Long Term Care Insurance

Long Term Care (LTC) insurance is an invaluable tool for covering the costs of aging, whether in an assisted living community or at home with the assistance of a home care agency. Despite paying premiums for years, many people do not understand how these policies work and fail to maximize the benefits to which they are entitled. This article provides basic information on how LTC policies work and tips to maximize benefits. LTC policies vary widely in coverage limits and procedures for filing claims. Your agent can help you navigate these, as can specialty LTC advisors who will review existing policies for you. Of course, Homewatch CareGivers will aid you as best we can throughout the process.

The most important thing to remember is that this policy is a tool not for payment, but to ensure that people get the most care possible and reduce the burden, emotional, physical and financial, on their loved ones.

Tip 1 – Review policies before you need them, especially since the terms may have changed in the years since the policy was purchased. It will be easier to review this now than when there is a sudden and acute need for care.

How LTC Insurance Covers Non-Medical Home Care

Long Term Care insurance is usually based on the need to support an inability to perform two or more Activities of Daily Living (ADLs) independently and safely. These are generally considered to be:

1. Bathing – the ability to clean oneself in the shower or bath.
2. Eating – the ability to feed oneself safely without assistance.
3. Dressing – being able to put on clothes, and not struggle significantly with accessories such as buttons or zippers.
4. Transferring – the ability to walk and get in and out of bed or a chair.
5. Toileting – the ability to use and get on and off the toilet and perform associated personal hygiene.
6. Continence – the ability to control one’s bladder and bowel functions.

Insurance companies determine eligibility for coverage using phone interviews and in-person assessments by a contracted visiting nurse. They may also get medical records from providers and facilities. This process typically takes 30-45 days, but at times can take much longer. Claims are not automatically approved; if denied you may have to wait before being allowed to refile.

Tip 2 – Do not delay filing a claim when the need arises. Yet at the same time, be as confident as possible that the claim will be approved so you do not have to wait to refile.

Note – Many policies have a provision that coverage begins with a diagnosis of dementia without the need for further assessments. This is another reason it is so important to fully understand the policy before filing a claim.

Tips 3 – If you think a family member has dementia, get a formal diagnosis. In addition to the impact on an LTC policy, it may benefit to get other insurance benefits.

Know Your Limits

Almost all policies have coverage limits, either a daily or weekly maximum payment or a lifetime maximums. What these limits are may impact how you wish to schedule care. A good homecare agency can help you plan as much as possible to get the most benefit possible from your plan.

Navigating Exclusionary Periods

Exclusionary periods, also known as elimination periods, are a crucial but often misunderstood aspect of LTC insurance. This is the period between the day a policyholder becomes eligible for benefits and the day that the insurance company begins paying those benefits. It is analogous to a deductible for a traditional insurance policy – you have to pay something out of pocket before insurance starts paying.

Starting care early can be a smart strategy for managing the exclusionary period. Typically, the level of assistance required is often lower in the early stages of needing care. By starting care early, you can cover the out-of-pocket costs cheaper while satisfying the exclusionary period.

Tip 4– Start early!!

Exclusionary periods vary greatly. Most typical are 90 days, but there are policies with 20 days, 100 days, and some have no period at all. It is vital that you know how the exclusionary period will be calculated. Policies may use the “Calendar Day” or “Service Day” methods.

For example, assume that “Jim” has a 30-day elimination period, begins service on March 1 gets care on a total of 10 days in March. On April 1^st:

• The Calendar Day method will count all days in March, and will begin to pay for care beginning April 1.
• The Service Day method would only county 10 days against the elimination period, since those were the days care was provided. Jim would have to pay out of pocket for another 20 days before the insurance would start to pay.

Furthermore, you must know how many days and how many hours per day are required for in order to meet the requirements for those days to count.

Tip 5 – Ask specific questions! Given that policies vary greatly, a service agent will not necessarily know these details. Do not rely on them to bring up these types of requirements.

Maximizing Benefits with Multiple Policy Holders

For couples with multiple or joint LTC insurance policies, strategic planning can help maximize overall benefits:

1. Staggered Claims: If both partners need care, consider staggering when you start claiming benefits. This can help extend the overall coverage period.
2. Shared Care Riders: Some policies offer shared care riders, allowing spouses to share a pool of benefits. This can be particularly useful if one partner needs more care than the other. 
3. Coordinated Care Planning: Tasks in common can be allocated strategically across policies to maximize daily benefits.

Long Term Care insurance can be literally a lifesaver for families caring for loved ones. Some work upfront to understand how these policies work is a worthwhile investment. Homewatch CareGivers is happy to help you with this process and refer you to the right professionals to best provide care for yourself or your family members.