Americans are living longer than ever. That’s great news. But that doesn’t cancel the fact older individuals still will need assistance when their health eventually declines. To cover the need, many people purchase long-term care insurance to provide financial assistance in a time of need.
What is Long-Term Care Insurance?
Long-term care insurance, often called LTC insurance, covers the cost of care associated with in-home, assisted living facility (ALF) and skilled nursing care facilities. The cost associated with these three levels of care can be very expensive. LTD insurance provides a cushion against these costs.
The U.S. Department of Health and Human Services estimates that the average cost of nursing care runs over $70,000 a year. When the individual who needs nursing care can’t afford it, the costs are generally absorbed by the children, or from savings that were earmarked for their retirement, or sometimes by state assistance. LTC Insurance can protect your assets, investments, and nest egg against the crippling costs associated with long-term care whether at home, at an ALF or a nursing facility.
How Does LTC Insurance Work?
Many LTC coverage triggers when the insured no longer can two of the six covered “activities of daily living”. These “ADLs” or IADLS. The other trigger is cognitive impairment where the individual presents a danger to himself or others. Typically, dementia or Alzheimer’s will trigger coverage.
ADLs and IADLs vary in complexity. The activities of daily living (ADLs) assessment tool was developed in the 1950s and includes the essential functions that are necessary for survival. More recently, the activities of daily living scale has been expanded by Lawton-Brody to include more complex tasks, called the instrumental activities of daily living (IADLs)
Basic activities for Daily Living
Common categories of ADLs include:
- Feeding – being able to feed one’s self. Evaluated from getting food from the plate into the mouth without assistance to the other extreme of needing total help with eating
- Bathing – taking care of bodily affairs, including bathing, hair and nail care, grooming, and oral hygiene. Evaluated form independently self-bathing to needing help getting in and out of tub or shower and assistance with cleaning.
- Toileting – being able to use the bathroom properly. Evaluated from getting on and off toilet and cleaning to assistance with getting on and off toiled and cleaning.
- Continence – exercising complete bowel control to partial or full incontinence of bladder or bowels.
- Dressing – being able to choose appropriate clothing and get dressed. Evaluated from getting clothes from the closet or drawers, putting on clothes and outer garments, to partial to full need of assistance to get dressed.
- Transferring – getting around by one’s self. Moving in and out of bed, or a chair without assistance or with assistance.
- Mobility – ambulates independently even with assistive devices without assistance to need for help ambulating with or without assistive devices.
Physicians will use these criteria to evaluate whether an individual can care for himself or need help from a caregiver. It may also make a difference whether the individual is eligible for government funding for caregiving or if she would qualify for reimbursements from other sources.
Instrumental Activities for Daily Living
The instrumental ADLs are those that require more complex thinking skills, including organizational skills.
- Transportation and shopping: Ability to procure groceries, attend events, managing transportation, either via driving or by organizing other means of transport.
- Managing finances: This includes the ability to pay bills and managing financial assets.
- Shopping and meal preparation: This incldues everything required to get a meal on the table. It also covers shopping for clothing and other items required for daily life.
- Housecleaning and home maintenance: Cleaning kitchens after eating, maintaining living areas reasonably clean and tidy, and keeping up with home maintenance.
- Managing communication with others: The ability to manage telephone and mail.
- Managing medications: Ability to obtain medications and taking them as directed.
Insurance policies are different, and the conditions that activate your policy may differ from one policy to the next. Some states, such as California do a good job of regulating insurance policy content. Other states don’t. For that reason, it is important to read the fine print on your policy.
What Does the Fine Print of an LTC Insurance Policy Say?
Long-term care policies may have specific requirements for the policy to activate or specific restrictions on the policy itself.
- Not all policies will allow a family member to provide care services to the policyholder. Instead, the policyholder will need to select a professional to perform these services for them.
- Not all policies will cover expenses if the policyholder refuses to leave home. These policies will only activate if they are living in a facility.
- Some policies only reimburse expenses actually paid rather than advancing funds first.
- Some policies are pure indemnity and pay benefits so long as triggers are met.
How Do Long-Term Care Insurers Deny Claims?
Policies purchased in the late 1980s and early 1990s are the most troublesome. For one thing, assisted living communities were only just beginning to emerge. Nursing homes, on the other hand, were everywhere. These policies are often ambiguous. But in virtually all states, an ambiguous insurance company is to be construed in favor of the insured and against the insurance company. That doesn’t mean, however, that the insurance company will twist ambiguous language to deny coverage.
So how do these insurance carriers deny claims?
- Unqualified caregiver – The insurance company will not pay for costs related to a specific caregiver, usually a family member, unless they are a licensed professional.
- ALF is not a home. The insurance company will not pay for “homecare” even if the policy provides for services in the home, and the individual’s only home is now an ALF.
- No prior hospitalization – Most newer policies require that 2 of 6 ADLs be present. Older policies may require a serious medical event requiring hospitalization and transfer to a nursing home. This language is generally outlawed, however, some insurance carriers may impose hoping policyholders will go away.
- “Personal” care benefits – Some insurance carriers refuse to pay for “personal care”. This can include grocery shopping, help bathing, and more.
- Failure to make payments – In some cases, policyholders with cognitive impairments forget to make payments on their premiums. Their insurance company will deny their claim due to a policy lapse.
Has Your Long-Term Insurance Claim Been Denied?
Insurance companies offer these policies and policyholders purchase them in good faith, pay into the policy for years, and then when it comes time to cash in on that policy, they are inexplicably denied coverage.
If that story sounds familiar to you, then you are not alone. Nor do you have to fight with your insurance carrier alone. The denied insurance claim attorneys at Jonathan M. Feigenbaum, Esquire can litigate the denial on your behalf and force the insurance company to pay out on the policy that you have paid into for several decades of your life.