They are your clients, and they will have questions. Naturally, your inclination is to help—even if they didn’t purchase the long-term care policy from you. Instead, first stop. Stop, to avoid overcommitting. To be clear, the point of stopping is not for clients to delay submitting their claim. The point is to be thoughtful and prudent before acting. Has your client even reviewed the policy before calling in the claim? Will you be assisting them? The goal is to produce a good experience for them and to avoid the hassle and stress associated with a delayed or denied claim.
If the insured or family member reaches out telling you they think it’s time to go on claim, listen. Listen and empathize as they describe their challenges and the strain on their family. Then, take a moment to praise the decision to purchase the policy to begin with. They already have a great head start compared to most Americans. Even so, it’s important to convey the process they are about to embark on.
Understanding Eligibility
A long-term care insurance (LTCi) policy is catastrophic coverage, comparable to homeowner’s insurance. The homeowner’s policy kicks in when the house is destroyed by a fire or tornado. But it won’t pay for home maintenance and repairs.
Similarly, LTCi is not designed to help with all the afflictions of growing old. Generally, insureds need support before they can satisfy the criteria to receive LTCi benefits from their policy. They will likely need help with Instrumental Activities of Daily Living (IADLs) like food preparation, grocery shopping, housekeeping, managing medications, managing finances, paying bills, yard work, or transportation.
When they think they are eligible to be on claim, a licensed health care practitioner (doctor, nurse, social worker) will assess whether they satisfy the eligibility criteria (i.e. triggers). Generally, this is (1) having a severe cognitive impairment or (2) needing help, from another person, with at least 2 out of 6 activities of daily living (ADLs) like bathing, dressing, toileting, transferring (in and out of bed or chair), eating, and continence. Once the criteria have been met, the LTCi policy can cover IADLs as well.
Note: Most policies consider ADLs to include standby assistance as well as hands-on assistance. Also, older LTCi policies issued before 1993, may have language requiring hospitalization or nursing home stay before benefit eligibility.
Common Reasons for LTC Claims Denials:
- Insufficient evidence or documentation to satisfy eligibility
- Insufficient documentation for the Plan of Care
- Unapproved or unlicensed care provider
- Services not covered
- Elimination period not met
- Policy lapsed
- Conflicting medical opinions
- Excluded conditions (like substance abuse or self-inflicted injuries)
Manage Expectations–The Process
Claims can take eight-plus weeks to get approved when assisted by third parties like: Amada Senior Care, Jahnke Consulting, or Thalheimer Insurance. For unassisted claims it could be eight to 12 weeks or longer. Consequently, with a waiting period like 90 days, the family can expect to pay out of pocket for care for five to six -plus months prior to receiving a payment from the insurer.
Note: Sometimes families hold invoices until the claim decision is finalized. But they should submit them right away so they can be paid when the claim is approved. In fact, one can contact the insurer even before they receive an invoice—like to obtain provider approval. (Typically, the elimination or waiting period begins from the first date of qualified care service.
Setting proper expectations can avoid turmoil and stress. Insurers need adequate documentation supporting the insured’s eligibility and plan of care. Unfortunately, the psychology of getting old is that insureds are likely to overstate their abilities at doctors’ appointments. They may conceal their declining physical or mental condition due to embarrassment and/or fear of losing their independence.
For example, during an assessment, one claimant denied problems with continence while he was literally wearing Depends. Insureds are inclined to talk about their best days but perhaps they should describe their worst too. Consider “sundowning” with dementia (confusion, agitation, pacing, aggression) which gets worse late in the afternoon or evening. Knowing this, should one schedule the cognitive assessment in the morning when they are at their best?
Unfortunately, sometimes doctors’ notes are written optimistically to protect patients’ feelings—thereby complicating benefit eligibility. Doctors today generally do not supply the same amount of detail they did years ago. They may click a digital option from a selection describing the patient’s condition vs. a personalized written narrative.
The family should review the insured’s medical records and encourage doctors to be forthcoming, detailed, and prompt. Additionally, consider that billing specialists are motivated to submit paperwork, so doctors get paid—whereas LTC claims requests may be a lower priority.
The insured/families are responsible for assembling records from physicians and caregivers and submitting them to the insurer. Insurers have very specific criteria (fax, mail, portal, email) which seniors may find challenging.
Important: while insureds are known to overstate their abilities—sometimes they or their families exaggerate or misrepresent their condition. This confuses and delays benefit eligibility. Therefore, be up-front and honest—since insurers may elect to engage an investigator for questionable claims.
Manage Expectations—Your Engagement
Your clients should read their LTCi policy. Afterwards, they should read it again. Reviewing the contract, obtaining medical and care provider records along with communicating with the insurer is an arduous task. Although well-intentioned, you likely won’t have the time or expertise to do this. So, don’t get in over your head and commit to assisting when you are unable to. However, you can arm clients with basic knowledge to help them manage the claim or refer them to a LTC claims consultant who will charge a fee for their professional services.
Let them know up-front if you will be engaged or not. The very last thing you want to do is antagonize them. Appropriately managing expectations can leave a good impression on your clients and their family.
Client Considerations
- Do Not let the policy lapse.
- Urge families to sign up for third party notification to prevent lapses.
- If the policy has lapsed due to cognitive impairment or functional incapacity, quickly explore if the policy can be reinstated.
- Review coverage parameters. Get a copy of the policy if necessary.
- Did the client make a change to reduce their benefits such as during a rate increase or otherwise?
- Encourage families to select one point person to interact with the insurer.
- Consider setting up Power of Attorney (POA). Obtain necessary paperwork like HIPAA release forms to allow the insurer to communicate with physicians and caregivers.
- Ask about the insurer’s claims process. Find out how providers are assessed and get suggestions about care coordinators. Ask about discounts for LTC services.
- Ensure the trusted family member/POA is present each time the insured interacts with the insurer.
- Seniors on their own may get confused and not disclose sensitive care needs which harms their eligibility for benefits.
- Be prepared to supply the following (a) a copy of the license for the home health care provider or facility (b) the health care practitioners Plan of Care (c) the care provider’s daily caregiving notes (d) invoices for care services and (e) a list of the physicians and medications.
Policy Provisions to Review
- What criteria trigger benefit eligibility?
- How long is the Waiting/Elimination Period? How exactly is it counted?
- What is the Maximum Daily/Monthly Benefit?
- Will the maximum benefit increase annually?
- What Is the Lifetime Maximum Benefit Amount?
- What types of care services are covered and how are they defined?
- Does the Benefit Amount, Elimination Period, or Benefit Period vary for Home Health Care v. Assisted Living Facility v. Nursing Home?
- Is the policy Reimbursement (most common) or Indemnity?
- Is there Joint coverage?
- What riders are included in the policy?
- Is there Waiver of Premium and when does it begin?
- What exclusions apply?
If you want to learn more about LTC definitions you can refer to CLTC: A_Guide_For_Your_LTC_Insurance_Policy.pdf (certitrek.com)
Good News—Silver Lining
While LTCi often gets a bad rap as having an onerous claims process, we should recognize insurers have the responsibility to avoid paying ineligible claims. They need adequate documentation to justify payment. The more prepared your clients are, the more pleasant their claims experience will be.
It’s human nature when we receive good service, like 10 times in a row, that we simply carry on silently. But if on the 11th visit, we have a bad experience, then it’s the one time we talk about. Now imagine if you have a negative experience with a claim while under the pain and duress of a loved one’s decline. It is magnified—unbelievably so.
We’ve all heard of heart-breaking LTC claims examples. But, in 2023 alone, $14+ billion of traditional LTCi claims were paid. We don’t hear enough about these heart-warming testimonials where they were rescued by their policy. Not just the insured, but their spouses and children too—who now can spend more quality time with them vs. caregiving. Perhaps it’s our own fault, as an industry. We fail to toot our own horn, particularly in November, during Long-Term Care Awareness Month.
In the U.S., there are over 10,000 people turning 65 every day. It’s been dubbed the silver tsunami. So, get ready. More and more of your clients will be contacting you about their LTCi policy. Be prepared to push the brakes and stop. Congratulate them on their purchase. Help manage expectations. Arm them with the knowledge that it will likely be a lengthy process—but to hang on and be patient. Then outline your ability to assist (or not), provide pointers to review their policy, or refer them to a third party.
The good news is, claim time is the time when the insurer delivers on their promise and it’s the time for you to serve the next generation, potentially your future clients.
