Receiving Benefits for Long-Term Care Policies A “Full-Time Job”
“The problem with this picture is that there is no way an elderly person who needs the help of long-term care could navigate this complicated process and spend the required time to get paid. Long-term care is supposed to lessen the burden put on family members and loved
ones yet increasingly it is adding an even greater one. Sadly, I hear an even worse version of this story every day. I hear from families who have spent six, seven, eight weeks filing a claim and working on getting the benefits in place just to be wrongfully denied the coverage,” says Frank N. Darras, America’s top insurance lawyer.
One of the challenges with getting long-term care benefits is that many insurers have exited the market due to under-pricing and over selling the policies initially and now they are getting killed in the claim department. Some companies have hired third-party administrators to deal with claims that have brought more restrictive interpretations of what’s covered and what’s not. In addition, many policyholders struggle with filing a claim correctly or committing fatal initial claim mistakes, causing the process to be delayed or denied completely.
“The truth is that long-standing, reputable insurers still manage to pay claims without issue. Last year alone an estimated 264,000 people received long-term care benefits and $6.6 billion was paid out. While wrongful denials and lengthy claims delays are becoming more common, there are ways that policyholders (or whoever is filing on their behalf) can help prevent prevent confusion or ambiguity from seeping in and get their claims paid faster,” says Darras.
Darras hits on the following common misunderstandings:
1. Waiting Periods: Unlike most insurance policies, long-term care policies have waiting periods before benefits kick in, usually 30, 60, or 90 days. Any cost accrued before the end of the waiting period is the responsibility of the policyholder. One important thing to note is that only the days the policyholder gets care counts toward the waiting period so if the individual is getting care a few times a week then the waiting period could be much longer than 30 days.
2. Eligibility: To qualify for benefits, policyholders generally need “substantial assistance” for at least 90 days. “Substantial assistance” usually means they are suffering from dementia or cognitive problems; or they can’t perform two basic daily activities, like bathing, eating, toileting, transferring, or getting dressed. Insurance companies comb through the medical records to find holes in the doctor’s chart notes to minimize or normalize the alleged problems to capitalize on closing the claim. Sketchy or incomplete caregiver’s notes, a poorly written or non-existent plan of care prevents payment.
3. Licensed Caregivers and Assisted Living: While many people would prefer a relative take care of them, most policies require that the caregiver be licensed in order to receive benefits. This is not the case in California where the law bans insurers from imposing this. Similarly, assisted living facilities are not always covered either since they weren’t common when the first long-term care policies were written. Usually only a “skilled nursing facility” is covered, restricting where a policyholder can live. Some insurers are allowing assisted living facilities as long as they are licensed by the state, provide care by a licensed doctor and have 24-hour nursing available. Make sure to ask specific questions about care options.
4. Alternate Plan of Care: While most people assume these provisions will allow flexibility, it is more of a consideration than a sure bet. The insurer makes the final decision and can deny these requests if they so desire.
5. Documentation: This is one of most common trouble areas for individuals filing claims. If the care provider does not document everything correctly, the insurance company will not pay and could even deny the entire claim. If the documentation seems excessive and is resulting in reoccurring failures to pay, it might be time to hire a lawyer.
“Receiving long-term care benefits is a tricky process and the sad truth is that insurance companies don’t always want to make it easy on you. Even a slight error or misunderstanding can lead to your claim being denied. It’s always best to ask lots of questions and seek the advice of a trusted insurance lawyer familiar with long-term care when you are struggling. Being proactive will bring peace of mind and comfort, along with a timely benefit check,” says Darras.