Long Term Care Insurance – A Primer

By Ryan Broedlin, Esq.

A substantial portion of the elder community will require long term care services, such as home health aides, assisted living or skilled nursing.  As these services can be quite expensive, many people purchase long term care insurance (LTCI) to help cover, or at least defray, the costs.  Just like any insurance, however, the LTCI claims process can be difficult, confusing, and time-consuming, making policy benefits difficult to access.  The attorneys of The Murray Firm have successfully assisted clients in receiving benefits under LTCI policies issued by numerous different insurance carriers.  Based on our experience with those claims, we have developed some key insights for how to handle the claims process.

First, it is incredibly important to have a thorough understanding of what your policy does and does not cover, what it means to be eligible for coverage, and how to initiate a claim, including any early notice requirements.  These policies are often lengthy and complex, so here are some key provisions to look for in your policy:

• Covered Benefits – Have an understanding of whether your policy covers home health services, assisted living facility services, and/or skilled nursing service, among others

• Benefit Limits – This is the amount of money the policy will contribute toward covered long term care services.  It is typically expressed as a maximum dollar amount per day or month.

• Benefit Period – This is the length of time for which the policy will contribute toward covered long term care services.  It can be a specific number of days/years or benefits can end when a maximum dollar amount is reached.

• Medical Eligibility – This is a description of the medical conditions necessary to be deemed eligible to receive benefits under the policy.  Typically, you must either:
  • Have a severe cognitive impairment; or
  • Require assistance with at least two (2) activities of daily living, such as eating, bathing, dressing, toileting, continence or transferring.

• Elimination or Eligibility Period – Many LTCI policies require that you actually be receiving long term care services for a specific number of days or months before the policy will pay benefits. 90 days is very common.  It is important to be aware of such a period as LTCI payments will not be available to cover long term care costs during that time.

• Waiver of Premium – For many LTCI policies, you will no longer have to pay premiums once you have satisfied the elimination period and are receiving benefit payments.

• Indemnity or Reimbursement – Some LTCI policies require you to be actually paying for long term care services out-of-pocket prior to being deemed eligible for benefits – these are referred to as “Reimbursement” policies.  Others – called “Indemnity” policies – do not have this requirement and you can begin receiving benefit payments based on medical eligibility alone.

               

Second, submitting a “clean” claim can eliminate a substantial amount of back-and-forth with the insurance company, as well as a few headaches.  A “clean” claim is one that includes all information and documentation necessary for the insurance company to perform a full review of your claim.  Typically, this will included completed claims forms, HIPAA authorizations, medical records to show medical eligibility, and invoices from your long term care providers.  Additionally, if you are submitting the claim on behalf of a family member or friend, you will have to provide documentation of your authority to do so, such as a valid Power of Attorney.  By submitting all of these documents together, you reduce the amount information the claims examiner will have to spend time requesting – either from you or from third parties – and therefore help speed up the claim process.

Third, follow-up is everything.  Do not rely on an insurance company representative to move your claim quickly to completion.  Our standard practice is to follow-up on claims regularly (and politely), including an immediate check-in within 72 hours of submission of the claim.  Most importantly, this allows us to identify that the claim has been received, learn the insurance company’s next steps, and discover any additional documentation or information that the insurance company may require.  WE also make sure to follow-up with our clients’ long term care providers to be sure they are being responsive to any requests made by the insurance company.
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If you have a LTCI policy and have any questions, we offer a free one-hour consultation for clients in New Jersey, New York, and Pennsylvania to review your policy with you, answer questions you may have, and to help with a long term care plan utilizes your insurance benefits.  Please reach out to us today to schedule an appointment at 908.204.3477.