includes Adult Day Care (Washington state refers to this an Adult Day Health Care) and the following services provided in your home: Home
13 Health Care, Hospice Care and Homemaker Services that are provided by a person who is certified or employed through a licensed Home Health Care
Agency.
3 Informal Care has a calendar year maximum of 30 x the Informal Care DMB.
GLTC -ABC-EMS-10/02 TX
(07/04)
Can I Make Changes to My Benefits
After I Am Covered?
• You can elect a decrease in coverage at
any time without providing proof of good
health
• You can apply for an increase in coverage
at any time, but you must provide proof of
good health
• Premium for the increase will be based on
your issue age at time of increase
• If you are declined for the increase, you
will retain your original Nursing Home DMB
Conditions:
• You have not been eligible for benefits at any time during the prior six months
14 • You are less than issue age 85
• Your coverage is not in reduced paid-up status
GLTC -ABC-EMS-10/02 TX
(07/04)
Does the Plan Include Protection Against
Inflation?
Future Purchase Option*
• Voluntary coverage increase offered without
proof of good health every three years, if
eligible**
• Premiums for coverage increase based on
current issue age at time of offer
• You may skip any increase offer and still be
offered subsequent increases
• Increase amount to the Nursing Home DMB
will be at least 5% compounded annually for
the applicable period (rounded to nearest $5)
• The LMB will increase in proportion to the
DMB
*Future Purchase Option is issued on form D-LTC-INF(2002-2).
**An offer is not available if you are issue age 85 or older, or if you have met the benefit eligibility requirements under
15 the policy in the six months prior to the increase effective date, or if coverage is in reduced paid-up status. If you are a
resident of Connecticut, Delaware, Indiana or Kansas, this provision varies slightly.
GLTC -ABC-EMS-10/02 TX
(07/04)
Inflation Addition* Example
1. You purchase the $100 Nursing Home DMB with an LMB of $219,000
at issue age 40. Three years later, if you are eligible**, you will be offered
an inflation addition based on 5% compounded annually (or, roughly 16%),
which rounds to an additional $15 in your Nursing Home DMB.
2. If you elect the inflation addition, your premium for this additional coverage
will be based on your issue age at the time of coverage, which would be 43.
The premium for the original $100 Nursing Home DMB will remain at the
40-year-old rate.
3. Your new monthly premium would be the sum of premium for your original
coverage purchased at age 40, plus premium for your inflation addition
increment based on issue age 43. Your new Nursing Home DMB amount
would be $115.
4. Your new LMB amount would be $251,850 ($115 x 365 days x 6 years).
*Inflation Addition Feature is issued on form D-LTC-INF(2002-2).
**An offer is not available if you are issue age 85 or older, or if you have met the benefit eligibility requirements under
16 the policy in the six months prior to the increase effective date, or if coverage is in reduced paid-up status. If you are a
resident of Connecticut, Delaware, Indiana or Kansas, this provision varies slightly.
GLTC -ABC-EMS-10/02 TX
(07/04)
Does the Plan Include Protection Against
Inflation?
Automatic Benefit Increase (ABI)*
• Optional at time of enrollment for an
additional cost
• Each year, the Nursing Home DMB will
increase at an annual rate of 5%
compounded**
• The LMB will increase in proportion to the
increase in the Nursing Home DMB
*Automatic Benefit Increase is issued on form D-LTC-INF (2002-2)
17 **No increases will occur if coverage is in reduced paid-up status.
GLTC -ABC-EMS-10/02 TX
(07/04)
Automatic Benefit Increase Option vs.
Premium
Future Purchase Option
Time
Future Purchase Option (FPO) Automatic Benefit Increase Option (ABI)
18
GLTC -ABC-EMS-10/02 TX
(07/04)
Can I Stop Paying My Premiums and
Still Have Coverage?
Nonforfeiture Benefit
(Reduced Lifetime Maximum Paid-up Benefit)*
• If you purchase this benefit option at enrollment
for an additional cost, you may elect to stop
paying premiums after 3 or more years of
continuous coverage and keep the full DMB
amount with a lower LMB amount
• Your reduced LMB will be equal to the greater of
30 x the Nursing Home DMB or the sum of
premiums paid in
• If you exercise this benefit after a minimum of 10
years of continuous coverage, the reduced LMB
would be equal to the greater of 90 x the Nursing
Home DMB or the sum of premiums paid in
*Nonforfeiture Benefit (Reduced Lifetime Maximum Paid-up Benefit) is issued on form D-LTC-NF(2002-2).
19 If you decline this Nonforfeiture Benefit Option, your coverage will include a Contingent Nonforfeiture Benefit.
GLTC -ABC-EMS-10/02 TX
(07/04)
Are There Any Benefits Payable At Death?
The Refund of Premium Benefit* refunds a portion of premiums paid less any benefits paid
or payable should an insured person die prior to age 75.
Percentage of Premium Returnable
Age % of Premium
65 or younger 100%
66 90%
67 80%
68 70%
69 60%
70 50%
71 40%
72 30%
73 20%
74 10%
75 or older 0%
*The Refund of Premium at Death Benefit is issued on form D-LTC-ROP (2002-2)TX
20 The Refund of Premium Benefit is built into the plan. Some states refer to this as Return of Premium at Death Benefit.
No benefit is payable if coverage is in reduced paid-up status.
GLTC -ABC-EMS-10/02 TX
(07/04)
What Additional Services Are Covered?
The plan also includes:
• Stay at Home Benefit*
– Care Planning Visit
– Home Modifications
– Emergency Medical Response System
– Durable Medical Equipment
– Caregiver Training**
– Home Safety Check
– Provider Care Check
*The Stay at Home Benefit amount is equal to 30 x the Nursing Home Daily Maximum Benefit
21 (DMB) and is a separate pool that does not reduce the Lifetime Maximum Benefit (LMB).
**The Caregiver Training amount will not exceed 5 x the Nursing Home DMB.
GLTC -ABC-EMS-10/02 TX
(07/04)
What Additional Features Are Included?
• Bed Hold Benefit – if you are receiving plan
benefits in a nursing home or alternate care
facility and need to leave the facility
temporarily for any reason, your coverage
will pay to hold your bed at the facility for up
to 60 days per calendar year
• Portability – if you retire or leave the
A&M System, your coverage may be
continued at group rates
• Hospice Care – available during the
Qualification Period for inpatient and
at-home hospice services
22
GLTC -ABC-EMS-10/02 TX
(07/04)
What Additional Features Are Included?
• Restoration of Benefits – if you have recovered from being in
claim, your coverage allows you to restore your LMB if you provide
proof that you:
– have not met the benefit eligibility criteria during the 24-month period
prior to the request for restoration
– have not exhausted your LMB, and
– have been continuously insured on a premium-paying basis for at least
24 months
• International Benefits – pays actual charges incurred for any day
of covered services outside the US (50 states and District of
Columbia), up to the International Daily Benefit Maximum (75% of
the DMB payable had the services been received in the US)*
23 *Limitations and plan modifications will apply.
GLTC -ABC-EMS-10/02 TX
(07/04)
How Is My Premium Calculated?
• Premiums are based on issue age
• Issue age is your age on the later of the
plan effective date (January 1, 2007) or the
date John Hancock receives your
application
• Premiums will not increase because of age,
illness or use of benefits (premiums can be
increased only for a class or group of
insureds)
• The younger you are when you enroll, the
lower your premiums will be
• Rates guaranteed for 5 years from the plan
effective date
24
GLTC -ABC-EMS-10/02 TX
(07/04)
How Do I Pay My Premiums?
• Active employees, other than
Postdoctoral Fellows, and their spouses
pay premiums through deductions from
the employee’s paycheck
• All other participants, including
Postdoctoral Fellows, pay premiums
through automatic bank withdrawal or
direct billing
• Direct billing allows you to choose
how much to pay at a time (minimum
of one month)
25
GLTC -ABC-EMS-10/02 TX
(07/04)
What Is the Monthly Cost for Coverage?
Sample Premiums by Issue Age
Nursing Home DMB Option 30 40 50 60
$100 $8.80 $13.00 $23.60 $50.80
$150 $13.20 $19.50 $35.40 $76.20
$200 $17.60 $26.00 $47.20 $101.60
$250 $22.00 $32.50 $59.00 $127.00
$300 $26.40 $39.00 $70.80 $152.40
Rates are based on the standard plan:
• Without the Nonforfeiture Benefit option (form D-LTC-NF(2002-2)); rates with this option will vary
• Without the Automatic Benefit Increase option (form D-LTC-INF (2002-2)); rates with this option will vary
• With a 90-day Qualification Period
• Without any Inflation Additions elected
If you are a resident of Connecticut, Delaware or Kansas, your rates will differ.
26 P-FACE (2002-2) TX
Premiums will vary with the choice of benefits selected.
GLTC -ABC-EMS-10/02 TX
(07/04)
What If I Invest My Premium?
$500,000
$450,000 $438,000
$400,000
$350,000
$300,000
$250,000
$200,000
This comparison is:
$150,000 • Based on $200 Daily Maximum
Benefit, without the
$100,000 Nonforfeiture Benefit option
$59,262 (form D-LTC-NF (2002-2)) or
$50,000 the Automatic Benefit Increase
$9,360
Inflation Option
$0
Total premiums paid Investment of Lifetime Maximum • Based on monthly cost for
through age 70 premiums at 10%
through age 70
Benefit
40-year-old = $26.00*
• For illustrative purposes only.
27 Investment results will vary
*If you are a resident of Connecticut, Delaware or Kansas, your premium would vary.
GLTC -ABC-EMS-10/02 TX
(07/04)
How Do I Qualify for Benefits?
• Prior hospitalization is not required
• You need substantial assistance (hands on or stand by) from another
person to perform at least 2 out of 6 Activities of Daily Living listed below
(which is expected to continue for at least 90 days)
OR
You need substantial supervision due to Cognitive Impairment
• A licensed health care practitioner must certify that you meet the above
criteria
• Care or services must be included in a plan of care prescribed by a
licensed health care practitioner
• The Activities of Daily Living are:
– bathing
– dressing
– eating
– toileting
– transferring
28
– maintaining continence
GLTC -ABC-EMS-10/02 TX
(07/04)
What Services Do Care Coordinators
Provide?
• Verify that you meet the benefit eligibility
criteria
• Provide unlimited Care Coordination and
Care Advisory Services (not managed
care)
• Provide information and education on
different types of facilities and levels of
care
• Conduct periodic reassessments for
benefit eligibility
• Research long-term care resources for
insureds and their families
• Negotiate discounts with LTC providers
29
GLTC -ABC-EMS-10/02 TX
(07/04)
Do I Have to Pay Premiums While
Qualified for Benefits?
Waiver of Premium Feature
• Premiums waived while the insured is
eligible to receive benefits
• Premium payment resumes on the first
of the month following the date the
insured no longer qualifies for benefits
30
GLTC -ABC-EMS-10/02 TX
(07/04)
Highlights of the Plan
• Guaranteed Acceptance for eligible employees who enroll during the designated
2006 enrollment period and are actively at work on their effective date of coverage
• No plan linkage - eligible family members can apply whether or not the employee or
retiree applies
• Informal Care Benefit can be paid to family members, friends, or neighbors
• Inflation Protection Choices– allows your benefits to remain meaningful over time
• Optional Nonforfeiture Benefit (Reduced Lifetime Maximum Paid-up Benefit)
• Built-In Refund of Premium Upon Death Benefit
• Bed Hold Benefit
• Portability – you can continue coverage if you leave or retire from the A&M System
• Unlimited Care Coordinator and Care Advisory Services – not managed care
• One-Time Qualification Period – no expenses required
• Stay at Home Benefit and Hospice Care can be paid during the Qualification Period
• Negotiated provider discounts
• International Benefit
• Restoration of Benefits
31
GLTC -ABC-EMS-10/02 TX
(07/04)
For More Information….
• Customer Service Center
Toll-Free Phone Number
1-800-498-9100
Monday through Friday: 7:30 a.m. – 5:30 p.m. CT
• Long-Term Care Web site
http://tamus.jhancock.com
(username: tamus; password: mybenefit)
32 Long-Term Care Insurance is underwritten by John Hancock Life Insurance Company, Boston, MA 02117.
GLTC -ABC-EMS-10/02 TX
(07/04)
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