From Solomon, Steiner & Peck
Long-term care insurance can provide financial support when someone needs help with daily activities such as bathing, dressing or eating, whether they live at home, in an assisted living facility, or in a nursing home. However, when the time comes to use the benefits, some policyholders are surprised to find their claims denied.
Lack of Medical Documentation
One of the most common reasons for denial is insufficient medical evidence to show that the insured meets the policy’s “benefit trigger.” Most policies require that a doctor or licensed health care professional certify that the person needs help with at least two activities of daily living (ADLs), such as eating, bathing or dressing, or that the person has a severe cognitive impairment. If medical records don’t clearly document these limitations, insurers may reject the claim.
Preexisting Condition Exclusions
Some older long-term care policies exclude coverage for preexisting conditions for a certain period after the policy begins. If the need for care arises during that exclusion period, or if the insurer believes the condition existed before coverage began, the claim may be denied.
Not Understanding What’s Covered
Many denials occur because policyholders assume that all types of care or facilities are covered. For instance, some policies cover only licensed home health agencies, not independent caregivers or family members. Others may exclude assisted living facilities unless they meet specific licensing or staffing standards.
Failure to Meet Elimination Period Requirements
An elimination period is like a deductible measured in time rather than money; it’s the number of days the policyholder must pay for care before the insurer starts to pay. If documentation doesn’t show continuous care during that period, the insurer may delay or deny payment.
Administrative or Technical Errors
Sometimes denials stem from paperwork mistakes, missing signatures, or incomplete claim forms. Even small administrative issues can cause delays.
Understand Your Policy Before You Need It
Review your policy carefully, ideally with the help of a trusted family member, attorney or financial advisor. Take note of the following:
- What types of care and facilities are covered
- The definition of “benefit triggers” (ADLs or cognitive impairment)
- Elimination periods and daily or lifetime benefit limits
- Exclusions or limitations for certain conditions
Keep copies of your policy, correspondences and any amendments in one place so they’re easy to access later.
Confirm That Your Provider Meets Policy Requirements
If your policy only covers licensed providers, verify that your caregiver or long-term care facility meets those qualifications. Before beginning care, call your insurer to confirm that the provider is eligible under the policy terms.
Maintain Detailed Medical and Care Records
Ensure your doctor, home health agency or facility keeps detailed notes about your limitations and the level of assistance you need. Ask for copies of care plans, assessments and progress reports. They can make a difference during a claims review.
Track the Elimination Period Accurately
Keep receipts, caregiver timesheets and invoices for all care provided during the elimination period. Gaps in documentation can delay benefit payments.
Read the Denial Letter Carefully
The insurer must explain the specific reason for denial. This letter is your roadmap for next steps, whether it’s providing more documentation, clarifying a misunderstanding, or filing a formal appeal.
File an Appeal Promptly
Most insurers have internal appeal procedures with strict deadlines. Follow them closely and include supporting evidence such as updated medical records, physician statements and care logs.
Seek Help if Needed
If the appeal fails, consider reaching out to your state’s Department of Insurance, which oversees long-term care insurance regulations. Many states have consumer protection units or ombudsman programs that can review your case and help mediate disputes.
Certified long-term care insurance specialists can provide guidance and can assist in filing claims and appeals. Elder law attorneys can also provide guidance and can represent you in appeals.
Consumer Protections
Long-term care insurance is regulated at the state level, but many states have adopted model laws based on standards set by the National Association of Insurance Commissioners (NAIC). These regulations include protections such as:
- Clear definitions of benefit triggers and covered services
- Clarifications regarding limitations on preexisting condition exclusions
- Requirements that insurers provide written explanations for claim denials
- Appeal rights for denied claims
Knowing your rights under state law can help you hold insurers accountable.
