Brushing Up On Your Long-Term Care Insurance Policy
Long-term care insurance (LTC insurance) may or may not be the right choice for everyone. But it remains the only insurance vehicle that protects against potentially devastating later-life health expenses should you or a loved one be unable to perform common activities such as eating, dressing yourself, using the bathroom, and other so-called "activities of daily living" (ADLs).
If you are a LTC insurance policy holder and are interested in filing a claim, please understand that every policy is different and therefore some of the items mentioned in this article may also vary. This article was written to help families maximize their LTC insurance coverage and minimize any unnecessary out-of-pocket expenses.
Understanding Your Policy - Key Terminology
Elimination Period. This term can be defined as the amount of time before the LTC insurance policy begins to pay out. Typical elimination periods range between 0-100 days. A 100 day elimination period would mean the first 100 days of home care are paid out-of-pocket. Each policy is different. Some may allow 1 day of service to count towards 7 days of the elimination period while others will be a 1 for 1 calendar day ratio. If you are unclear about the Elimination Period, a Boardwalk Homecare representative is always available to assist.
Daily Benefit Limit. This is the daily dollar amount the policy will pay for approved at home care services, as stated in the policy. Dollar amounts may be differ for particular services such as a long-term care facility vs. home health care. If the amount of care and costs are greater than the daily benefit limit, the policy holder will be responsible for any amount above the daily benefit limit. For example, if the amount of care costs $100/day and the daily benefit limit is $90/day, the policy holder is responsible for the $10/day difference.
Policy Benefit Limit. This is the lifetime limit of the policy and it can be defined as either a total dollar amount or total time frame. The policy benefit limit can have a number of stipulations with regards to time and interruptions in service.
Assignment of Benefits (AOB). This is an option most policies have which allows a licensed home care agency to receive reimbursement payment directly from the insurer. The assignment of benefits helps the policy holder to avoid having to pay for home care services out-of-pocket and waiting 30-90 days for the reimbursement check.
Inflation Adjustment Rider. This will increase the daily benefit limit based on inflation by either a percentage or a dollar amount. Increases are effective on the policy anniversary date or as stated in the policy.
Reimbursement Requirements. The insurer typically requires copies of detailed invoices as well as caregiver activity or nursing sheets, which serve as evidence care is being provided before mailing a reimbursement payment. Additionally, the insurer may also request copies of the RN Assessment and Plan of Care. Be sure to discuss all reimbursement requirements with your insurer.
Waiver of Premium. Most policies state that when the insurer starts paying out benefits, the policy holder is no longer responsible for premium payments. Payments may become payable again if benefits are discontinued.
Exercising Your Policy - The Claims Process
To initiate a claim, a few steps must be taken. While it may vary in different circumstances, the following steps are pretty standard:
Contact your insurance company to notify them of your current health situation.
The insurer will provide the necessary paperwork needed to open a claim. This paperwork usually consists of three sections:
Personal Information. Information pertaining to the policy holder and Power of Attorney (POA), such as name, address, age, etc.
Physician’s Narrative. Must be completed by the policy holder's physician (primary care or specialist). The physician must sign off on the policy holder's diagnosis and explain the recommended need for care.
Provider Information. This can pertain to an assisted living or a long-term care facility but we will just reference home care services. It requires basic information regarding the licensed home care agency as well as a copy of their business license.
Complete the forms quickly! They can usually be faxed (as opposed to direct mail) back to the insurer which can save a lot of time, especially if the need for care is pressing.
Once the insurer receives the completed forms, they will validate the information including the legitimacy of the licensed home care agency.
The insurer will then schedule a Registered Nurse to perform an assessment of the policy holder and submit the gathered information to their Claims Benefit Analyst (CBA). The CBA will use all of the gathered information to determine eligibility and then notify the policy holder.
Again, we suggest speaking with someone familiar with LTC insurance claims when initiating care. A few extra minutes will likely offer some added protection against unnecessary out-of-pocket expenses.