How to Use Long-Term Care Insurance to Help Pay for Home Care
When and how do you activate a long-term care insurance policy to help pay for home care for your loved one? And what exactly does this insurance cover? Asking questions early on can make the process easier to navigate when you need it.
A long-term care (LTC) insurance policy can be a huge financial relief when your loved one needs ongoing care at home or in a facility like a nursing home. But knowing how and when to activate the policy can be confusing.
Taking a proactive approach—reading the fine print on the policy or calling the insurance carrier to inquire about benefits and eligibility—at the beginning can help you get the answers you need and jump-start the eligibility process. But first and most importantly, get your loved one the care they need immediately. Not only is this critical for their health and safety, but it will also help your older adult qualify for LTC insurance benefits.
It’s crucial to seek care for your loved one before their condition worsens, advises Jaymie DiSaia, LTC insurance department leader in TheKey’s Long-Term Care Center of Excellence. The Center, which assists clients in navigating all aspects of the claims process effectively, was established to help alleviate some of the stress that comes from managing an LTC claim from beginning to end and to assist clients in maximizing their LTC benefits. If your loved one is at risk of falling at home, for example, you need to get the necessary care services in place immediately, then begin the process of initiating a claim for LTC to help cover the costs. Important note: It may seem counterintuitive, but a person must be receiving care before you file a claim for LTC insurance benefits. You must prove the need to the insurance company first, explains DiSaia. Here’s how to maneuver through the process.
How to Start Receiving LTC Benefits
Gather all medical information and documentation pertaining to your loved one’s home care. This includes doctors’ names, addresses, and phone numbers, and information about any hospitalization or rehab stays, including the dates, DiSaia advises.
Contact your loved one’s LTC insurance carrier to begin the benefit eligibility review process as soon as he or she starts using home care. “It’s very rare that you’re going to be able to get a preapproval. They want to know that the person is actually receiving services,” DiSaia says. Although individual insurance carriers and policies vary, the approval process can take a few months to complete and, in most cases, benefits are retroactive.
Home care services usually include personal care, assistance with activities of daily living (ADLs), like bathing and dressing, companionship services, and respite care. Depending on your loved one’s condition(s), what’s needed may be hands-on assistance, someone standing by for help as needed and for fall prevention, or supervision to help the person perform ADLs safely and effectively. Long-term care insurance can help pay for some of these costs, but not all.
Keep in mind that starting the benefit eligibility review is not a guarantee that your loved one will qualify. LTC insurance policies have strict definitions when it comes to eligibility for home care services. Here are two ways they can qualify:
1. They Require Help with Specific Daily Activities
Anyone issued an LTC insurance policy after 2003 is eligible for benefits if they are chronically ill, such as having severe cognitive impairment (see below for more on this) or requiring assistance with two out of the following six qualifying ADLs:
Be aware that ADLs are not as straightforward as they sound, DiSaia warns. For instance, if your loved one requires help moving from a bed to a wheelchair, that would meet the definition of “transferring.” But help getting in and out of a car would not. Similarly, needing help with meal preparation does not meet the requirement for “eating.” However, if they have tremors and require someone to feed them, that qualifies.
“That first call you make to initiate benefits or talk to someone, ask for a copy of your loved one’s policy if they don’t have one,” says DiSaia, explaining that this is where ADL definitions as well as specific levels of coverage for services will be spelled out. “If you’re not well-versed, ask a representative at the insurance company to help you.”
2. They Are Diagnosed with Severe Cognitive Impairment
The second way for your loved one to qualify for home care benefits is to show clinical evidence of severe cognitive impairment, usually through brain imaging or standardized tests, like the Mini-Mental State Examination (MMSE). While some LTC insurance carriers consider physician notes and visits as evidence of cognitive impairment, most make their determinations based on a home visit from a registered nurse and records from your loved one’s home care provider.
Complete and consistent documentation from the home care provider becomes critical at this point, DiSaia says, because some of the other measures may not give an accurate picture of the need for home care services. For instance, someone with frontotemporal dementia might display behavior changes at home, but score within the normal range on a standardized test. Many older adults also experience “sundowning,” where their functioning worsens at the end of the day, so a home visit in the morning would not reflect their true need for services.
When going through the initial eligibility process, try to present the person needing care on one of their worst days, not their best day, DiSaia advises. It’s natural for people to try to “show off” and prove that they can be independent, but that doesn’t offer a real reflection of their care needs and can lead to denial of benefits. “We don’t want you to say how independent someone is,” she says. Talk about the challenges the person has. Put the focus on why your loved one is not safe in their own home. What is contributing to this need for assistance? What are the diagnoses? And be sure to tell the LTC carrier if the care recipient is on medications that put them at fall risk.
What Happens After Your Loved One Qualifies for LTC Benefits?
The process is not over. LTC carriers typically review cases on an ongoing basis, usually around every 90 days, though the exact time frame varies by carrier. That review can mean another home visit, a call to the home to confirm whether services are still needed, a review of records, or all of the above.
To be prepared to be reviewed by the carrier, make sure that you and the home care providers are documenting any changes in your loved one’s condition, especially if there’s a decrease in health or functioning, DiSaia says. Examples of documentation include regular reports from the professional caregiver detailing their hours in the home, services provided, and why those services are needed.
You can also expect to receive follow-up calls from the LTC carrier as part of the reassessment. One of the most important things you can do: Confirm that the carrier has a direct number to you as the family caregiver and that they call you, not your loved one. DiSaia said she’s seen cases where elderly people lose benefits after telling the insurance representative on the phone that they are independent with their ADLs, despite the fact that they require assistance.
What to Do If Your Loved One’s Claim Is Denied
Claims denials can happen at any time, not just at the start of benefits or during scheduled reviews. For example, if regular care notes sent to the LTC carrier don’t match up with the approved services, then a claim may be denied. In that case, don’t be afraid to appeal the denial and resubmit your claim. If you feel your loved one’s claim has been improperly denied or delayed, contact your state’s department of insurance and ask for a review.
Of course, it’s best to avoid claim denial altogether. Being clear about your loved one’s condition and why they need home care, and providing proper documentation are critical, DiSaia says. This approach will help you do that:
How to Make LTC Claims Denial Less Likely
- Offer a clear picture of your loved one’s level of function, and what conditions or medications make the need for home care critical.
- Provide consistent and complete documentation from the home care provider that reflects all the hours and services they are eligible to receive.
- File all claims and documentation on time.
- Write down notes about changes in functioning or health that could affect benefits and share that information with the home care provider, your loved one’s physicians, or directly with the LTC carrier.
3 Common Myths About Long-Term Care Insurance
Navigating LTC insurance can be tricky—particularly when considering the cost and amount of coverage your loved one might want and need. Here are a few common myths and facts about LTC insurance and home care.
Myth #1: Medicare Will Cover Home Care Costs
Medicare typically covers skilled home health services, like care from a registered nurse and/or a speech, physical, or occupational therapist. However, it does not cover what’s called home care services, also known as custodial home care or personal care (daily, basic, non-medical care, like eating and bathing). In some cases, Medicare will send a home aide to assist with bathing and dressing, but the hours and duration are typically extremely limited, and you cannot choose the home care agency.
Myth #2: LTC Insurance Will Cover All In-Home Care Costs
How much is covered will depend on the specific policy. Always ask for a copy of the policy and look at the schedule of benefits to see your loved one’s daily benefit amount, the number of days allowed, and the maximum lifetime benefit. Also, ask if they have supplemental coverage, DiSaia says. This type of coverage can pay for food delivery services, such as Meals on Wheels, incontinence supplies, durable medical equipment like wheelchairs and hospital beds, and even home modifications (i.e., ramps). Supplemental benefits come with their own rules and restrictions, though, so ask about those, too.
Myth #3: The Only Out-of-Pocket Costs with LTC Insurance Are the Premiums
Since benefits will not kick in until after your loved one has already started receiving home care services, there will be out-of-pocket costs. Insurance coverage is usually retroactive. However, most policies also include an elimination or waiting period for benefits. Those waiting periods vary. Plans commonly require 90 calendar days before payments begin; others might require the person to receive a set number of days of home care services before paying. Be sure to understand how the elimination period in your policy works, DiSaia says. There might also be some costs for the professional caregiver’s mileage if they drive your loved one to lunch or other activities outside their home.
Getting LTC insurance benefits for your loved one can be complicated, but knowing how the process works and getting comprehensive documentation from your home care provider can go a long way toward helping the person get the coverage they need. Just be sure to begin the LTC insurance eligibility process as soon as your loved one starts receiving home care, work with your home care agency to provide all the proper documentation to the insurance company on time, and accurately and comprehensively describe why your loved one needs care. Taking the right steps from the very beginning, and along the way, can help get your loved one’s LTC insurance claim approved—and keep it active.
Is Your Family Considering Home Care?
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