3 Steps to Take Before Filing a Long-Term-Care Insurance Claim
To avoid a claim denial, make sure you understand what the policy covers.
Buyers of long-term-care insurance expect that their policies will pay off if they no longer can live on their own. And most claims are paid: Insurance companies forked over $6.6 billion in benefits in 2012 to a record 264,000 individuals, according to the American Association for Long-Term Care Insurance.
But consumer advocates and lawyers say many seniors—and their families—spend months, and sometimes years, struggling to persuade insurers to pay the bills. To help avoid denials, it's essential to understand what your policy covers and the traps that can block a claim from being paid.
Determine when the clock starts ticking. Policies typically include a deductible, known as an elimination period, of 20, 60 or 90 days. But insurers differ on how they count those days.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Some policies use "calendar days"—paying for services 60 days after you file a claim or after the doctor or company certifies that you have a covered disability. But other plans focus on "service days," counting only the days that you pay for a home health aide, for example, during the waiting period. If the caregiver visits three days a week, the insurer only counts those visits toward the 60-day waiting period—and benefits won't kick in for 20 weeks. In the meantime, the family has to pick up the tab. Some policies will waive the elimination period for home health care, says John Ryan, a broker in Greenwood Village, Colo., who specializes in long-term care.
Regardless of the particulars of the elimination period, Ryan says it's essential to file a claim at the first sign of a problem. The insurance company will need to review clinical records and perhaps even send a nurse or social worker to visit a client before it approves a claim. "All this takes time," Ryan says.
Pass the disability test. Claimants typically must prove that they are "cognitively impaired" or need help performing two or three "activities of daily living," such as bathing or eating. "A licensed health care provider should confirm in writing" all of the details of the patient's disabilities, says Calvin Thur, a lawyer in Phoenix, who represents claimants in insurance cases. He also recommends that a physician "in essence write a prescription" for home health care seven days a week or nursing-home care for life. When you call the insurer to file a claim, make it clear that you have documentation from a physician.
The physician's report should reflect the type of care required in the policy. For example, Thur says, "If a policy requires that the person needs help getting in and out of the shower, the doctor should write that." The insurer will verify the need for care, either by phone or in person. In the case of a visit, an advocate "should be present to explain the problem," says Glenn Kantor, an insurance lawyer in Northridge, Cal. "The patient should never be left alone."
And the insurer should be told in writing to call the patient's advocate and not the client for any information, Kantor says. Someone with Alzheimer's could have moments of lucidity, for example, and older patients often don't want to admit how helpless they are.
Check the caregiver requirements. Before you hire a caregiver, study the policy's fine print on the type of aide the company will cover. Many policies will only pay for licensed caregivers who work for an agency, even though many patients simply require the help
of a personal care aide—someone to prepare meals and help with bathing. You don't want to discover too late that the aide you hired doesn't qualify. These requirements also cover aides during the elimination period—even though you are paying for the care yourself.
Not all states require such licenses. In Arizona, Thur says, there is no license requirement for home health aides. He says that when the home health providers call the insurers to remind them of the law, "the companies usually back down, but sometimes they don't."
Keep a log of all communications with the insurer. Follow up all phone calls with a letter, fax or e-mail. If the insurer drags its feet or denies a claim, consider hiring a lawyer who specializes in filing "bad faith" claims against insurance companies.
Haven't yet filed for Social Security? Create a personalized strategy to maximize your lifetime income from Social Security. Order Kiplinger's Social Security Solutions today.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
13 Practical Strategies for Making Homeownership a Reality
If your dream of homeownership feels out of reach, these expert-recommended tips can bring you closer to realizing your goal.
By Kiplinger Advisor Collective Published
-
IRA vs. 401(k): Should You Pick One or Both?
An IRA or 401(k) can help you supercharge your retirement savings. We'll help you pick one or opt for both.
By Brandon Renfro Published
-
457 Plan Contribution Limits for 2025
Retirement plans There are higher 457 plan contribution limits for state and local government workers in 2025 than in 2024.
By Kathryn Pomroy Last updated
-
Medicare Basics: 11 Things You Need to Know
Medicare There's Medicare Part A, Part B, Part D, Medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare — and much more.
By Catherine Siskos Last updated
-
Six of the Worst Assets to Inherit
inheritance Leaving these assets to your loved ones may be more trouble than it’s worth. Here's how to avoid adding to their grief after you're gone.
By David Rodeck Last updated
-
SEP IRA Contribution Limits for 2024 and 2025
SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 in 2024 and $70,000 in 2025..
By Jackie Stewart Last updated
-
Roth IRA Contribution Limits for 2024 and 2025
Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
By Jackie Stewart Last updated
-
SIMPLE IRA Contribution Limits for 2024 and 2025
simple IRA The SIMPLE IRA contribution limit increased by $500 for 2025. Workers at small businesses can contribute up to $16,500 or $20,000 if 50 or over and $21,750 if 60-63.
By Jackie Stewart Last updated
-
457 Contribution Limits for 2024
retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
By Jackie Stewart Published
-
Roth 401(k) Contribution Limits for 2025
retirement plans The Roth 401(k) contribution limit for 2024 is increasing, and workers who are 50 and older can save even more.
By Jackie Stewart Last updated