This guest post on long-term care insurance claims is by Aaron Skloff, AIF, CFA, MBA.
1. What should I know about the long-term care insurance claims process?
Background
A study funded by the U.S. Department of Health and Human Services asked policyholders about their experiences filing long-term care (LTC) insurance claims. Only about 4% reported an initial denial. Most denials were because claimants did not meet the policy’s definitions, and over half of those denials were later approved after appeals or additional documentation.
Qualifying for benefits
Most long-term care insurance policies state that you qualify for benefits when:
- You are unable to perform, or require substantial assistance with, two or more of the six activities of daily living (ADLs): bathing, continence, dressing, eating, toileting, and transferring;
OR
- You have a severe cognitive impairment such as dementia, Alzheimer’s disease, or significant memory loss;
AND
- Your licensed care provider certifies that the need for care is expected to last at least 90 days.
Traditional LTC policies generally pay based on these criteria. However, some combination life-and-LTC products may use more restrictive definitions, so it’s important to review your specific policy.
Understanding your elimination period
Many LTC policies include an elimination period, which functions like a time-based deductible. Instead of a dollar amount, it’s the number of days you must receive care before insurance payments begin. Depending on circumstances, Medicare may cover some care during your elimination period.
2. How can my long-term care provider or facility support the claims process?
Reviewing documentation and recommending revisions
Your long-term care provider—whether a home care agency, assisted living facility, or nursing facility—has an interest in ensuring your claim is approved if your benefits help cover the cost of care. Ask the provider to review your claim paperwork and suggest edits that align with your policy language. Many providers have experience working with insurers and can help make the documentation consistent with policy definitions.
For example, some insurers define “home” to specifically include an individual’s primary residence and independent living quarters within a continuing care retirement community (CCRC). When submitting claims for care delivered in that setting, use the insurer’s exact terms rather than abbreviations like “CCRC.” Precise wording can prevent misunderstandings that lead to denials.
Regulatory differences between states can also affect coverage for residents of CCRCs. In some states, protections that guarantee parity between home care and nursing home benefits may exclude policies issued to CCRC residents. If your policy language doesn’t clearly address CCRCs, ask your insurer for clarification in writing so you know how such care will be treated under your contract.
3. Will my provider accept payments from my LTC policy?
Unlike many major medical insurers that create narrow provider networks and negotiate fees, LTC insurers generally do not restrict which licensed care providers you can use. LTC policies typically pay for covered care up to the policy limits regardless of the provider, so most providers readily accept LTC insurance payments.
Many insurers also offer care coordination services at no additional cost to help you access policy benefits, including alternative care options when appropriate. Still, it’s wise to confirm how your policy treats specific settings—home care, assisted living, nursing facility care—or whether care in a CCRC is treated as an alternate care benefit. Older policies, in particular, may use different benefit categories, so verify coverage details with your insurer before making decisions.
About the guest blogger
Aaron Skloff, Accredited Investment Fiduciary (AIF), Chartered Financial Analyst (CFA), and MBA, is CEO of Skloff Financial Group, a Registered Investment Advisory firm that provides financial planning, investment management, and employee benefits services for small to mid-sized companies. He can be reached at www.skloff.com or by phone at 908-464-3060.