I did a quick internet search to see what the biggest complaints were about long term care policies. Not surprisingly the number one complaint was cost – as we have identified in the other two articles, these are not cheap to own…they are just cheaper than paying for the care out of your own pocket. Further, they are complicated to buy and it is easy to get loaded up with expensive riders you don’t need…so you should shop wisely! But the second most common complaint was people blogging that the policy Mom (or dad) owned didn’t pay for care once s/he needed it. This article will hopefully address precisely why long term care policies can be frustrating or overwhelming at the point of need.
How Most Health Insurance is Handled
First we have to back up and see how most health insurance is handled. My Mom is aging and had some heart issues recently. I, like so many other children of aging parents, showed up to drive her to the cardiologist, the hospital for a stress test, back to the cardiologist and then back to the hospital for a heart cath. In each case, we walked up to a lady at a window who took her insurance card, photocopied it and that was the end of our involvement with her insurance because – unseen by us – there were an army of people behind the scenes filing insurance claims, faxing off supporting documentation, working thru appeals and every other thing needed to make the medical insurance system work. The child (in this case me) is then able to dutifully attend to other needs of the aging senior. With long term care insurance, however, this is far, far, FAR from the case….
How Long Term Care Insurance is Handled
Let us transform the scenario above to stroke. Upon a stroke we would still go to the hospital and various doctors. Once the senior was stable, s/he would be move to a rehab unit to recover and engage in therapy to try to strengthen or regain what was lost. Well, what has Dutiful Child been doing all this time? Running to and from the hospital to check on Aging Parent; stopping by the house to water plants, feed the cat and pick up the mail; visiting various nursing home and assisted living facilities to try and decide which, if any, to move Mom to when she comes out of rehab; talking endlessly on the phone to distant siblings trying to explain what is happening and coordinate decision making; oh yes, and going to work, caring for his/her own home and probably trying to assist children or grandchildren as well. If you wonder why folks in their 50s and 60s look haggard it is because they are the very picture of the “sandwich generation,” caring for aging parents and still trying to successfully launch the generation behind them. And now, to this happy situation for Dutiful, we will now add a long term care insurance policy….
For the first time in Dutiful Child’s interaction with their aging parent, the insurance is NOT magically being handled by someone. The natural tendency is to drop the policy in the lap of the care provider (after all that is what we do at the doctor’s office and hospital!). However, this strategy is not all that successful…. Even though administrators of facilities and folks who run home health care agencies will do their best to help a family get a policy paying for care, the complexities of claiming on this product will often exceed their legal ability to help. And the entire burden falls back on Dutiful…who is by now at the end of his/her rope! So most polices will either never get a complete claim filed and/or they get a decline because no one managed the claim process effectively (in fact we know the first time success rate on filing is about 20%).
Let us explain with a picture. Have a gander at the graphic below:
This is what most people THINK should happen because this is how it works every other time they have gone to use health insurance: policy owner hands the card to the care provider and care provider contends with the carrier until payment is rendered. But that very simple process is actually complex – and doubly so in long term care where they often need documents from multiple sources to prove that the care is both medically necessary and matches the contract triggers. The real process looks more like this:
The Care provider may submit the initial documents, but this triggers multiple requests from the carrier for information from the attending physician(s), the hospital(s), and the rehab(s). It is also not uncommon for the carrier to request additional documentation from the care provider. To complicate it further for Dutiful Child, each type of care giver has different documents with different nomenclature to learn. As if this isn’t enough, the carrier may even request an independent assessor – a person who comes out to interview the policy owner and be sure that s/he is truly in need of this level of care and there isn’t some complex fraud going on. As often as not, if Dutiful Child isn’t there for the Assessor’s visit, the aging senior will cling to every shred of dignity they can and start lying about not needing any help at all. If any of these documents or interview results don’t match up with each other and with the policy language itself, the result is a decline.
But what “normal” person would know this is the process? Most people don’t know to ask how this will work and if they do ask, they are rapidly overwhelmed by the vocabulary they are having to learn and the piles (literally, piles of paper!) of documents they are being asked to gather and submit.
Now, admittedly some carriers are better than others – but even those that tell Dutiful Child that the carrier will take care of everything should have some caution about the process. Long term care policies are a precision game of matching…. Each document that goes to the carrier is going to be compared to the contract definitions in the policy. If the documents don’t match the language in the policy it will be a decline. And may I just say again it is a PRECISION matching game….
So, what is Dutiful to do? In general…
- Make sure that the care your parent is needing will meet the minimum threshold required in the contract. Most polices will require a person to need help with 2 of the 6 Activities of Daily Living or have cognitive impairment that requires supervision. If you don’t know how to read the contract, get help from a qualified long term care agent or turn to one of the budding companies on the internet that are filing claims on behalf of families. Generally they should offer a free consultation to help you understand what you have in your hands.
- Make sure that your parent is going to be receiving care in a place where the policy will pay. Some older policies are nursing home ONLY..others may have a rider for home health care but not for assisted living. Then there is the ever-tricky language found in many modern policies called the “Alternative Care Plan…”. If you are not confident in reading the contract to understand how each of these is defined, I again highly recommend you get professional help.
- Finally – assign one person to be the quarterback for this whole process. Spreading this out among several siblings to lessen the work load will only frustrate everyone. It is far better that one person take on this labor so they can become reasonably knowledgeable about the contract. Whenever possible, this “quarterback” person should review all the documents before they go to the carrier to be sure the language and written documentation PRECISELY matches the language in the contract.
Long term care policies actually pay very well – once you get the proper documentation to the carrier in a timely fashion. These policies can mean the difference in a parent getting to have control and choice over where their care happens. They can be invaluable in protecting assets and making sure that the burden of care does not fall to a family member. But they are like any other complex financial process (i.e. real estate or filing taxes). Individuals can certainly do this on their own (if you are interested in tackling this, see the claim tip sheet at www.mrsltc.com). However, you are more likely to get the result you want (and a better result) if you hire a professional to manage it for you.
Some Additional Links to help you with your long term care claim journey
- FAQ’s for Claims
- Tips for Getting Your Long Term Care Insurance Claim Paid
- Document Everything
- Why Won’t the Carrier Talk to Me?
- Riding the Long Term Care Claim Carousel
- Long Term Care Claim Worksheet
- Dutiful Heir(ess): Quality of Life and a link to Book about filing Long Term Care Claims
- Oh, the Alphabet Soup of It !
- Long Term Care Claim Basics