What Every Policyholder Can Do to Make Claim Time Easier
Whether you’re a new long term care insurance policyholder (congratulations!), or you’re a family member of a policyholder and you’re anticipating a need for that person’s care, this article can help you get your claim paid quickly and with minimal stress.
First, the good news: the long term care insurance industry has a solid reputation for paying valid claims. In 2021, the industry paid out $12.3 billion, up from $11.6 billion the year before, and $11.0 billion the year before that.
Nevertheless, the claims process can be frustrating in some cases. Here are some common reasons why and my recommendations for what to do.
MAKE SURE YOU HAVE A COPY OF THE POLICY HANDY
One of the biggest delays is caused when the policy can’t be found. When a duplicate is requested, insurers sometimes send only a summary of benefits, rather than the actual full text of the policy, which can run to 30 or 40 pages. Avoid this delay and frustration by making sure you know where to find the policy (don’t keep it in a safe deposit box—it should be easy to get hold of).
Recommendation: Scan and/or photocopy the full policy, and give a copy to a trusted relative, lawyer or accountant for safekeeping. In the event you can’t make a copy because you can’t locate the original policy, be sure to contact the insurance company before claim time to request that a duplicate of the full policy be sent.
KEEP ONGOING RECORDS ABOUT MEDICAL DATES AND CAREGIVING EXPENSES
Dates of hospitalizations, hospital names, medical practitioner appointments and caregiver days will all likely be necessary for your claim to be approved and paid.
Recommendation: Make a quick note about each of these items as they occur in a spiral notebook, so that you’ll have a complete record when claim time happens. Like car mileage at tax time, it’s usually easier to compile these instances while they are happening than to try and recreate them later.
UNDERSTANDING POLICY/BENEFIT TRIGGERS
Be familiar with what makes the policyholder eligible for a long term care claim. A patient may need quite a bit of medical care, but not need long term care yet. The policy dictates exactly when the insurer will cover care, so a read-through will usually have you understanding whether it’s time to put in a claim, or it’s best to wait a little while.
You want to do everything you can to have your claim approved the first time you submit it. That said, it’s my experience that many policyholders are reluctant to file a claim, and actually could’ve qualified for financial relief instead of hanging on with a patchwork quilt of informal caregivers. If a quick read of the policy validates it may be claim time—it usually is!
Recommendation: Read the list of the policy’s Activities of Daily Living (ADLs) and their definitions. Also, make sure you understand how the policy covers cognitive impairment. For example, a common misunderstanding is when a person who needs help shopping and cooking wants to go on claim, the related ADL is “eating.” So, needing help shopping or cooking won’t work. When filing a claim, keep in mind that you can file to be reimbursed for care received in the past, as long as you can document that the policy triggers have been met.
UNDERSTANDING COVERED SERVICES
Most long term care insurance policies sold in the last 30 years are comprehensive policies that cover professional care in virtually any setting. Modern policies have slight differences between them; in some cases, differences are quite significant (i.e., a home care-only or a nursing home-only policy). The policy tells you exactly what is covered.
Recommendation: Before lining up services that you want paid for by the policy, double-check that the care is covered by the policy! Examples of care that may not be covered are: care given by friends and family or neighbors, and care provided outside the U.S.
ASKING PROVIDERS FOR COMPREHENSIVE INSURANCE-FRIENDLY NOTES
Caregivers are familiar with writing up notes to be used by medical practitioners, and even for documentation to be sent to the IRS (for patients who are going to be able to deduct their unreimbursed long term care costs…that won’t be you, of course, since you have a policy!). However, know this: from the insurer’s point-of-view, such notes often happen to be incomplete for claim purposes. When a professional caregiver provides adequate detail about ADL help they’re currently providing, and/or any care given due to cognitive issues, it’s easier for the insurer’s claims person to approve the claim!
Recommendation: When hiring professional caregivers, ask for the contact information of the billing person and the person who will provide documentation of long term care services. Alert all caregivers and medical practitioners, especially both the person in the office who manages the caregiver, and the biller/bookkeeper, that you want to make sure the care notes and plan of care include notes on not just what their medical colleagues need to know, but also what the claims processors will need to know. For example, if a caregiver provides standby care while your loved one is in the shower, documenting that in their notes could be important to the claim.
IF AT FIRST YOU DON’T SUCCEED
Overwhelmed families whose claims are initially denied may not have the fortitude or resilience to appeal. In some cases, when they get a claim denial, they don’t pay the next premium invoice and the coverage lapses. It’s understandable that family members who are exhausted and expected the worst could give up quickly if a claim is denied.
Recommendation: Review the list of suggestions here again. Ahead of claim time—or as soon as a claim looks likely, designate someone to be the primary claim contact; it should be the person who isn’t easily overwhelmed by details, and has the time and patience to be on hold, fax and verify information from multiple sources.
As with any other type of insurance, to avoid surprises at claim time, read through the coverage so you know how things will be covered (i.e., any deductibles, and daily limits of care, and maximum duration of coverage, if any).
Every long term care insurance agent who’s not new to the business has stories of how having coverage made an incredibly difficult time for a family much better. Like most other insurances, claims can be a hassle, but these tips will make your sailing MUCH smoother!
If you have any questions about your long term care insurance or planning please do be in touch. Baygroup Insurance can be contacted at http://www.baygroupinsurance.com/forms/contact-us or call us at 410-557-7907 for more information.
