Be an Expert When you Discuss Long Term Care Policy Benefits
Long term care insurance policies are often complicated and use misleading terminology.
To compound things, many were written years ago as "nursing home policies"
before the explosion of home health care and in home care. While the carriers have
added options for coverage for home health care, in home care, assisted living,
and other services to the core nursing home care coverage, policyholders may not
have added these provider benefit plans. Today, only a small percentage of seniors
use their nursing home benefit, and in home care is a leading source of claims.
It is critical to review the policy, call the agent, and insurer to verify benefit
eligibility. We are happy to help you understand and apply for long term care benefits
for in home care.
When talking to your insurance agent or insurance carrier make sure you:
First, understand the typical areas of coverage and verify you have benefit coverage
for non-medical in home care/personal care services:
- Nursing Home – does not cover non-medical in home care services
- Home Health Care – may or may not cover non-medical in home care services
- Home and Community Care Providers – usually covers non-medical in home care services
If a policy has a Home and Community Care Providers benefit description you should
breathe a sigh of relief. It is one of the more current policies and you will usually
find personal care services, or in home assistance for activities of daily living,
custodial care, or something similar described in this section, and will normally
have benefits for in home care--as long as it was included in the premium. Many
carriers no longer allow the private hiring of caregivers and require the use of
home care agencies.
If a policy has a Home Health Care description, and no separate benefit description
for “Home and Community Based Care”, “In Home Care”, “Non-Medical
Home Care”, “Custodial Care”, “Caregiving” or something
similar, there may or may not be non-medical home care benefits. It is an older
policy and further investigation is required of the “Home Health Care”
benefit description. Sometimes it is plainly stated that the services of a community
based personal caregiver is covered. More often, the policy will describe personal
care/caregiver services provided by a “home health agency”, or “licensed
home health agency”. Here is where it gets confusing, and you may have to
strongly advocate for your benefits.
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The policy sounds like it should cover non-medical home care but restricts the provider
to being a home health agency. The fact is that nearly every home health agency
receives Medicare payments. Medicare prohibits charging for “private duty”
when providing Medicare covered services. So Medicare certified home health agencies
let the private duty business portion of their business go away and focus on the
much larger home health care business. However, the need for home caregivers was
still there and was a major driver in the growth of non-medical home care agencies.
Why the history lesson? Long term care policies that were not updated and offered
the benefit of “personal care services” through a home health care agency
inadvertently deny access to personal care services. This antiquated provider restriction
only allows personal caregiver services from home health agencies, but they no longer
provide the service! It was never the intention of long term care insurers to restrict
access to the benefit through this requirement. However, uninformed claim representatives
often stand by this requirement. If this is the case for you, ask to talk to the
supervisor or director of claims management, and explain you have a right to have
the personal care services and not have your claim unreasonably denied.
Another scenario is they will require a “home care agency” to be “licensed
by the state”. Again, this is an impossible provider scenario in California.
Believe it or not, California does not have a state licensing agency for non‑medical
home care providers. Providers operate under a business license. If this is this
case it needs to be explained that this is a California policy, and non-medical
home care service providers are not licensed by the state. The insurer will usually
then only require a copy of the business license.
Now that you have determined there is a benefit for personal care services…
What is the life‑time benefit limit?
That is the total benefit you are entitled to. Some policies are unlimited, but
most have maximum benefit limits.
What are the monthly benefit limits?
Policies are usually structured to provide a specified benefit per month or year.
Are there weekly, or daily benefit limits?
Most insurers have a specified daily benefit maximum that cannot be exceeded each
day. Usually 1/30th of the monthly limit. A few have only a monthly limit that allows
you to use as much of the benefit within the month on any given day but will not
pay more than the monthly limit. These provide more scheduling freedom. For example,
a beneficiary can spend more on certain days and less on others without worrying
about daily maximums.
How long is a benefit period?
Some policies will allow you to draw benefits up to 3 calendar years and even if
you have not reached the benefit maximum that is all there is. If the policy bases
the benefit period on days of service, that is better, and some policies allow you
to access any time during your life until your lifetime maximum benefit is reached.
Insurers that use daily limits in conjunction with a benefit time limit based on
calendar days never pay out the maximum lifetime benefit, unless the policyholder
reaches their daily limit every day of the year over the benefit period.
What is the “exclusion period”?
It’s similar to a deductible and is the number of days from the first day a caregiver
provides assistance to the end of the exclusion period. The insurer does not pay
benefits during this period. Make sure you ask if it is based on “days of
service” or “calendar days”. A thirty day exclusion period based
on calendar days is satisfied once thirty days has elapsed from the first day of
service, regardless if a caregiver provided services on any of the 29 days following
that day. A thirty day exclusion based on “days of service” means assistance
must be provided by a caregiver on 30 separate days. So, a caregiver providing assistance
3 days a week will take 10 weeks to meet the exclusion criteria. Typical exclusion
periods are 0, 15, 30, 45, 60, and 90 days.
Is there any waiver of the exclusion period?
Some policies waive the exclusion if the beneficiary is cognitively impaired.
Do they require their own nurse to assess the beneficiary to obtain an authorization
for home care services?
More insurers are requiring this, and sometimes scheduling this assessment can delay
benefits. Schedule as soon as possible. Some insurers will authorize services prior
to the nurse assessment, pending its outcome.
When should you file a claim?
Will they include days of care provided prior to the date the claim is filed in
the exclusionary period? Usually, a claim needs to be filed and benefits confirmed
prior to the start of care, to ensure the first day of care is counted towards the
exclusionary period, however, some insurers make exceptions.
What paperwork is required to be submitted with a claim?
Most insurers are satisfied with an invoice and record of caregiver services.
What are the requirements of a home care agency providing a caregiver?
Insurers do not set up contracts with home care agencies, or have standing vendor/provider
approvals. They approve the agency every time a policyholder opens a claim, no matter
how many years the agency has worked with insurer.
What paperwork needs to be submitted with each claim?
Usually an invoice and daily notes of the services provided; many insurers require
that the caregiver use their forms. Usually an agency’s records are sufficient.
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What is the number of activities of daily living or other services required for a
qualified benefit claim?
Most insurers require that the policyholder receive assistance with at least two
activities of daily living (sometimes three). If cognitive impairment is diagnosed
by a physician, there is no requirement for assistance with activities of daily
living; cognitive impairment is enough to justify the claim. On rare occasions,
only one activity of daily living in conjunction with “instrumental activities
of daily living” is sufficient.
Is the premium payment waived when collecting benefits?
Many carriers waive the premium when a policyholder is receiving benefits.
How long is the claim authorization valid?
Some insurers may require a new authorization for benefits periodically, usually
on an annual basis.
If claims were stopped, how long will the initial authorization be valid?
Some insurers will cancel a claim authorization if a claim has not been submitted
for a certain period. Typically, 6 months, but some for much shorter periods. If
this happens, the policyholder has to initiate a new claim, and insurers don’t make
it retroactive.
Will the insurer make direct payments to a home care agency in lieu of paying the
beneficiary?
Most will do this, and if you desire, we will accept direct payment from insurers
and every payment we receive is deposited into a trust account in accordance with
California law. Many agencies will not accept direct payment for cash flow reasons
primarily. It can take up to 30 to 90 days to get that first claim paid.
