Long Term Care Insurance Basics
Lately, we’ve had a number of families ask us about long term care insurance and if it will pay for in-home care. The answer is that it all depends. Every policy is different. Since 2006 when we started Apple Care and Companion, we’ve only come across one policy that did not pay for our care. It was an older policy that was strictly a “nursing home” policy. It was clearly stated on the policy. It did not pay for assisted living or in-home care, only skilled nursing care. Other than that, we’ve never encountered a policy that didn’t pay for all or at least part of our care.
Learn the Specifics
The first thing you need to do is to understand the specifics of your loved one’s LTC policy. Ideally, you have a hard copy in hand and can review it. If not, your loved one will need to call the company to get a hard copy mailed or emailed. If you are not listed on the policy you cannot talk to the company on your loved one’s behalf. There is paperwork that has to be signed by the policy owner or the insured to allow that communication. It will make things much easier.
The Definition Page
As you review the policy, first locate the definition page. This page defines terms as it relates to that specific policy. Remember that every policy is different, even within the same company. If your mother-in-law’s policy from Genworth defines a term one way, your dad’s policy from New York Life may define the same term in a different way.
Policy Triggers
There are a couple of items that you want to find out. You want to know what actually triggers the policy to go into effect. Most, but not all policies require help with at least 2 or 3 activities of daily living, or ADLs. You will need to refer to the definitions page to see which ADLs the policy identifies as ADLs. Most, but not all companies consider the following as ADLs: walking or ambulating, feeding oneself but not preparing food, dressing/grooming, toileting, bathing and transferring. Some companies require a need for hands-on ADL care while others are okay with the need for standby ADL care.
What if your Mom can handle all of her ADLs but has dementia and requires oversight to remain safe at home? Some policies have a cognitive impairment trigger with no ADL need requirement. Most likely the LTC company will require a written diagnosis from a medical professional. Testing to confirm a dementia diagnosis can take a while so it’s best to be prepared and know your policy.
Elimination Period
The next item you want to find out is about the elimination period. I’ve seen the elimination period range from zero days to 90 days. This is how long the insured person needs to pay out of pocket before the policy will kick in and help offset the cost of care. You want to find out what the insurance company considers a “day”. Most but not all companies will consider a 4 hour shift as a “day”. Some companies even count current hospital stays or rehab days toward the elimination period. Some companies count the elimination days within an 18 month period. I’ve had some companies waive the elimination period altogether if the insured is on hospice. Again, every policy is different.
Policy Benefits
Next on the list is to find out about the policy benefits. Some policies pay a maximum daily amount or a monthly amount for a set period of time. Think of the policy as a bucket of money. The benefit is a set amount that is divided up in increments, usually with a 3 year time frame in mind. If you use less than the maximum daily amount, the bucket of money will last longer. You also want to find out if you can turn the policy on and off. I’ve seen some policies that once started, the clock is ticking. There are a few policies out there that I call the pot of gold at the end of the rainbow. These policies are unlimited and have no time frame. I’ve seen benefits range from $25.00/day to over $200.00/day. As I’ve said before, all policies are different.
Claims Process
Lastly, you should find out how to start a claim and the process once the insured is approved. Most likely, the company will have a nurse come out to do an assessment to verify that the insured really needs the care. Lately, I’ve seen these interviews conducted over Zoom and not in person. I’ve also seen insurance companies pay retroactively. Home care is started first because it is needed and then the LTC claim is processed. As long as the home care agency has their ducks in a row with the proper assessment paperwork, care plan and proper care notes, the days before the claim is initiated should count toward the elimination period.
Planning ahead is always a good idea but sometimes things just don’t happen the way we’d like. Please give our office a call with any of your home care and/or long term care insurance questions.