Last updated on March 24, 2003
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HEALTH INSURANCE
Dig into That Long-Term-Care Policy
Whether you're shopping for a long-term-care insurance policy or already have one, it pays to dally over details now. Later when you need the benefits the policy is designed to offer, your well-being will depend on what's actually promised in the contract. Getting the insurance company to come through may also depend on having a family member or friend who knows how to initiate the claims process.
The person you designate, who should live nearby in order to be able to act swiftly, becomes part of your long-term-care "team." Others may include your insurance agent, doctor and health care manager (a person you hire to coordinate your care). When you tap your policy, you may need team members to make sure your claims are paid promptly and to help resolve possible snafus.
Understand the Claims Process
Follow these procedures to expedite your claim.
Alert the insurer. Call your insurer as soon as you believe you need care. (Most policies have the company's "800" number on the front page.) A claims representative will assign a company-paid care coordinator to visit you and make an assessment of your needs.
Don't act hastily. Eunice Krieger, a long-term-care insurance agent in Morrison, Colo., recalls a client who hired a friend to take care of her. When the woman contacted the insurer about her need for services, she was informed that her policy didn't pay for care by family or friends.
Fortunately for the woman, the insurer ultimately agreed to pay because her friend was a certified nursing assistant and had all the proper credentials. "Had she not had credentials, I wouldn't have had a leg to stand on," recalls Krieger.
Develop a care plan. A care coordinator, in consultation with your doctor and family, will make a recommendation as to where you would get the most appropriate care. This may be at home, in an assisted-living facility or in a nursing home.
Complete the paperwork. A claims representative will help you or the person you designate to complete the required paperwork. This generally includes a 90-day certificate of need from your doctor or other authorized person.
To qualify for benefits under most policies, your doctor must certify that he or she expects that you will require help with at least two basic activities of daily living -- such as bathing and dressing-- for at least 90 days.
This doesn't mean you must receive long-term-care services for the entire 90-day period to qualify for benefits, but the statement is required in order to start the clock running on the waiting period you selected when you bought your policy. (The 90-day certification is not required if you are diagnosed with a severe cognitive impairment, such as dementia.)
File for reimbursement or payment. Depending on the type of policy you have, you will be "paid" in one of two ways. With a reimbursement policy, once you begin receiving care, you will be billed for services. You can pay the bills yourself and apply for reimbursement from your insurer or have them sent directly to the insurer for payment. If you have a per diem or indemnity policy, once you qualify for benefits and meet the waiting period, the insurer pays you the daily maximum benefit you purchased.
The insurance company usually cuts you a check or sends it to the care provider upon your request. If you permit the provider to file claims for you, it's a good idea for a family member to keep tabs on the bills and claims payments to catch mistakes, says Phyllis Shelton, a long-term-care specialist in Nashville.
Know What's Covered
Whether you're in the market for a policy or have one that's been filed away for a few years, now is a good time to take a deeper look at the coverage. If you run across provisions you don't understand, contact your agent or the insurance company for an explanation. Also, examine the policy for language that addresses the following:
Assisted living. If your policy is more than ten years old, it may not specifically refer to paying for care you receive in an assisted-living facility. (Such places were rare before the 1990s.) If you think you would want to use this type of setting, ask your insurer how it would handle such a claim and whether you should upgrade your policy.
Some insurers may allow you to buy add-on assisted-living coverage; others may have already decided to cover long-term-care services in these facilities even though it wasn't in the original contract. (While this extension of coverage sounds appealing, it could result in more claims for insurers and premium increases for policyholders.)
Alternative plan of care. To keep up with changes in caregiving, many newer policies are becoming more flexible. The insurer knows that five, ten or 15 years down the road, long-term care may be available in new environments, so the contract may say that if your physician and the insurance company agree on a plan of care, the insurer will pay for it even though it's not specifically mentioned in the policy contract. (For example, if your contract didn't include assisted living, the insurer might agree to pay for it if your doctor says it's the appropriate type of care for you.)
Even though having alternative-plan-of-care language in a policy seems like great feature, there's a potential drawback: The final okay on your care ultimately rests with the insurance company. If at some point the insurer tightens the reins on claims, you may not get the "flexible" coverage you expected.
Prevailing expenses. If your policy contains language that says it may reimburse you based on the average cost of particular services in your area, you could receive a lot less than you expect. In practice, it could make the maximum daily benefit you bought essentially meaningless once you begin claiming benefits.
Say you buy a $200-a-day benefit and move to a nursing home that charges $210. Your daily out-of-pocket cost is $10, or $3,650 annually. However, if the insurer bases its reimbursements on the "prevailing rate" in your region, it might pay $130 a day, raising your expenses by an additional $70. At $80 per day, the uninsured total would rise to $29,200 a year.
Such "prevailing expense" language is relatively rare, but may become more common in new policies sold by top-rated issuers because it enables companies to cut claims costs without raising premiums if they find they are paying out too much.
GE is among the insurers that have the clause in some of their existing policies but are not currently enforcing it.
Get the Help You Need
If you experience problems, don't hesitate to call your agent. That's part of their job.
Case in point: When 80-year-old Laura Manchester, of St. Louis, fell and injured herself, she filed for benefits under her policy based on needing assistance with more than two activities of daily living. Normally that should have been sufficient. Unfortunately, her doctor inadvertently raised a red flag with the insurer when he noted in his write-up for her claim that Manchester also showed early signs of cognitive impairment (which is another way she could qualify for benefits).
When the claims adjuster saw the doctor's note, he told the family that their mother would have to undergo cognitive screening in order for her claim to be approved. Her family objected, saying that their mother already qualified for benefits and that testing would be traumatic for her.
With the claims process at a standstill, Manchester's agent stepped in. He persuaded the insurer that the claim was related to her physical injuries and had nothing to do with cognitive impairment. The insurer agreed to qualify her with one condition: If Manchester subsequently wished to file a claim based on cognitive impairment, she must accept being screened. The family agreed.
If your situation is complicated or if you become confused or don't live near your family, consider hiring an independent care manager to act as your advocate.
The National Association of Professional Geriatric Care Managers (520-881-8008), in Tucson, Ariz., sells its membership list for $15. It lists 1,000 managers by state, along with their credentials. Alternatively, you can locate a manager free on the group's Web site.
Ann O'Neil, a geriatric care manager in Falls Church, Va., often serves as a liaison between her clients and their insurers. Recently, for instance, she negotiated a special care plan for two 80-year-olds who were having difficulty getting the help they needed from an agency. After discussing the problem with the insurer, O'Neil was able to get the company to agree to pay for a private, certified nursing assistant who would go to the couple's home when they needed assistance. | 
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