1. My parents have a long term care policy. What kind of insurance benefits are they entitled to?
Generally, long term care insurance provides benefits to pay for care when one is no longer able to perform “activities of daily living” or has a “severe” cognitive impairment. The type of benefits provided depends upon the type of insurance policy that has been purchased. Generally, there are two types of coverage: “Facility Care Policies” and “Home Health Care Policies.” More recent policies will provide benefits for both “facility care” and “home health care” and they are often called “Comprehensive Long Term Care Policies.’
A Facility Care Policy will pay for room and board in an eligible facility provided that the insured is unable to perform a certain number of “activities of daily living.” Or benefits may be provided if they suffer from a “severe” cognitive impairment. Often a facility may agree to bill the insurance company directly and this reduces the amount that one will have to pay out of pocket.
A Home Health Care Policy will reimburse an insured who pays for an eligible home health care provider who provides for care in the insured’s “home.” Again, to obtain benefits, the insured must be unable to perform a certain number of “Activities of Daily Living” or have a “severe” cognitive impairment.
In summary, there are two “triggers” that must be satisfied to receive benefits. An insured must have: (1) either a physical or cognitive impairment and (2) receive care from an “eligible provider.”
2. What are “Activities of Daily Living” and why are they important?
To be entitled to benefits for a physical impairment, one must be unable to perform “Activities of Daily Living,” or “ADL’s” without either “hands on” or “stand-by” assistance. “Stand-by” assistance is usually defined as within an “arm’s length.”
Activities of Daily Living usually have the same definition in most policies. This is due to the fact that many states (including California) have statutes that mandate a uniform definition for these terms. Customary definitions of “ADL’s” are:
- Feeding yourself by getting food into your body from a receptacle (such as a plate, cup, or table) or by a feeding tube or intravenously.
- Putting on and taking off all items of clothing and any necessary braces, fasteners, or artificial limbs.
- Washing yourself by sponge bath; or in either a tub or shower, including the task of getting in or out of the tub or shower.
- Getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene.
- Moving into or out of a bed, chair, or wheelchair.
- The ability to maintain control of bowel and bladder function; or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene, including caring for a catheter or colostomy bag.
Some LTC policies also include “Ambulating” as an Activity of Daily Living. This is often defined as:
Ambulating. Which shall mean walking or moving around inside or outside the home regardless of the use of a cane, crutches, or braces.
Usually, one will be eligible for benefits under a Policy if they are unable to perform 2 or more Activities of Daily Living without “hands on” or “stand by” assistance. Please note that being unable to cook a meal or self-administer medication are not considered “Activities of Daily Living.”
3. What is “cognitive impairment” and how do I prove this?
One may also qualify for benefits under a long term care policy if they have a “severe cognitive impairment” which requires “substantial supervision” to protect either the insured or others from threats to health or safety. Some policies require that a “severe” cognitive impairment be proved with objective testing. The objective testing may be formal neuropsychic testing which may be more sensitive than simple testing administered by either the insurance carrier or a neurologist.
4. The forms from the insurance company seem so simple. Is there anything I should be careful of?
Yes. The forms may not be tailored to the requirements of your specific policy. Do not feel constrained by the boxes on the forms for your answers. For example, if the form does not inquire into the need for “stand by assistance,” annotate the form to provide that information. An attending physician may be required to complete one or more forms. It is prudent to review the requirements of the Policy and to discuss the completion of the form with the insured’s physician prior to submission. If you are a family member, you may be required to provide the physician with information that may be necessary for he or she to understand the gravity of the insured’s condition.
5. What is “Facility Care” and what type of benefits are available?
An “eligible facility” is defined by the policy. An insured is entitled to benefits to cover some amount charged by the facility for room and board. Older policies often limited an “eligible facility” to a Nursing Home. Often the policy might define a “Nursing Home” as a facility which is “appropriately licensed,” staffed by a nurse and one which keeps daily notes regarding its residents. Note that “appropriately licensed” does not necessarily mean that the facility has to be licensed as a “Skilled Nursing Facility.” However, many insurers may take that position. Newer policies may include an Assisted Living Facility or Memory Care as eligible facilities. Benefits for an Assisted Living Facility may also be less than that provided for a Nursing Home.
6. What is Home Health Care and what type of benefits are available?
Home Health Care benefits reimburse the insured for payments that are made to a caregiver who provides “hands on” or “stand by assistance” to an insured. If the insured’s condition qualifies him or her for benefits, the policy will also provide benefits for “personal care” rendered by the caregiver. Personal care may include light housekeeping, assistance with errands, laundry, meal preparation, etc. Please note that personal care services are not compensated unless the insured requires care to perform Activities of Daily Living or substantial supervision for severe cognitive impairment.
7. When can we start receiving benefits?
Policies usually require that one satisfy an “Elimination Period” before they are eligible for benefits. An “Elimination Period” is the time period in which one must pay for their own care or facility care before long term care benefits will be provided. The time period is specified in the Policy and is usually somewhere between 30 to 180 days.
Often, a Home Health Care Policy will provide that care received one day a week will satisfy an entire 7 day period. If this is the case, an insured can pay for care for one day during a week and it will count as 7 days toward satisfaction of the Elimination Period. This is one way to satisfy the Elimination Period without paying for care 7 days a week.
Once the Elimination Period has been satisfied, there is usually no need to satisfy another Elimination Period if the insured needs to transfer to facility care.
8. The facility told me that they have other residents who are receiving benefits from the same insurance company. Does this mean that my claim will be paid?
The short answer to this is “no.” We often receive inquiries from families who have been induced to place their family member in a facility based on the promise that the facility will get the claim paid. Every claim is different and one’s entitlement to benefits depends on the terms of the policy that was purchased. One must consult their policy to determine their rights.
9. What do I have to submit to get the claim paid?
The insurance company will provide you with the forms that are necessary to start a claim. We recommend that the insured’s physician be consulted in advance of submitting the claim. Ideally, the physician’s notes should document the decline in the insured’s condition—either physically or cognitively. The physician should also express his or her opinion as to whether the insured requires care. Finally, the physician should express the type of care that they recommend.
Once a claim has been started, the physician may be asked to complete a form regarding the insured’s ability to perform Activities of Daily Living. In the alternative, the physician may be asked to certify whether the insured has a “serious” cognitive impairment that may require “substantial supervision” to protect either the insured or others from threats to health or safety. Physicians can render brief testing in their offices to evaluate cognitive impairment. However, this type of testing may not capture subtle deficiencies that can cause cognitive impairment. It may be necessary to obtain formal neuropsychic testing.
10. What is an “Alternate Plan of Care” and can I insist on being paid under this provision?
Policies that were sold in the 1990s often contained a feature, or Rider which provided an “Alternate Plan of Care.” We have been told by some insurance agents that they were encouraged to market the policies with this feature as providing additional benefits. For example, we have been told that agents marketed facility care policies without coverage for home health care because the insurance company would provide less expensive care in one’s home under the “Alternate Plan of Care” provision. Unfortunately, this has not turned out to be the case.
The “Alternate Plan of Care” provision in a policy states that the insurance company may pay for different types of care, but only if it is “agreed to” by the insurance company, the insured, and the insured’s doctor. In our experience, insurance companies will not agree to an “Alternate Plan of Care” in one’s home to avoid facility care. Rather, they have interpreted this provision to provide for accommodation equipment such as handrails or ramps to keep an insured in their home to avoid facility care.
11. Why are facility assessments so important to the claim?
Care facilities are usually required by law to provide an assessment of a new resident regarding their needs for care. The facilities usually rate a resident’s ability to perform the same Activities of Daily Living that are listed in a long term care policy. They also may rate a resident’s cognitive impairment. Often, the level of care provided by a facility will depend upon the degree of impairment stated in the assessments. The cost of care will increase if the insured/resident requires a higher level of care. In addition to an initial assessment, a facility may be required to perform quarterly assessments.
As a cost-saving measure, there may be a temptation to assess the insured/resident as requiring a lower level of care than that actually required. However, the insurance companies will ask for these assessments and use them to support their position that a higher level of care is actually not required. Therefore, we encourage our clients to accept an honest appraisal of their care needs, even if it means that more expensive care is required.
12. The insurance company keeps asking for the same information repeatedly.
This is perhaps the most frequent complaint we hear from our new clients. They have provided the same information over and over and the insurance company denies receiving the necessary information. With the exception of confirming telephone conversations, we encourage our clients to communicate only in writing with the insurance company. If there is a telephone conversation, one should keep a log of conversations, noting to whom they spoke (with first and last names), the date and the subject of the conversation. If possible, fax information to the insurance company with proof that the fax was received. After a day or two, call the claim representative after the submission and confirm receipt.
13. What is an “Assessment?” Do we have to attend?
Despite the submission of the attending physician’s certification of the need for care, insurance companies often require that the insured to undergo an “assessment” by a nurse chosen by the insurance company. The nurse will come to the insured’s home and “assess” the need for either physical or cognitive care. He or she will have the insured demonstrate their inability to perform Activities of Daily Living. Or the nurse may administer simple cognitive testing to determine if there is a need for substantial supervision.
Sometimes, an insured may resist an assessment arranged by the insurance company. However, the insurance companies often have the right to insist on this type of proof and an insured’s refusal to participate in the assessment may be grounds for denial of a claim.
We recommend that a family member or trusted caregiver participate in the assessment. The insured may not like to admit that they actually need the help that is being provided. The nurse may also ask leading questions such as “Now, you can take a shower without any help, right?” The presence of a family member may deter the use of such leading questions and will ensure that the nurse is provided with truthful information.
14. What is a Plan of Care? How do I get a Plan of Care?
The insurance company has the right to request and receive a “plan of care” which details the amount of care that is necessary. This may be provided by either the nurse assessor or the insured’s physician. The “plan of care” specifies the level of care that is required. For example, a plan of care may specify that the insured receive home health care 7 days a week, for 8 hours a day. Or a plan of care may specify that the insured be moved to a facility to receive “substantial supervision.” If the insurance company advises you that it needs a plan of care, you should inquire if there is a form that can be completed by the insured’s physician. Or, if the insurance company will conduct an assessment of the insured.
15. Can I or other family members be compensated for the care I provide for my parents?
Usually, long term care policies contain a provision defining an “eligible caregiver.” These provisions expressly state that a family member is not an eligible caregiver. The policy may define a family member as a mother, father, sister, child, etc. The policy provision will prevail.
However, we have also seen some policies which will permit care by a family member. The policy should be reviewed before substantial time is spent for caregiving by a family member since ultimately they may not be compensated for their time.
16. Who is an eligible care provider for Home Health Care?
The policies often contain very different definitions for an eligible home health care provider. Some policies may require that the caregiver be “licensed.” Other policies may require that the caregiver be an employee of a Home Health Care Agency. The policy requirements of an eligible care giver should be reviewed and determined before the caregiver is hired. It is understandably difficult to terminate a caregiver that the insured has become attached to because they are not an “eligible caregiver” under the terms of a policy.
17. What are “Daily Notes?” Does my care provider have to fill them out?
Once care has been established, the insurance company may ask for “daily notes” from the caregiver, establishing the type of care being provided. Often, the requirement of “daily notes” is not specified in long term care policies. Nonetheless, it is an acceptable way of proving that necessary care has been provided.
If your caregiver is from an agency, it is possible that the agency will have forms for the caregiver to complete, reporting on the care provided and the amount of care time on a daily basis. Note that certain “Activities of Daily Living” i.e., showering, do not need to be performed every day. However, the caregiver should report on the type of care provided, including “personal care,” such as meal preparation, medication management. This helps to demonstrate the level of required care.
18. Once my claim is approved do I have to keep submitting documents to stay approved?
In our experience, the initial approval of the claim is the more difficult part of the claim process. Once the claim is approved, the insurance company has the right to insist on “re-certification” every year or six month period. If the insured is in a facility, this can be accomplished by providing a copy of the periodic assessments conducted by the facility. If the insured is receiving home health care, the insurance company may insist on another nurse assessment. Often, they may agree that the assessment may be conducted over the phone. However, as with the initial assessment, a family member or trusted caregiver should be part of the phone call or home visit to ensure that accurate information regarding the insured’s abilities is being provided.
19. How long will the insurance company pay the claim?
Provided that the insured continues to meet eligibility requirements, the insurance company will continue to pay benefits until the policy “maximum” is satisfied. The “maximum” amount that the policy provides is usually stated as a length of time or a dollar amount. If the maximum benefit is stated as a length of time, the family should consider when it will start a claim. For example, it may not be in the insured’s best interests to start a claim if they are only receiving care one day a week. To maximize the benefits under a “period of time policy,” the claim should be started when the insured is receiving substantial care.
20. The insurance company denied the claim. What do I do now?
The insurance company may offer you the opportunity to “appeal” the decision. This may or may not be necessary depending upon the type of policy purchased. We encourage insureds and their families to immediately consult an attorney experienced in litigating long term care policies. The first step is to ensure that you have a current copy of the long term care policy. It may have been amended over time and the insured’s rights are dictated by the policy terms.