Question

Please help with question 56!

56. Peter owns a partnership qualified LTC insurance policy that provides a nursing home care benefit of $100 per day. The policy also includes a home and community care benefit. Under the requirements of the Deficit Reduction Act (DRA), what is the minimum benefit payable by the policy for the home and community-care benefit? O a $100 per day b. $18,250 oc. $36,500 d. an amount equal to the maximum lifetime nursing care benefit

Answer 1

If a policy provides benefits for home and community care, these benefits must be at least equivalent to one half of one year's nursing home coverage. For instance, if a comprehensive policy contains a nursing home daily benefit of $180, the total benefits available for home and community care must be at least $32,850 ($180 times 365, divided by half, equals $32,850)

In Peter's case nursing home daily care benefit is $100, hence minimum benefit payable for the year is

=$100 x 365 days x 0.5

=$18,250