Can You Trust That a Future Long-Term Care Claim Will Be Paid?

Despite the craziness of the world we live in, most people are still staying the course and preparing for their future retirement. The awareness level of the risk of needing long-term health care has never been higher. More and more people have obtained Long-Term Care Insurance to address the costs and burdens that come with declining health, mobility problems, dementia, and the frailty of aging. 

If you purchased Long-Term Care Insurance or are considering it, will the benefits be there when you need them? Do you trust that the insurance company will honor their promises? What exactly is the claims process? 

Whether you own insurance or not, will the caregivers provide quality care? What is their process to determine the proper plan of care?

Lack of Trust

We live in a time of mistrust in institutions and each other. The craziness that surrounds us today with inflation and economic uncertainty leads to more doubt. LTC Insurance has never been more important, but can you trust your future claim will be paid? 

There seems to be a lack of trust in most anything these days. According to recent surveys, the level of trust in institutions and each other is steeply declining. 

This lack of trust comes during a time of crisis. Inflation, economic uncertainty, and political and social unrest may contribute to a higher degree of mistrust and doubt.

Even trust in doctors, teachers, financial advisors, and the religious - all in decline, yet don’t you have to trust somebody? But can you? Is this lack of trust paralyzing you from the proper planning required to prepare for your future retirement?

Confidence in Your Plans?

You have probably taken steps to prepare for retirement - do you have confidence that these plans will work to provide you with a prosperous future retirement?

Being prepared for the costs and burdens of aging is a vital part of retirement planning. For many American families, Long-Term Care Insurance is a big part of the equation. The guaranteed tax-free benefits give you access to you a choice of quality care services, including in-home care.

Back to trust - will the insurance company pay? The answer is yes.

Long-Term Care Insurance has become a way to safeguard your income and assets from the skyrocketing costs of long-term health care. You don't want to be dependent on your family to be your future caregivers - but you also don't want to depend on your own savings and investments to pay for this expensive care many of us will need as we get older. 

You won't know the availability of your investments when you need care. Economic downturns can happen anytime, and you cannot predict when you will need long-term health care and how the markets will be doing at that time.

Guarantees are Nice

You want guarantees, and those are few and far between these days. However, Long-Term Care Insurance offers guarantees, and the claims are paid. The amount of money paid by the insurance companies for long-term health care is at record highs.

The American Association for Long-Term Care Insurance (AALTCI) reported that in 2021, $12.3 Billion was paid to policyholders by the top insurance companies for long-term care benefits.

Take note if you doubt the value of Long-Term Care Insurance protection or question whether insurers are paying claimants. The amount of claim benefits paid to policyholders grew by approximately $700 million compared to the 2020 payout.

Jesse Slome, Director of the AALTCI

Over 70% of the claims start with in-home care, so policyholders can avoid a facility if that is their desire. Long-Term Care Insurance covers all types and levels of care, including home care, adult day care centers, assisted living facilities, memory care, and nursing home care. 

LTC Insurance Claims are Paid

But it must be hard to make a claim? Some insurance companies are more complicated than others but getting help from your Long-Term Care Insurance specialist or even a care provider will make it much more manageable. 

LTC NEWS has teamed up with Amada Senior Care, one of the nation's leading home health agencies, to offer free no-obligation claim processing - Filing a Long-Term Care Insurance Claim | LTC News.

Several years ago, the U.S. Department of Health and Human Services published its report on Long-Term Care Insurance claims. The study was conducted by Life Plans, Inc on behalf of the Office of Disability, Aging and Long-Term Care Policy Office of the Assistant Secretary for Planning and Evaluation U.S. Department of Health and Human Services.

The study looked at 1200 claims. The study found that benefit eligibility decisions align with the supporting documentation.

Regarding denial decisions, we found that in all cases, there was no evidence to suggest that the individual met the tax-qualified criteria for benefit eligibility in their policy. This would suggest that companies are consistently applying their clinical contract language to their claims decisions. There were very few cases where a claim was approved where the documentation was contrary to the clinical contract language. This can occur if a company makes a business decision to pay a claim, even in the absence of definitive clinical documentation.

NATIONAL LONG-TERM CARE INSURANCE CLAIMS DECISION STUDY 

Interestingly, when the independent third-party audit reviewed these claims when they disagreed with the decision of the claims department, it was usually that the insurance company was too lenient on behalf of the policyholder.

The study said that the clinical auditors agreed with the decision in the majority (92%) of Long-Term Care Insurance claims cases that were approved for payment. There was disagreement in only 3% of the cases that were approved, meaning that clinical auditors disagreed with the insurance company determination that the individual was at a level of disability consistent with the clinical eligibility trigger spelled out in the policy. 

Insurance companies tend to err slightly on the side of approving claims that may not meet policy contract benefit eligibility.

NATIONAL LONG-TERM CARE INSURANCE CLAIMS DECISION STUDY

There was very little disagreement with the cases that the insurance company declined. Only 1% of the declines represented a disagreement with the decision made by the insurance company. 

… only 1% of the cases initially denied by the insurance company would have been approved by the clinical auditors. 

The auditors could not make a decision on 6% of the initially denied cases. The primary reason was inadequate information in the file.

The LTC Insurance Claim Process

Processing an insurance claim can always be challenging because of the paperwork. Long-Term Care Insurance is no different; however, some companies understand the challenges, especially when dealing with older people.

A family member, insurance agent, or someone else might be helping you process the claim. LTC NEWS can assist without any cost or obligation - Filing a Long-Term Care Insurance Claim | LTC News.

There will be paperwork. Be sure all the documents are completed correctly. Some companies will have a claim representative walk you or a loved one through the process. Many insurance companies have a nurse review the health situation of the care recipient to see what exactly is going on and why they require long-term care.

Some care providers can also assist you with the process. Medical records will be ordered to help confirm your need for assistance. Someone should reach out to the office and ask them to process the request immediately. 

An assessment may also be required. A nurse will complete the initial onsite assessment. The evaluation is a face-to-face interview conducted in your home or in a long-term care facility. The nurse assesses functional abilities, cognitive status, personal needs, and environment to help determine benefit eligibility.

It is highly recommended that a family member or close friend be present during this evaluation. Older people tend to minimize or deny their problems. A loved one can remind them of the issues they may be experiencing. 

Policies with a case management feature will provide a nursing case manager to help in this process, develop a care plan, and even find quality caregivers and facilities. You are never required to accept the recommendations. 

The policyholder can assign the benefits to the provider. This means the provider bills the insurance company, and the insurance company pays the provider directly. The policyholder could pay the provider directly and get reimbursed. With cash back and reward credit cards, some policyholders want to pay themselves to get any available rewards. 

Some Long-Term Care Insurance policies pay an indemnity or cash benefit directly to the policyholder. Bills are not required, and the policyholder gets the full amount of money available daily or monthly.

Government Regulations Offer Peace of Mind

While some observers note online complaints about Long-Term Care Insurance claims, those who have issues with anything tend to be more vocal than those who are happy. In the vast majority of cases, claims that are denied are based on not meeting the benefit trigger of the policy.

There are some examples where policyholders attempted to collect benefits that did not exist in their policy in the first place. Plus, in some situations, the policyholder or the insurance company could not obtain the information required to make a decision. 

The evidence shows that Long-Term Care Insurance provides the guaranteed tax-free benefits that the insurance company promises. Today's Long-Term Care Insurance policies must meet the regulated benefit triggers required under Section 7702(b) of U.S. Code. 

The consumer protections, regulated benefit triggers, and tax advantages add peace of mind and value. While it is natural to be distrustful, the facts and the regulations offer consumers confidence that their LTC Insurance policy will provide the benefits when necessary.

LTC Insurance is Medically Underwritten – Waiting Can Prevent You Getting Coverage

Some consumers are unhappy that obtaining Long-Term Care Insurance is difficult or sometimes impossible based on pre-existing health problems. However, due to the high number of claims paid due to the elevated risk of needing long-term health care in the future, insurance companies must use medical underwriting to ensure they are not taking undue risk.

Most Long-Term Care Insurance applications are approved for those under 60. Delaying your decision on purchasing Long-Term Care Insurance can add to the cost or even prevent your ability to obtain coverage because of pre-existing health issues. Today, most people get coverage in their 50s.

Consequences of Long-Term Care on Families

The other thing to consider is the consequences of a long-term health care event on loved ones. While the focus of this article has been the financial impact, long-term care is both a cash flow problem and a family problem. 

Older spouses are unable to provide much care or assistance, nor are they able to manage professional caregivers. Adult children have difficulty balancing their careers and families with either caregiving responsibilities or managing professional care.

Long-Term Care Insurance gives loved ones the time to be family instead of handling the responsibilities of caregiving or managing care. Many LTC policies also have case management that helps the policyholder, and their families find quality caregivers, design the proper care plan, and monitor the situation. 

With the rapidly rising long-term health care costs, including a Long-Term Care Insurance policy as part of your retirement plan, even a small one, can have a tremendous positive impact on your family and finances. 

Long-Term Care Insurance can be very affordable for most people, especially if you are younger and healthier when you obtain coverage - How Much Does Long-Term Care Insurance Cost? | LTC News.

The LTC policy will pay when you need care, but you must have on in force when you do.