Long Term Care Insurance
Helping people when insurance companies don´t keep their promises.
Frequently Asked Questions
What is "long term care"
Long-term care primarily concentrates on helping individuals to function as well as possible for as long as possible. This type of care offers a broad range of help with daily activities that chronically disabled individuals need for a prolonged period of time. This is not just an "old age" issue. Some reports show as much as 40% of long term care is provided to people under the age of 65. If anyone has a chronic illness, injury, or frailty, that makes it difficult for to function independently then long-term care may be required. There are a variety of types of long term care such as nursing home care, assisted living care and in-home care. Your insurance policy will outline specifically what type of long term care is covered.
Will Medicare cover my long term care costs?
Medicare covers only a small portion of long-term care costs. Medicare will pay for care in a nursing home only when certain conditions are met, and even then, you are only fully covered for 20 days. In certain situations, some people qualify for partial payment up to 100 days. Medicare, a federal program providing health insurance for individuals 65 and older or individuals with disabilities, has specific rules that apply for payment of nursing home care. Medicare requires a 3-day hospital stay prior to transferring to a nursing home. Services received in a nursing home must relate to the illness or injury that caused the hospitalization. Medicare coverage for nursing home care ends once an individual's needs change from skilled care to custodial care.
Should I hire a lawyer and how much will it cost?
Depends. If you have tried everything you know of to try and get payment, and nothing is working, then you should contact a lawyer knowledgeable about this type of insurance coverage. That doesn't mean that you'd have to pay money out-of-pocket, and, in fact, if the lawyer wants you to pay money up front just to talk to you about your problem, then you are talking to the wrong lawyer. Different lawyers have widely varying areas of practice and expertise. If you just pick a lawyer out of the phone book, you are likely to get one that knows very little about this particular subject matter of long term care insurance. Someone who has been down this road before can tell you very quickly whether you have a claim worth pursuing, and will not charge you just for that service. Once it is determined that your claim is worth pursing, you can then discuss different fee arrangements. Depending on the strength and the size of you claim, a lawyer might be able to take the case on a "contingency" basis, which means that the lawyer is paid a percentage of whatever is recovered from the insurance company. Even better, if your claim is strong enough and the insurance company is behaving unreasonably, your lawyer may be able to force the insurance company to pay your claim in full, and also pay extra money that will cover your attorney's fees. In fact, depending on the circumstances and the law in your state, you may be entitled to compensation for "bad faith", as well as punitive damages. All of these are things that an experienced lawyer, knowledgeable about long term care insurance, can tell you very quickly, and it shouldn't cost you anything.
Do I need to have power of attorney in order to help someone with their long term care denial?
Generally, no, you don't need a power of attorney to help someone but it depends on how incapacitated the individual is. If you are helping someone (like a parent, grandparent or friend) fill out forms, and they are able to understand and answer questions, then you probably do not need a power of attorney. However, if you need to sign legal papers on their behalf, then, yes, you will need to have power of attorney. Also, if you need to access the individual's information, such as medical records or insurance claim information, you will also need to have power of attorney. An individual can always get this information themselves, but if they are not capable of doing this then you must have a power of attorney to get access to these documents. There are software packages and websites where you can download power of attorney forms.
Should I file a complaint with the Department of Insurance?
If your long term care insurance claim, or any insurance claim for that matter, has been denied or mishandled you have a right to file a complaint with your state's insurance regulatory agency. We recommend that you first try and get it resolved yourself. Go to our section The first 5 things you should do after your claim has been denied. If your insurance company will still not reconsider its denial or simply refuses to answer your questions and letters, you can file a complaint with your state's insurance regulatory agency. See our section How to file a complaint with your Department of Insurance. It is not required that you file a complaint, however, before you see a lawyer. In fact, it is often best to at least speak with a lawyer before you file so that you know what to expect and how any regulatory action could affect your claim. In general, resolving your claim through a state's department of insurance can take a long time and you will have little say in what the department decides to do. These government agencies must deal with thousands of complaints and they are often underfunded and understaffed. Surprisingly, it is not unusual for heads of these agencies to be former employees of the insurance industry!
What types of long term care does my long term care insurance policy cover? Depends on your policy. There are policies that cover nursing home care, assisted living care, in home health care and alternative health care. You must read your own policy.
My long term care insurance company has denied my claim. What do I do now? See our article The 5 first steps you need to take after your insurance company denies your claim.
I filed a claim and my insurance company denied it and returned all my premiums. What should I do? Your insurance company is taking the position that your policy was never valid to begin with. That's why it returned your premiums. More than likely it is claiming that something was wrong in the application for insurance. Read our article about "Post-Claim Underwriting" for a better understanding of what this is. In short, post claim underwriting is a practice where the insurance company performs an after-the-fact evaluation to rid itself of an insured individual it contends should never have received insurance coverage. You can try and argue to the company that this evaluation should have been performed at the time of the application and before the company offered you insurance but you probably wont get very far. You need to contact an attorney who has experience dealing with insurance bad faith practices.
What is ERISA and how does it affect my insurance claim?
If you have insurance coverage that is provided for you by your employer, then the law that applies is more than likely the Employment Retirement Income Security Act (also known as "ERISA"). This federal law governs the duties owed to you by the insurance company. ERISA sets out certain standards for establishing, administering and maintaining most employee benefit plans. It was originally enacted by Congress to address public concern that funds of private pension plans were being mismanaged and abused. It has since been expanded to include health care and disability benefits.
Although ERISA was designed to ensure that employees receive the benefits promised to them by their employers, unfortunately, the law has backfired. In a sense, it is now used to "protect" the insurance company when it does not pay your benefits. While the Act does provide certain guidelines and time frames that an insurance company must meet in order to process a claim for benefits, it doesn't allow the average person much recourse against the insurance company when it wrongfully does not pay. It only allows a narrow process of determining whether the company abused its discretion, and if you can prove that, then you can get paid your claim. Very few penalties are imposed on companies that aggressively deny claims. As a result, there is a lot of aggressive behavior.
There are exceptions and your claim may not necessarily fall under ERISA. For example, independent contractors, government employees or employees of a public agency, employees of churches or church-operated businesses, sole proprietors, partners, and their spouses are sometimes not subject to ERISA preemption.
I purchased long term health care through my employer, should I contact my employer if my claim is denied?
How long do I have to file claim?
You must look at your own policy to determine how long you have to file a claim. The time requirements are generally found in the section where it explains how you are supposed to file a claim. Policies vary greatly on how long you have to file your claim. Some policies require notification as soon as 20 days after your loss begins, some allow for claims to be filed up to six months after. Filing a claim should be done in writing.
What are ADLs?
ADL is short for Activities of Daily Living. These consist of the basic activities and functions that all of us perform on a daily basis usually without any kind of assistance. These activities are: eating, dressing, bathing, toileting, transferring and continence. For a more detailed discussion on this topic, go to ADLs Defined to see how these activities affect your insurance benefits.
How is the insurance company supposed to handle my claim?
See our article 10 Things Your Insurance Company Doesn't Want You to Know to find out how your insurance company is required by law to handle your claim.
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