Unfortunately, as the population ages more and more long-term care insurers are denying claims for stays in Assisted Living or Managed Residential Communities. Insurance companies mispriced many long-term care insurance policies because of faulty assumptions. This included lapse rate guesses. What percentage of policyholders would start paying premiums after the first year or a few years? Insurance company actuaries guessed, and their guesses were wrong. After-all, long-term care insurance is unusual compared with most other types of insurance. Homeowners don’t buy property and casualty insurance hoping that their home burns to the ground by fire. Purchasers of long-term care insurance, on the other hand, expect to use the insurance as they age.
There may be legal recourse if you have been denied coverage for a long-term care claim in an Assisted Living or a Connecticut Managed Residential Community (MRC). In Connecticut an MRC is a facility consisting of private residential units that provides a managed group living environment, including housing and services primarily for persons age 55 and older. A managed residential community provides or makes available “core services” for its residents, who may choose to use any or all of them. The MRC is not a licensed entity under Connecticut law.
Don’t give up if your claim is denied. A class of policyholders entered into a multi-million-dollar settlement with Continental Casualty Insurance (CNA) after filing a class action suit in the United States District Court for the District of Connecticut. The policyholders alleged that CNA acted in bad faith by wrongly denying claims for stays in Connecticut MRCs where Assisted Living Services Agencies provide services to residents. According to the CNA long term care benefits class action lawsuit, CNA denied the long term care claim on the grounds that MRCs were not licensed by the state and cannot and did not provide the level of care and services required by the policy for coverage. In Connecticut,
Here Are 3 Insider Tips To Keep This From Happening to You
- Check your LTC policy for coverage in Assisted Living Facilities and Managed Residential Community (MRC)
Long-term care policies from the 1990s were often written much differently than today’s version. That’s one reason why people with older contracts — precisely the ones now trying to get benefits paid — sometimes run into trouble.
Back then, regulation of the long-term care industry was lax or non-existent and many policies are ambiguous. Assisted Living Facilities (ALF) were new, so policies generally didn’t specifically cover them. But that doesn’t mean the ALFs were excluded. Contracts provided nursing home coverage or home health care coverage. And even the definition of “home” was vague. Now that assisted living facilities have grown in popularity, they’re usually included in current long-term care policies/
- Make Sure Your Assisted Living or Medical Care Provider Is An Eligible Care Provider
If the insured person is in a nursing home or an assisted living facility, or other hybrid facility, usually that operator must prove to the long-term care insurer that it’s an “eligible care provider.”
In some cases, the policy requires that the facility have a specific license and the appropriate personnel and care. For example: Do they need to legally provide 24-hour-a-day, or continuous nursing services/care on the grounds of the facility for coverage? The answer depends on the long-term care insurance policy, what the facility provides and state laws.
But again, even if the facility is not an eligible care provider, the insured may be receiving services from a license provider that is not on premises and the long-term care insurance policy should pay for the care.
- Learn If There Are Medical Eligibility Requirements for Benefits?
The “gatekeeper provision” often appears in older long-term care policies. This wording requires that a policyholder had hospitalization confinement, a nursing home stay or both before claims would be paid. Note: Most states have outlawed these provisions for many years.
Generally, there are no across the board answers. The regulation of long-term care insurance is governed mostly by state laws. Some states, such as California, provide good protection to policy owners. Most do not.
To learn more about long-term care insurance benefits, claims, denials, and appeals contact Jonathan M. Feigenbaum, Esquire. He will provide a complimentary assessment of your claim and legal guidance on next steps.