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WHEN LONG TERM CARE INSURANCE SAYS NO!!

Apr 14, 2018 by Dennis Patouhas

Over the 17 years that we’ve been providing services to the community we have witnessed what a changing landscape Long Term Care Insurance has evolved.

Let me apologize upfront at the length of this article but this is a complicated matter. Without getting into a detailed history of how this segment of the industry has evolved, suffice it to say, the marketplace is not what the insurance companies had anticipated when they launched these products. There have been various modifications to the insurance policies sold that tried to keep up with the needs to finance the cost of Home Care for an increasing number of aging adults. While the newer policies have addressed changes in the landscape of Home Care, the older policies contained ambiguous language that permitted the insurance company to limit the conditions under which the policy could be used. 

We have always advised our clients to review the policy language to determine whether it was accepting of certain providers of Home Care. The problem is in the narrow definitions of who is a qualified provider. Some of the language used include reimbursing only for services provided by a Medicare Certified Home Health agency or a State Licensed Home Health Care Agency. The policies with restrictive language have been and will increasingly be challenged because the terminology used is often not a defined term within the policy or in general legal definitions. These are general descriptions of each;

  • State Licensed Home Health Care Agencies are providers of medical care in the form of wound care, physical therapy, speech and occupational therapy.
  • A Home Health Care Agency is a provider of certified nursing assistants (CNA) or home health aides (HHA) who are qualified to assist with activities of daily living (ADL's).  A home health aide provides assistance monitoring a loved one with medical problems, but the focus of care is actual assisting with everyday tasks, such as bathing, eating, housekeeping and so on.

The problem in a state like Connecticut is that Home Care is registered with the State not licensed by the State. The terminology State Licensed Home Health Care Agency narrowly defines the policyholder’s choice to only use a skilled nursing agency. Skilled nursing agencies which are licensed entities, have typically been for acute care (temporary) as with someone who, by receiving Home Health Care will enjoy an improvement in their condition to the point where they can be discharged from Medicare services, having plateaued in their progress.

This defines a temporary need for that level of care. Home Care is not typically a temporary need but a chronic one that may intensify as a person’s condition worsens with age. There are not many skilled nursing agencies that provide a full menu of non-medically related services (Home Care). Therefore, the number of agencies that fit the definition of the insurance policy is very limited.

You can imagine the surprise by the policyholder and their families when they realize that for all of the money spent to carry this supposed solution to financing care for their elder years, that it has very restrictive covenants that  require a uniquely defined service provider with credentials that are not mandated for the vast majority of those agencies whose services are the very thing that the policyholder needs.

An analogy might be that if you bought a car in the 1950s and purchased a lifetime service agreement that specified that you must have it serviced only by a garage that is a "licensed carburetor repair shop". In 2018 you would be hard-pressed to find someone working in any car repair organization that knows what a carburetor is. So much for your years of paying premiums for long-term care on your 1953 Pontiac. Most repair shops could probably get it fixed but they don’t qualify with the definition in your lifetime service agreement. The bottom line is that Healthcare and care for the Aged have evolved. What once may have been a recognized standard has been surpassed and, in some cases, eliminated with new and more effective solutions. In the wake is a policy that can’t be used but cost a whole lot of money.

So, what is a policyholder to do?

  • Start by trying to get an understanding of what the insurance company considers compliance with the language of their policy. In some cases, a mere certificate held by a Home Health Aide (HHA) or Certified Nursing Assistant (CNA) may suffice.
  • If you are working with a Home Care Agency that you prefer to be your provider, grant them permission to discuss matters with the insurance company and see if they can work it out.
  • The interpretation of any policy is subjective based on the language. The insurance company may interpret the policy based on their understanding and that interpretation may not be in sink with what the policy language states.  When challenged insurance companies often make provisions to comply with need.  All insurance policies are one sided; terms are dictated by the insurer.  When problems of non-payments/coverage are elevated to the legal level, the courts almost always side with the insured.  Knowing this when disputing coverage details such as licensing agency terms will help influence the insurance to pay for needed care from the provider of your choosing.
  • Insurance policies are regulated on the State level. If negotiations fail, a complaint to the State Insurance Department can be filed.
  • It’s like your 1953 Pontiac service agreement. You have paid for something that cannot be used. The courts are starting to see it and it will become more and more an issue. Pointing out to the insurance company that they have sold you a policy that cannot be used. Under the law, Licensed Home Health Care agencies that provide custodial Home Care do not exist or are so limited in number as to severely restrict a policyholder’s choice.
  • You are not seeking to use the policy for something other than what it was intended. You are seeking to be able to use it with a broader variety of providers that are better able to meet your needs and at competitive prices. Your policy allows you so much in benefits and your looking to use it as efficiently as possible.

Lastly and before you throw in the towel and stop paying premiums and letting the policy lapse, seek out a reputable insurance consulting firm that works on handling dispute resolution. A situation like what you’re currently dealing with may not work, but the policy may still be totally viable under the right circumstances. To let the policy lapse would make the premiums paid to date become a sunk cost. To replace the policy that you now have at your current age and health condition may be unaffordable. Good consultants can evaluate what you have and what you’re trying to achieve. They can see if, through knowledgeable intervention they can reach an understanding or concessions from the insurance company.

I would like to thank Katalin Goencz for her contributions to this article. Katalin heads up Med Bills Assist which is based in Stamford, CT and are Medical Insurance & Reimbursement Specialists. Katalin can be reached at katalin@medbillsassist.com or 203-569-7610.

Comfort Keepers of Lower Fairfield County has been providing senior care services for over 17 years. As one of the oldest agencies in the area we have helped hundreds of families with elder care for their loved ones. Our service area covers Greenwich to Fairfield and includes such towns as Norwalk and Darien. As part of one of the largest systems for senior care with over 750 offices nationwide we have solutions to senior care issues where you need them. Call us at (203) 266-1227

 

Long term care insurance: policy provisions in dispute - Lexology

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Resolving Long Term Care Insurance Disputes by Glenn R. Kantor, Esq and Corinne Chandler, Esq

http://www.canhr.org/publications/newsletters/NetNews/Feature_Article/NN_2011Q4.htm

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https://www.consumerreports.org/long-term-care-insurance/long-term-care-insurance-gets-a-makeover/

 

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