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The 3 Big Mistakes People Make Filing Long-Term Care Insurance Claims

A specialist shares advice on avoiding them and getting the promised benefits

By Ben Rao

Long-term care insurance policies are designed to help cover the expenses of home care, adult day care, assisted living, memory care, skilled nursing and hospice, as well as many other services typically not covered by health insurance, Medicare or Medicaid. You'd think that filing a claim would be fairly straightforward, since long-term care policies are designed to work the same way. "Unfortunately, this couldn't be further from the truth," says Wendy Rinehart, president of Family Solutions for Care.

An older woman at home and a home-care doctor checking her heart rate. Long-term care insurance, Next Avenue
Credit: Getty

The process of filing a long-term care insurance claim can be confusing and time-consuming. It's also one that many families must navigate while in crisis mode. Without a thorough understanding of a long-term care policy's terms and the time required to manage the claims process, well-intended families often make mistakes that delay or jeopardize pay­ments for the high cost of long-term care.

Long-term care insurance policies are notorious for using vague, confusing language loaded with fine print that insurers can use to their advantage.

The insurance company is not on your side when you're filing a claim. Insurance adjusters are trained to make decisions with their company's best interests in mind — not yours. And considering the astronomical expenses involved with long-term care, there are certainly incentives for insurers to delay or deny claims. Such actions can have a potentially devastating impact on the person's quality of life and the finances of family members.

Here are the three most common pitfalls people encounter when filing long-term insurance claims and how to avoid them:

Not Understanding Contract Legalese

Long-term care insurance policies are notorious for using vague, confusing language loaded with fine print that insurers can use to their advantage.

What's more, often many years or even decades have passed since the policy was purchased. Over that time, rules for new policies and even types of long-term care may have changed significantly.

Murky policy language can also lead to confusion about the policy's elimination period, also known as the waiting period of deductible period, before benefits will begin. Understanding the elimination period is critical for determining when the policy will start covering the cost of care.

Until the elimination period ends, which could be in 180 days, the cost of long-term care services provided to your loved one must be paid out of pocket.

You may not realize that an insurer's calculation for an elimination period is very different from the concept you'd expect of "1 day of care = 1 day of elimination period."

When determining elimination periods, most policies only count days of covered service. That can become problematic for in-home care, especially if the care provider isn't clearly defined as a qualified provider in the policy.

Lack of Documentation Supporting a Claim

Most long-term care insurance policies have strict requirements regarding the documentation needed to support your claim. Without the proper documentation, your claim will likely be denied. And mistakes are easy to make.

Under some policies, the insurance company requires specific licenses and personnel to meet their criteria before approving a claim.

Book Cover of 'Paying For Long-term Care' By Ben Rao. Long-term care insurance, Next Avenue

Often, caregivers under-document care to protect a loved one from additional charges, maintain their dignity or because they're rushing to care for another client. Unfortunately, such well-intended actions can create further delays and issues in the claims process.

You'll need a written statement from the person's doctor saying he or she can't perform at least two of the six functions for what are known as Activities of Daily Living or ADLs. (The six are: bathing, toileting, eating, dressing, mobility and personal hygiene.) And the doctor must affirm that the person will be unable to perform these ADLs for at least 90 days.

If you will be sending in the claim documentation using the U.S. Postal Service, do it through registered mail, with a return receipt requested. If you submit your claim online, be sure to have confirmation sent to your email address so you have proof of timely submission.

Don't leave anything out that's requested on the claim form; omissions can also result in a denial. If you need more space than the form provides, attach an extra page with the full information.

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Not Anticipating How Much Time the Claim-Filing Process Takes

Families must keep in mind that overseeing a long-term claims process requires an enormous amount of time and effort. An average claim can take several months to get assembled and approved, and the policy's elimination period can further delay the process anywhere from 30 to 365 days.

Sometimes, lack of documentation occurs because gathering a person's medical records takes a lot of time. But it's essential to take all the time you need to ensure benefits are paid.  

Every contact made with a long-term care insurance representative restarts the 30-day clock before the insurer is responsible for notifying the family of issues with their claim.

You also need to understand that long-term care insurance companies are notorious for using delay tactics to avoid paying claims. That's why filing a claim requires continuous follow-up, ensuring the care providers send in the necessary documentation that must be filed each month.

Many policyholders are unaware that every contact made with a long-term care insurance representative restarts the 30-day clock before the insurer is responsible for notifying the family of issues with their claim. This only leads to further delays.

Aside from the process itself, filing a long-term care insurance claim will also typically require:

● Making numerous calls to the insurer, which — based on my experience assisting people with claims — includes an average of seven calls to simply initiate the claim (the average wait time to speak with an adjuster: 45 minutes to 1 hour)

● Requesting and reviewing multiple medical documents from the person's doctors

● Maintaining daily care notes and timesheets

● Tracking itemized billings

Well-intentioned families who try to navigate the long-term care insurance claims process often run into problems. Hopefully, the information and advice here can help prevent that for you and your loved ones.

Ben Rao
Ben Rao is a partner at Family Solutions for Care, a company that helps people receive their rightful long-term care insurance benefits. He is also author of "Paying For Long-term Care, " a guide to understanding and funding senior care. Read More
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