If you or your parents have a long-term care insurance policy, when can this insurance be used? How do you access the benefits?
There are five steps to receiving long-term care (LTC) insurance benefits:
1) The policy holder triggers benefits. The policy holder becomes eligible to make a claim when he either:
- Can no longer independently perform two of the six basic “activities of daily living” (ADLs): bathing, continence, dressing, eating, toileting, and transferring in and out of beds and chairs, Or
- Needs supervision due to severe cognitive impairments with memory, orientation and reasoning. This would be a disease such as Alzheimer’s.
Long term care insurance does not cover medical expenses such as doctor visits, hospital stays, and medical procedures.
When you believe you or your loved one has met the requirements to make a claim, call the 1-800 number listed on the insurance policy documents to speak with the LTC insurance carrier’s Claims Department. Insurers’ Claims Departments are staffed by specialists who can explain the policy’s coverage and help initiate your claim. The specialists will send you claim forms to be completed. A physician will need to certify the policy holder has met one of the two triggers. Many carriers require care to be provided by a licensed agency rather than family members and private hires.
2) The insurance carrier determines the policy holder’s eligibility. The LTC insurance company reviews all the paperwork to verify the insured meets her policy’s requirements to start receiving benefits. You will receive the carrier’s decision in writing.
If a claim is denied, it can be appealed. A common reason for denial is the policy holder has lost the ability to perform only one ADL vs. at least two. Denials also occur when the required reporters for the claim (the physician, the family, the policy holder) give conflicting information about the policy holder’s need for long-term care.
3) The policy holder pays 100 percent of his care during the “elimination period.” Also called a “waiting period,” most policies require you to pay for 90 or 100 days of care out-of-pocket before benefits commence.
4) Reimbursements are processed. The policy holders needs to submit information from the caregiver’s bills to the insurance carrier. The company’s Claims Department specialists can help determine which caregiving services are covered by the LTC policy and assist with completing the claims forms. Alternatively, many caregiving agencies submit claims on their clients’ behalf. Once submitted, reimbursement checks start to arrive within a few weeks. Many carriers are beginning to direct deposit reimbursements into the policy holder’s bank account.
5) The insurance carrier conducts audits and reviews. As the claim progresses, the insurer will periodically review the claim to verify the policy holder is still eligible to receive benefits. The reviews happen less frequently with people who have diseases from which they will not recover, such as dementia, than with people who have conditions from which they may recover, such as a stroke. LTC insurance carriers conduct audits and reviews to verify the policy holder is receiving proper care for her condition and to prevent fraud.
It is important to save all caregiving bills. You may be required to resubmit them to the carrier.
Sometimes family members discover a loved one’s long-term care policy after caregiving services have already begun. Frequently, claims can be made retroactively, usually up to 12 months back, provided you have the required documentation.
Other times, family members find a lapsed policy. Often the policy can be reinstated if you can demonstrate the policy holder missed premium payments due to cognitive impairment. Claims can even be made after the policy holder’s death.
If you unearth a lost or forgotten policy, call the insurance carrier.
With people living longer and needing more care as they age, LTC insurance can help preserve an individual’s assets by paying for long-term caregiving services. Knowing when and how to make a claim will help you to make the best use of this insurance.
This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice. Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate. The names of the individuals in this article have been changed to protect their privacy.
