Insurance
Long Term Care Insurance From Policy to Claim
By Financial-Shopper-Network.Com
Nov 23, 2007 - 7:28:28 AM

Unlike most insurance products, there is a very short history in which individuals have filed claims under long term insurance (LTC). Because of this reason, you should be aware of some of the typical items that will be required to file a claim. If these requirements are not met, it may be difficult to have a legitimate claim paid. Also, it is important to understand how policy benefits are paid, what triggers are necessary for care to be covered, the definitions of care (e.g. nursing home or home health care), and what health care providers may provide covered long term care.

Over the past ten years, long term care insurance has become a hot item. You see commercials on TV and ads in newspapers and magazines that get people interested enough to call an insurance agent. Many of those considered to be middle age or senior citizens have bought some type of long term care insurance. However, what does this really mean for those that purchase the insurance product, regarding their need for long term care? You still need to know how this policy works.

A long term care insurance policy will define what constitutes a legitimate claim. Additionally, it may contain definitions that are not limited to the following types of services: nursing home, home health care, respite care, adult day care and more. Most long term care insurance policies are specific concerning (1) what services are covered, (2) in what type of settings the care must be rendered; (3) what medical limitations must the insured suffer from to receive benefits; (4) and who may provide care. Under most long term care insurance policies, you must satisfy all four of above-mentioned requirements.

If you already own a long term care insurance (LTC) policy, it is important to understand the definition, benefit, and eligibility sections of your policy. This could be a reason that many people, including insurance agents, do not fully understand long term care insurance policies. As mentioned earlier, the definition section of your policy lists what it considers to be a nursing home, an assisted living facility, or where home health can occur. In regards to care received in a facility not limited to a nursing home or an assisted living facility, a long term care insurance policy may impose staffing requirements on facilities that are covered by the policy. E.g., the facility must be under the 24 hour supervision of a physician or RN; a RN or LPN has to be in the building at all times. In addition, the eligibility section of the policy might require the facility to help the insured with at least two activities of daily living (e.g., ambulation, transfer, eating, continence (toileting), dressing, or bathing) or aide and supervise a policyholder with a cognitive impairment. A similar requirement for home health care, in regards to activities of daily living or cognitive impairment, is imposed by most long term insurance policies. Also, most long term care insurance policies that contain home health care benefits will define what type of caregivers (e.g., home health aides, LPNs, physical therapist, etc.) are covered by the policy in its definition section. Many policies also will require home health care aides to be licensed or certified by the state in which services are rendered, except in states where this is not a requirement.

The benefit section of a long term care insurance policy is a favorite of most policyholders. It explains how benefits under the policy will be paid. The policy will show the daily maximum benefit of each covered expense on its schedule page. If you choose to buy a long term care insurance policy that increases the daily maximum benefit by a certain percent (simple or compound at 5% annually, for example on the policy’s anniversary date) or has a future purchase option, you will need to keep track of the new daily maximum benefit. Your insurance policy may contain how to calculate the daily maximum benefit, if you have added an inflation rider to the policy, or the insurance company may send you an updated schedule page upon the purchase of additional benefits that are available for those that exercise the future purchase option. Additionally, many contracts pay actual expenses for services rendered up to the daily maximum benefit that is shown in the schedule page. Other long term care insurance policies pay the daily maximum benefit, regardless of what the facility or home health care agency charges for services that are covered by the policy. However, a federally qualified long term care insurance policy will always pay actual expenses up to the daily maximum benefit. Furthermore, some policies coordinate with Medicare and do not pay for benefits that are covered by the governmental program. If you choose to add an elimination period to your policy, these dates of service will not payable for covered services, and depending on the policy language, days that Medicare covers without co-insurance may not be counted towards the elimination period.

If you believe that you will require the need for long term care services in the near future, it is important to communicate with your insurance company. A representative of the insurance company should be able to explain the following policy requirements for a covered claim: services covered (e.g., assisted living facility or respite care), settings covered (e.g., nursing home or care at home), the function limitations (2 or more ADLs or cognitive impairment) and the definition of an eligible provider (e.g., home health care providers or staffing requirements in a facility). In addition, some insurance company will provide you with a list of Approved Providers (e.g., nursing homes or home health care) of care in your area. Still, this does not mean you will qualify for policy benefits because you use an Approved Provider. You must usually satisfy one of the required medical limitations of your policy to be considered for long term care benefits, whether it be ADLs or cognitive impairment. Some long term care insurance policies require pre-approval for long term care services (or receive reduced benefits for a period of time) and or the use of a care coordinator to assess your need for long term care and to help develop a plan that is designed to prevent further medical deterioration or improve the medical condition that has caused your need for long term care.

Unfortunately, some illnesses or injuries require immediate long term care services in a skilled nursing facility. If this happens, it is a good idea for your Power of Attorney to contact your long term care insurance company. Your personal representative will be made aware of the proper paperwork needed to file a claim by speaking to a representative of the insurance company. Most insurance companies require the same information from policyholders that seek pre-approval or are already receiving long term care services.

In most cases, an insurance company will require a claim form that must be signed by the policyholder or his or her Power of Attorney, the attending physician who saw the policyholder, diagnosed the illness and injury, has provided an estimated length of time that long term care services will be needed to recover or maintain the illness and injury causing the need for care, his or her recommendation for the type of care needed (e.g., nursing home or home health care) and the frequency of long term care services required (e.g., 24 hour skilled nursing care or 4 hours of home health care), and the facility or home health care provider. Additionally, most insurance companies require itemized bills, daily progress notes, home health care or facility licenses, or a facility assessment or MDS (Long Term Care Minimum Data Set) or Plan of Care from your home health care provider. You can reduce the length of time for a claim decision to be made by providing this information to your insurance company in timely manner.