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Long Term Care Insurance

The longer you live, the more likely it is that you will require long term care(i.e. nursing homes, assisted living facilities, or home health care). According to, about 70% of people who reach age 65 will need long term care. About 35% of people who reach age 65 will require nursing home care. We have already discussed the multiple ways to pay for long term care. In short: cash, long-term care insurance, Medicaid (or some combination thereof).

What is long term care insurance?

Long-term care (LTC) insurance is one way to pay for a nursing home, assisted living facility (ALF), or home health care expenses. Like any other kind of insurance, you pay premiums for a benefit that you may or may not use in the future. Long term care insurance will generally require a health examination and will examine your prior health records as part of an underwriting process. if you are 75 years old, have been diagnosed with Alzheimer's or Parkinson's, and have a very poor health history, your premiums will be significantly higher (if not rejected altogether) than a 45-year-old in generally good health. You want to make sure you are honest during the underwriting process because if you make any “material misrepresentations,” (e.g.failing to disclose pre-existing conditions) your long-term insurance carrier may refuse to pay the benefit even after years of paying premiums. 

LTC insurance policies are generally bought individually, but life insurance with a long-term care rider is another option gaining in popularity (sometimes their underwriting is less strict than the stand-alone LTC policy) where you have the ability to draw down on the life insurance death benefit (referred to as an “accelerated death benefit”) to pay for long-term care expenses such as hiring a home-health aide, entering an AL For skilled nursing facility, adult daycare, or hospice care.

Long Term Care Fundamentals:
Long Term Care 101

Long Term Care has an alphabet soup of acronyms. Here are some of the most common ones you might encounter:

•    ADL (activities of daily living)

•    ALF (assisted living facility)

•    LTC (long term care)

•    SNF (skilled nursing facility)

•    HHA (home health agency)

•    PAC (post-acute care)

•    PT (physical therapy)

•    OT (occupational therapy)

•    QAPI (quality assurance and performance improvement)

•    OASIS (outcomes and assessment information set)

•    CMS (Centers for Medicare and Medicaid Services)

•    HHS (Department of Health and Human Services)

•    CFR (Code of Federal Regulations)

•    POM (program operations manual – appendices are very useful).

LTC usually only begins after an individual is in a post-acute care (PAC) setting. Acute care refers to short-term medical care. For example, if you fall and fracture your ankle, you’ll need to go to the hospital, maybe require surgery, and then possibly some in-patient or out-patient rehabilitation/physical therapy. Post-Acute Care refers to what happens next. Typically one either gets better and goes home to live independently or does not get better and has to enter a long-term care setting (which can be at home).

Long Term Care Insurance Claim Denials

‍There is a crisis facing long-term care insurance policyholders. America’s seniors are living longer than at any other time in history. At the same time, the cost of senior health care has never been more expensive. With this in mind, millions of hard-working responsible Americans purchased a long-term care insurance policy thinking that when the time came, their health needs would be taken care of. What people didn’t know was that in truth, when the time came the hurdles and challenges associated with actually receiving your policy benefits would be immensely difficult to navigate.

Why Long-Term Care Insurance Claims are being Denied?

The first problem arrives before it’s time to activate your policy. The long-term care insurance companies badly misjudged both how long people would live, and the exorbitant cost of care. As a result, they significantly undercharged for their insurance products. As time passed and this became more and more apparent, these companies had to scramble to raise premiums to cover these miscalculations.

Long term care policyholders are now faced with serious and difficult choices. They can pay the increase in premiums which in some cases can be over 100 percent or, take a reduction in benefits for a lower premium payment or, get rid of the policy altogether. The option they choose will have a serious impact on their quality of life down the road. This choice is not something that should be done without expert consultation. Advice is required for many reasons. First, many people don’t know or understand what their policy benefits are so, they’re not fully aware of what they may be giving up. Second, there are strategies for addressing the premium issue. For most policies, there is a waiver of a premium provision included in the policy terms. This means that if you are benefit eligible and activate your policy, you will no longer need to pay premiums. What people don’t understand is that in many cases they are already benefit eligible. These policies do not require the policyholder to be bedridden before benefits are payable. For most policies, all that is required to trigger benefits is stand by assistance with two or more of the activities of daily living. In other words, all that is required to be claim eligible is for an aide to be nearby to make sure you are safely carrying out your activities. The aide does not need to physically assist you. This is not a high bar to meet. An expert can help you determine if you are eligible for benefits.   

The Long-Term Care Insurance Claims Process

For those of you who have hit the point in your lives where it is time for policy activation, here is what you can expect to face when you begin the process:  

‍The Elimination Period

If you are not familiar with this, the elimination period is similar to a deductible. The policy will say that before benefits can be paid you must satisfy this period. This means that you need to receive covered services and pay out of pocket for however long the policy dictates. The elimination period can range anywhere from zero to 180 days.

Planning and strategizing is required to effectively and efficiently manage the elimination period. Waiting too long to satisfy the period can mean thousands more out of pocket. If money is an issue, spreading out the process and satisfying it over time will allow you to satisfy the period in the most cost-effective manner.  

Long Term Care Insurance Claim Submission

‍The process formally begins with the submission of claim forms to the insurance company. Sounds easy enough but, don’t be mistaken. Mistakes in claims forms happen frequently, and mistakes will mean rejections, delays, and requests for re-submissions.

For people who need care now, long term care insurance claim submission delays can be costly and life-threatening.  

LTC Insurance Claim Assessment

Once the claim forms a portion of the process is complete the next step will be an insurance mandated assessment. The insurance company is legally entitled to have their own assessment done. The insurance company will almost always exercise this right. Many seniors are proud. They hate to admit when they need help, especially to strangers. The result of this mindset is that they underplay their needs. Doing this during an assessment leaves the assessor with the impression that the insured is in good health.

The insurance company will then conclude that you are not claiming eligible and therefore will deny your LTC insurance claim. After a long-term care insurance claim denial, engaging a long term care insurance attorney for this part of the process is very important. An expert with experience in the process can assist with claim forms.

A long-term care insurance claims lawyer will also inform you that you are allowed your own independent assessment. This is an option you are encouraged to take. A home health provider can perform an assessment for you. It is crucial to choose a qualified and experienced provider who can properly and professionally carry out the assessment.  

Receiving Long Term Care And Getting the Policy to Pay

Once the assessment process is complete, the insured can now begin to receive care. The invoices for care as well as proper care notes and documentation will need to be submitted to the insurance company regularly. Mistakes and errors in the invoicing and documentation can result in long-term care claims denials, underpayments, and late payments.

The documentation must be filled out correctly. Documentation should be continuously reviewed for errors so these issues can be avoided. 

Limitations of LTC Services Covered by Medicare

Home Health Care: Medicare recipients are eligible for a limited medicare home-health care benefit if: confined to home (only able to leave for short periods for non-medical reasons, i.e. special occasions, religious services, takes significant effort to leave the house), under care plan that has been established and reviewed by a doctor who opines that the patient needs skilled nursing, PT, OT or speech therapy; and need for skilled care MUST be intermittent (less than 7 days a week or less than 8 hours a day for 21 days or less). This is often the case after surgery.

Hospice: refers to end-of-life care, typically focused on keeping the patient as comfortable as possible.

Skilled Nursing Facilities / Rehabilitation Centers: includes room/board, nursing care, therapy (PT, OT, Speech), social services, dietary services, necessary supplies/equipment. Medicare Part A will not cover unless the patient had a 3 day stay in hospital before admission to SNF and the patient is admitted to the SNF within 30 days of hospital discharge (these requirements do not apply to Medicaid residents). Medicare will only pay for a maximum of 100 days over the life of any individual.

Medicare does not pay for Assisted Living Facilities: ALFs “fill the gap” between home care and skilled nursing care. Provides housing, meals, assistance with ADLs (bathing, dressing, administering medication).  Some have specialized services (“memory care”/Alzheimer’s units), residents maintain independence with social events/activities.

Florida Medicaid Long Term Care Partnership Program

The Florida Medicaid Long Term Care Partnership Program encourages individuals to purchase long term care insurance by not penalizing them if they later apply for and obtain Medicaid long term care benefits. The way this happens is that Medicaid will do an “asset disregard” up to the value of the qualified long term care policy if and when the Medicaid application is submitted. In other words, for every dollar paid by the long-term care policy, Medicaid will allow an extra dollar in assets to be retained by the Medicaid applicant. For example, if a Medicaid applicant received $150,000 in LTC insurance benefits, they may retain up to $152,000 in assets instead of having to spend down to the normal Medicaid asset limit of $2,000. 

LTC policies that qualify under the partnership program are also tax-qualified (a portion of premiums may be claimed as a tax deduction). Also, these plans must have an inflation protection benefit.

How LTC Insurance Pays: When and How Much?

There are generally two ways long-term care insurance policies are designed to pay out when you make claims:   

  1. Expense Method: pays a benefit only when you receive eligible services (i.e. you submit bills and the policy reimburses you).
  2. Indemnity or Disability Method: pays a set dollar amount when the insurance company determines you are eligible to receive the benefits (the amount is paid directly to you regardless of the LTC expenses you incur). 

Long-term care insurance policies will usually have a lifetime or maximum benefit limit (after the policy has paid a certain amount, it will cease to pay any further). LTC policies normally pay a daily benefit amount (e.g. $150 per day or $350 per day).

When am I eligible to access my LTC Insurance Benefits?

This is referred to as a benefit trigger. The policies are typically written around activities of daily living (ADLs). The six main activities of daily living are further described in the link, but they are: dressing, walking, transferring, bathing, feeding, and toileting. Most LTC policy benefits will be accessible when you cannot do two or three out of the six ADLs or develop a serious cognitive impairment such as Alzheimer’s disease. 

However, once the benefits have been triggered, there is usually a waiting period (known as an “elimination period”), usually 90 days, before your LTC policy will begin to pay the benefit. With this elimination period, if you only need a short time in a nursing home (say after a car accident for rehabilitation), your LTC policy may not wind up paying any benefits. You can obtain a shorter elimination period by paying a higher premium.  

Who Should I Obtain Long-Term Care Insurance From?

I am an elder law attorney who focuses on Medicaid planning. People come to me when they are realizing that a nursing home or LTC is in their future and want to plan ahead (or in crisis and need of Medicaid now). I work with clients who have LTC insurance (often a low daily benefit, such as$150 per day, which may cover less than ½ of a nursing home bill) and those who do not. This article is just to educate those doing their research. 

Neither myself nor anyone in my office sells Long-term care insurance. I am happy to refer you to reputable long-term care insurance brokers in the South Florida area.

Different Types of Long Term Care Settings

Home-Based Care

Often referred to as home health care. This involves bringing someone in the home to assist with what is referred to as custodial care (bathing, dressing, assistance with meds); health care (recovery post-surgery, physical therapy, occupational therapy, wound care, disease monitoring); homemaking (cooking meals and taking care of household chores).

Medicare provides a limited home-based care benefit, but for a long-term solution: paying cash, utilizing long-term care insurance, or Medicaid is the answer.

What are Medicaid Waiver programs?

Medicaid waivers are cost-saving solutions for states (such as Florida) to try to help people stay in their own homes. This is a win-win: the elderly get to remain at home with attendant care and Florida saves money. This involves a financial partnership between the State of Florida and the federal government. While Medicaid Waiver programs can be greatly beneficial they are also subject to funding issues, which can lead to waiting lists and less predictability.

The rule of thumb is that hospital stays or short-term rehab facilities are covered by Medicare. Medicaid covers longer-term rehabilitation and permanent stays in nursing homes. To read more about how to pay for a home health aide or attendant, through Medicaid waiver, click the link.

Community-Based Care

Refers to anything but a nursing home (including home health care, assisted living facility, independent living facility)

Independent Living Facility (ILF)

ILFs are generally an apartment with a common dining room, activities directors, rides around town, etc...

Assisted Living Facility (ALF)

ALFs provide what is known as custodial care (as opposed to skilled care). They help with what are known as activities of daily living (ADLs) such as transferring, getting out of a chair, feed, shower, bathe. ALFs are licensed (on a limited basis, i.e. cannot administer medications).

Home health aides

Some people lump home-based care into the community-based care category. Home health aides also provide custodial care. They are not RNs and do not provide skilled nursing care.

Other examples of community-based care: adult daycare, senior centers, transportation services, and meal delivery. The older adult lives independently at home and requires minimal assistance (usually with family or with a caregiver) and will occasionally utilize a service in the community for some limited purpose or to provide respite for the usual caregiver.

Institutional Care

Refers to Nursing Home / Skilled Nursing Facility: more of a hospital-like setting. Nursing homes have 24-hour skilled nursing care and custodial care (as opposed to just custodial care).

How to find a good nursing home?

To compare nursing homes:

We recognize that people only enter a nursing home when it is necessary. It is the goal of your Elder Law attorney to educate and provide you with options to avoid entering a nursing home as long as possible through alternatives such as waiver programs. But if it becomes necessary, you will want to have planned for it and be able to select the nursing home of your choice – or the very best possible setting for your loved one.

Hiring an Experienced Long-Term Care Insurance Claim Denial Lawyer

The process outlined above is complex and nuanced. Mistakes at any step in the process can and will result in long-term care insurance claim denials and delays. Oftentimes, these denials and delays can result in thousands of dollars out of pocket or, for those who don’t have the means to pay for their care out of pocket it can mean no care at all.  

Our LTC insurance lawyers are well versed in this process and have dealt with all these issues and more. We can help facilitate the care process, guiding you every step of the way. For those who have already been denied, we can assist in rectifying the denial and help get care started and paid for. Our LTC insurance claim lawyers can also assist in reinstating lapsed policies, facilitating a move to an assisted living facility, or assist by recommending the best care providers in your area.  

We can help review your policy, evaluate your disability claim, and assist you in the initial approval of your claim, or overturning a denial. Oftentimes this can be done without filing a lawsuit, but sometimes fighting in court is necessary.

Your long-term care policy is too valuable to leave up to chance. Engaging legal experts is a smart investment. Don’t leave your long-term care up to chance. Seek out help.

Call today.

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Long Term Care Insurance and Long Term Care Insurance Claims

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