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Private Sector LTC Financing Options September 10, 2004 Lois Wattman Policy & Legislative Affairs Blue Cross Blue Sh

Private Sector LTC Financing Options September 10, 2004 Lois Wattman Policy & Legislative Affairs Blue Cross Blue Shield of Minnesota. Available Options. Medicare Bare Supplement ( Medigap) M&C / MA Cost Contracts LTC Policies HSAs Insurance Coverage/Retiree Coverage.

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Private Sector LTC Financing Options September 10, 2004 Lois Wattman Policy & Legislative Affairs Blue Cross Blue Sh

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  1. Private Sector LTC Financing Options September 10, 2004 Lois Wattman Policy & Legislative Affairs Blue Cross Blue Shield of Minnesota

  2. Available Options • Medicare • Bare • Supplement ( Medigap) • M&C / MA • Cost Contracts • LTC Policies • HSAs • Insurance Coverage/Retiree Coverage

  3. Minnesota Medicare MarketSources of Insurance Coverage forNon-Institutionalized Medicare Beneficiaries • Medigap 44% • Medicare HMO 11% • Employer Retiree 22% • Medicare Bare 14% • Government Programs 9%

  4. Medicare Coverage for SNF • Part A required • 3-Day Hospital Stay required • MD Ordered • Medicare Certified Facility • Benefit 1/1/04: • Days 1-20 No Beneficiary Co-pay • Days 21-100 $109.50 Daily Co-pay • Days 100+ 100% Beneficiary Liability • 100 Day Limit in each Benefit Period

  5. Medicare Supplement / Medigap • Based on Medicare Coverage • Covers the “Gaps” in Medicare Benefits • Co-payments/Deductibles • State Regulated / MN does not conform to NAIC standardized plans

  6. Medicare SupplementSNF Coverage (MN) • Basic Policy • Days 21-100 Co-Payment Covered • Days 100+ No Coverage • Extended Basic Policy • Days 21-100 Co-Payment Covered • Days 100+ 80% Coverage for 20 Days

  7. M&C Medicare Advantage • Replaces Medicare but Basic Medicare Benefits Must be Provided • Health Plan Assumes Risk • Capitated Payment Allows More Benefit Flexibility • PFFS • PPOs

  8. M&C / MA SNF Coverage • Health Partners • No Member Co-Payment • 100 Days Each Benefit Period • No 3-Day Prior Hospital Stay Required • Medica • No Member Co-Payment • 100 Days Each Benefit Period • 3-Day Prior Hospital Stay Required

  9. Cost Contracts SNF Coverage • “Hybrid” product wrapping Medicare • No Member Co-payment • 100 Days Each Benefit Period • 3-Day Prior Hospital Stay Required

  10. Medicare Modernization Act • Greater Reliance on Medicare Advantage Plans • Dual Eligible Rx Costs Transferred to Federal Government: “Clawback” • No LTC Relief

  11. Insurance Products • Mirrors Underlying Benefit Structure • e.g. 80/20 Deductible • Cap on Days per Year • MD-Ordered

  12. Long-Term Care Policies • Confusion in Marketplace • No “Apple to Apple” Comparisons • Common Denominator is Definition of Chronically Ill • Waiting Periods Required • Underwriting Allowed • Minimal Employer Contribution • No discrimination rules

  13. HSAs • Will be Modified in the Future • Needs to be Available for Medicare Eligible Population to Contribute • Qualified Medical Expense includes LTC policy premiums and services

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