State RegulationsMI specificDifficulty 2/5
A Kalamazoo resident owns a reimbursement-method long-term care policy with a maximum daily benefit amount. During a covered nursing home stay, her actual daily charges exceed that maximum. Under the reimbursement method, the policy pays:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under the reimbursement method, the policy pays covered long-term care expenses up to the maximum daily benefit stated in the contract, and charges beyond the maximum are the insured's responsibility. Michigan's long-term care chapter (M.C.L. 500.3901 to 500.3955) governs how benefit amounts are defined and disclosed in policies sold in the state.
Why the other options are wrong
- A) The daily maximum caps payment; unlimited payment would defeat the policy's benefit design.
- B) Payment is not forfeited when charges exceed the limit; it is simply limited to the maximum.
- C) The policy pays expenses up to the limit, not the excess of charges over it.
Memory hook
Reimbursement method = pay actual bills up to the daily max.