What is Long-Term Care Insurance
Long-Term Care Insurance provides coverage for elderly or chronically ill individuals who are unable to perform daily activities such as dressing, bathing or eating, or who have cognitive deficits which require them to be supervised for their own safety. These policies are often purchased decades before such coverage will be utilized as such coverage typically becomes necessary as individuals age.
In other instances, however, an individual may suffer from an unexpected illness in which they are unable to meet their self-care needs at an earlier age. Long-term care insurance is to protect an individual’s assets, fill the void of health insurance which typically covers medical expenses only and provide peace of mind so that individuals are not relying solely on family members to provide care.
Things To Know Before Filing a Long-Term Care Insurance Claim
1. The Basics of Long Term Care Insurance
You should read your insurance policy before making a claim. The following are some long-term care insurance policy basics:
A. Requirements to receive long-term care benefits
Coverage is available when an individual suffers from severe cognitive decline such as short or long-term memory loss or poor reasoning or judgment. In such instances, some policies only provide coverage if the individual requires substantial supervision.
Coverage is also available when an individual is physically unable to perform at least two activities of daily living. Each policy is different and will govern which activities of daily living qualify for benefits. Most policies set forth six activities of daily living defined as follows in some combination thereof:
- Bathing – examples include an inability to bathe safely without risking slipping or falling or an inability to wash various parts of the body.
- Grooming – examples include unable to maintain dental hygiene and nail or hair care.
- Dressing- examples include difficulty with dressing such as putting on socks or shoes or pants. It may also involve inappropriate clothing choices such as wearing pajamas in public.
- Eating – examples include difficulty using utensils to move food from the plate to the mouth (this does not typically include the inability to prepare food);
- Transferring – examples include an inability to rise up and down from a chair or get in and out of bed.
- Mobility – examples include the inability to walk without assistance, including the use of a walker or the inability to step up or down a curb.
- Toileting – inability to use the restroom without assistance or the inability to get on and off the toilet.
- Continence – examples include the inability to manage undergarments that address leakage or incontinence, catheter or colostomy bag.
B. Who may provide long-term care services
There are many types of providers of personal care services and those services may be provided in a number of different settings.
- At-home care. Some policies allow a family member to provide the care while other policies require a professional caregiver. The policy may provide the option for a family member to become a certified caregiver. There are numerous home health care agencies that have qualified individuals to provide the necessary care at home.
- Adult day care is non-residential care that provides planned social activities for individuals who require supervision during the day, perhaps, while a family member is working.
- Assisted living facilities provide housing, meals and planned social activities and offer various levels of care that are customized to the individual’s needs.
- Nursing home / Skilled Nursing Facilities provide care for those individuals that require the highest level of self-care, which oftentimes includes medical care.
C. Benefits Provided by Long Term Care Insurance
Long-term care insurance typically provides for a daily maximum rate that may range anywhere from $100.00 to $500.00 per day. Also, most policies provide for a lifetime maximum amount which is the maximum amount that an insurance company will pay during the lifetime of an individual.
D. Long-Term Care Insurance is Guaranteed Renewable
Long-term care insurance is guaranteed renewable which means it can only be cancelled if the premium has not been paid. However, before a policy can be cancelled due to non-payment of premium, the insurance company must comply with the notice provisions in the policy and those provisions must be clear and unmistakable.
Also, the insurance company may be required to provide notification of the nonpayment of premium to a third party designated by the insured. Because insureds often need benefits at a time when their cognitive skills have declined, it is ESSENTIAL that they designate someone trustworthy, and a generation younger to receive lapse notices, to ensure that the coverage does not lapse for non-payment of premiums right before the insured needs to make a claim.
E. Waiver of Premium
Most long-term care policies provide for the waiver of premium once a claim has been made and eligibility for benefits confirmed by the insurance company. This means that premiums will not be owed during the time that you or your loved one is receiving benefits under the policy. Please be sure to confirm with the insurance company that the premium is in fact waived once eligibility has been established before stopping premium payments.
2. Information Required to Submit a Long-Term Care Claim
The insurance company should provide forms and notify you of other information that is necessary to submit a claim. Such forms and information include the following:
- A Policyholder Statement in which basic information is provided about you, the basis of your claim and the care you have been receiving if any.
- An Attending Physician’s Statement in which your doctor describes why the care is needed. The doctor may also need to provide recent medical records.
- An Assessment and Care Plan. This may be handled in a number of ways depending on the insurance company. The insurance company may require that the assessment be completed by the treating physician, a health care provider at the facility or an individual selected by the insurance company to meet with you and conduct the assessment.
Once the assessment is complete, then the Care Plan will be developed which directs the level of care required for the individual. If an individual’s claim is based on cognitive deficits, then the assessment may require neuropsychological testing.
- A Provider Statement is required to demonstrate that the provider is qualified to deliver the services necessary. The provider may need to supply copies of certifications or licenses. Many policies will not permit family members to be paid to provide care. It is crucial that someone who fully understands insurance policies reads and interprets the pertinent policy terms before a claim is made.
- Authorization to Release Information. This allows the insurance company to obtain pertinent medical records related to the physical or mental condition leading to the required care. The Insurance Company will likely complete a telephone interview to review the information submitted as part of the claim.
If the claim submission process is taking way too long or the insurance company appears to be creating unnecessary and unreasonable hurdles to obtaining benefits, then you should reach out to a long-term care insurance attorney to review the situation.
3. Tactics by Insurance Companies to Deny Long-Term Care Claims
When Long-Term Care Insurance initially hit the market in the 1970s through the 2000s insurance companies offered particularly generous terms for a low premium. Ultimately insurance companies realized that they had grossly underpriced the coverage and severely underestimated their insureds’ life expectancy, and the amount of benefits that would be owed to the policyholders.
As a result, insurance companies have been trying to make up the difference by seeking the permission of individual states to drastically increase premiums, and also by engaging in aggressive claims handling. Your claim may be initially denied without the payment of any benefits or benefits may be terminated after the insurance company has paid benefits for months or even years.
Tactics used by insurance companies to deny benefits that we have encountered in lawsuits that we have handled include the following:
- failing to provide any meaningful assistance during the claims process;
- creating confusion and unreasonable obstacles through the requirement of unnecessary forms and information;
- discounting the opinions of treating physicians;
- relying on statements from employees at facilities who have inadequate information regarding the insured;
- utilizing and exaggerating surveillance footage;
- misapplying the terms of the Policy to deny coverage.
We Are Here to Help
At Kantor & Kantor, LLP, we understand how upsetting it is if you or your loved one’s claim is denied, particularly during such a vulnerable time. If you or your loved one’s claim has been denied, do not assume that the insurance company’s decision is correct. It is important to have the decision reviewed by a long-term care attorney. This applies equally to policies that have been cancelled due to non-payment of premiums.
If the premium was not paid, then please do not assume that the insurance company properly cancelled the policy and seek consultation with an attorney. Long-term care insurance policies are complex and difficult to understand. Additionally, there is a whole body of law that applies to such policies which adds to the complexity.
Please allow our caring and knowledgeable attorneys to review the details of the denial and/or the cancellation of coverage. We are here to help.