When a loved one needs assistance at home to continue living independently or needs to move into a senior living facility, long-term care insurance (LTCI) can help make that care more affordable. As soon as a senior begins requiring an increased level of care, it is important to gather documentation regarding their condition and file a claim as soon as possible.
Unfortunately, accessing these benefits can be challenging, especially at a time when families are already feeling overwhelmed. Family members may not even know if their loved ones have LTCI coverage. Start by looking for any records of premium payments and check with the insurance company to see if the policy is still in-force. If it is, the next step is to clarify all of the specifics of the policy.
It can be beneficial to have another person involved who can help you navigate this process. Some care providers will offer to call the insurance company for or with you to help iron out coverage and payment details. For instance, if you are looking to hire a home care company, ask if they offer this as part of their services. A signed authorization form is required to give the agency permission to speak with the insurance company on your family’s behalf.
In preparation for contacting the insurance company, gather the following information about the policy before you submit your first claim. Ideally, the policyholder was aware of these terms at the time of purchase, but they may not always be able to help you through this process.
Things to Know Before Filing a Long-Term Care Insurance Claim
- How much is the benefit? LTC policies are written in a daily benefit amount. This benefit can be a preset daily limit until a lifetime maximum is reached or a preset cash amount for each day you require care, whether you receive services on those days or not. These stipulations vary by policy.
- How long will the benefit last? The length of the benefit could be three years, five years, or even the remainder of the policyholder’s lifetime. This is important to know for planning purposes. If the policyholder has just been diagnosed with mild Alzheimer’s and the benefit only lasts three years, it may be wise to let some time pass before filing a claim. Individuals with dementia can live for many years with the disease, and as their condition progresses, they require more intensive care that can be very expensive.
- What are the benefit triggers? Before a policyholder can begin receiving benefits, he or she must meet certain conditions or “benefit triggers.” Most policies require a policyholder to need assistance with at least two activities of daily living (ADLs). Each company and individual policy handles these criteria differently, especially for policyholders with cognitive impairment.
- What kind of care does the policy cover? Does the policy cover in-home care, and what level of services qualify? If care is provided in a facility, like skilled nursing or assisted living, is the specific facility an eligible care provider? Some policies will cover home modifications or even pay certain family members to provide care for the policyholder. There are many levels and types of elder care available, so it is crucial to know which of those included in a senior’s care plan are eligible for coverage.
- Is there a waiver of premium? Most policies contain this clause. Once a claim is filed and approved, premiums are waived and no longer have to be paid. Premiums typically increase every year and can be very expensive, so be sure to check if this applies.
- Is there an elimination period? Like a deductible on health insurance, this is usually a period of time (instead of a set monetary amount) that care costs will have to be paid for out of pocket before coverage kicks in. Some plans have a zero-day elimination period so benefits can begin immediately, but others may have a 60-day, 90-day, or even 120-day requirement. If a policy has a longer elimination period, a considerable sum of money may still have to be paid out of pocket to begin coverage. According to longtermcare.gov, “Some policies specify that in order to satisfy an elimination period, the policyholder must receive paid care or pay for services out of pocket for the duration of said period.”
- Are there coverage exclusions? Many policies will not cover care needs that result from drug and alcohol abuse, mental disorders or self-inflicted injuries. Make sure your loved one’s health conditions do not prevent them from receiving benefits.
- Is there a death benefit? A death benefit is a lump-sum payment to a policyholder’s chosen beneficiary. Combination policies with death benefits have only become popular in recent years, so if a policy was purchased some time ago, it probably does not have this feature. This means that if the policy is not used, the benefit is lost. Medicare does not cover the costs of long-term care, so it is important to take advantage of LTCI benefits if they are available.
Long-Term Care Insurance Claim Documents
Once all of the above questions have been answered, you and your family can make an informed decision about care options. When you are ready to file a claim for long-term care benefits, you will need to obtain and fill out an initial claim packet.
Each company’s insurance claim forms will be different. Some insurance companies also make their forms available online. Some of these components may be combined or have different names, but a claim packet will typically include the following items.
- Policyholder statement: Also known as a claimant’s statement, individual statement, insured’s statement or care support history, this set of forms will require basic information about the policyholder (name, address, phone number, date of birth, policy number, etc.). It will also ask for explanations regarding the reasons for submitting the claim, which activities of daily living help is needed with, and how long assistance will be required. This component usually includes sections related to hospitalization and care history as well. The policyholder (or their legal representative) must sign this multi-page statement.
- Attending physician statement: This form is completed by the policyholder’s primary care physician (or the doctor at their long-term care facility) and verifies that the care they require is medically necessary. The physician may need to attach test results, office notes, medical records, and other supporting documentation to this statement.
- Nursing assessment and plan of care: Most insurance companies will not approve a claim without a nursing assessment and/or a prescribed plan of care. Sometimes these components will be included in the physician’s statement mentioned above. Your care provider should have a nurse on staff who can conduct and write up this initial assessment, which will include vital sign measurements, demographic information and medical history. The nurse will also complete the plan of care, which describes the type of care required in detail. A physician, licensed practical nurse (LPN), or social worker may have to sign to certify this information is accurate.
- Provider statement: If the policyholder is currently receiving care services, each care provider (skilled nursing facility, home care agency, etc.) will need to complete and sign these forms to verify that it is equipped to provide services detailed in the plan of care. Providers will also need to submit proof of proper licensure, certification, etc.
- Authorization to release information: This form ensures compliance with the Health Insurance Portability and Accountability Act (HIPAA) and permits the insurance company to collect health care documentation in order to process the policyholder’s claim. The policyholder or their legal representative must sign this form. If someone is signing this release on the policyholder’s behalf, a copy of their POA or guardianship documentation must be included.
Once the initial claim packet has been received by the insurance company, a care coordinator or employee with their claims department will typically call the policyholder or their legal representative for a telephone interview about the information that was provided. From there, it will often take 30 to 45 business days for a complete claim to be approved or denied. If the company needs additional information or is unable to reach a decision, a representative should contact you.
Managing long-term care insurance claims is not easy. Knowing what benefits are available and finding an informed care provider who can maximize that coverage will help your family choose the best plan of care.
Lisa Vogel is the owner and founder of The Lisa Vogel Agency, an in-home care provider based in Stevenson, Maryland.