As one of the few firms in California who handle long term care disputes, Kantor & Kantor frequently sees long term care claims which were denied on the basis that the facility or caregiver were not “eligible” under the Policy. One of the reasons for frequent denials is that the long term care policies sold in the 1990’s were written before the popularity of”assisted living facilities.” As a result, policyholders try to use their policies to cover the cost of room of board in an assisted living facility, when the policy may only provide benefits for a stay in a “licensed” nursing home.
An article in Money Magazine suggested that long term insurance is a valuable investment. It cites lower statistics for those who may need care in the future: 44% of men and 58% of women may ultimately need long term care of more than 3 months. Other statistics have suggested that up to 70% of the population may require long term care in their lives. Regardless, the article suggests that the insurance may be a worthwhile investment since it is meant to protect against catastrophic events.
If you have long term care insurance, you can take steps to make sure that it works for you. Many insurers who issued policies in the 1990’s no longer underwrite long term care insurance policies. However, if you have a policy which was issued by an insurer who is currently in business, such as Genworth or Bankers, you should contact your agent to ensure that your policy is up to date. Specifically inquire whether your policy will provide coverage for a stay in an assisted living facility. If you are assured that there is such coverage, ask for confirmation in writing.
If you are under the age of 80 and healthy, you might also consider replacing your old policy with a newer product. Again, if your insurer is currently in the business of issuing long term care policies, it may offer you a financial incentive to stay with the Company, by offering you expanded coverage.
The most important thing you can do is to check your policy, or that owned by your parents, before you make any decisions regarding long term care. Generally, long term care insurers will not guarantee that a facility is eligible before a claim is made. Therefore you have little guidance, other than the policy language itself, as to whether a facility meets the criteria under the Policy. You can ascertain whether the Policy requires that a facility have a particular license, number of beds or a certain level of nursing care by the policy language. When you are investigating facilities, you should ask for documentation that the facility has the necessary license to qualify under the Policy.
The same is true with respect to home care. Often, long term care policies will require that care be provided by a “licensed” home health care agency. We have seen instances where our clients have inquired whether an agency is “licensed.” The agency will advise the client that it is “licensed,” but it only has a business license and is not licensed as a home health care agency by the proper state authority. This may lead to a claim denial.
The facility or the caregiver should be fully investigated before crucial decisions are made to move a loved one. Transitioning to a new home or entrusting one’s care to a caregiver is often a disturbing event; especially for those who are cognitively impaired. Ensuring that the insurance will pay for what it was intended before these decisions are made will help smooth the transition.