Long-term care (LTC) insurance is very complex. The requirements for receiving coverage are far more demanding than what is needed to qualify for long-term disability insurance – the insured needs to be unable to perform or needs substantial assistance to perform at least two basic activities of daily living such as feeding oneself, dressing, showering or bathing, toileting, or transferring from a seated to standing position or vice versa. Alternatively, a substantial cognitive impairment would qualify someone to receive long term care insurance benefits.
Reasons for Denial of Long-Term Care Insurance Benefits
If you meet those requirements, you still may not qualify for benefits if the care you are receiving is not covered by your policy. Even if you are living in an assisted-living facility, depending on your care needs, you may or may not qualify for benefits. Receiving care assistance in your home can also be problematic; and coverage may depend on whether the insurance company has approved that care for reimbursement under the alternative plan of care provisions of the policy and may also depend on the qualifications of the care provider.
Another common misunderstanding relating to long-term care insurance is that in most instances, the insurer reimburses the insured for services after the insured submits bills or invoices for services performed. Even if you have coverage providing for a certain fixed amount per day, you will not necessarily receive that amount unless you have incurred charges in an equal or greater amount.
Yet another situation we have run into is where an elderly parent is evaluated by the insurance company and the parent denies the need for services even though such needs are evident to other family members. In such situations, there may need to be a new assessment, although if the insured is in a senior care facility and has a plan of care, the facility may be able to provide the necessary evidence to support a claim.
Steps to Take If Your LTC Benefits Claim Is Denied
If your claim for long-term care insurance benefits is denied, the denial may be challenged; and there are several steps you can take to appeal the decision and obtain the benefits you are entitled to receive. Here are some suggestions that may be helpful:
- Review the denial letter: The first step is to carefully review the denial letter you received from your insurance company. This letter should explain the reason(s) for the denial and the specific policy provisions that were used to make the decision. You should compare the rationale offered by the insurance company to the terms of the policy; and if either are misstated, you may have a basis to overturn the denial.
- Understand your rights: See if the insurance policy contains an appeal procedure; and if so, make sure you follow that procedure carefully in challenging a denial, especially any deadlines you are required to meet. If the coverage is provided under a policy that was offered by the insured’s employer, an appeal may be mandatory as a condition of ultimately taking the case to court. Even if there is no provision in the policy providing for an appeal, you still should attempt to do so.
- Gather additional information: If there is missing or incomplete information in your claim submission, you need to provide additional documentation such as missing medical records or a senior living facility’s plan of care that could help support your claim. You may also want to consider getting a second opinion from your doctor or consulting with an attorney who is experienced in handling long-term care insurance claims.
- File an appeal: If you decide to appeal the denial and there is an appeal procedure in the policy or the denial letter, make sure you follow the instructions for submitting an appeal and make sure the appeal is submitted within the deadline specified. Make sure to include any additional information or documentation that supports your claim with the appeal submission. Your appeal should be objective – making accusations of bad faith by the insurance company or immediately threatening litigation is unlikely to change the outcome.
- Participate in the appeals process: Be prepared to participate in the appeals process, and make the process interactive – you should volunteer to provide additional information and encourage the claim handler to contact you if further information is needed.
- Consider alternative dispute resolution: If the appeals process does not result in a favorable outcome, you may want to consider alternative dispute resolution methods, such as mediation or arbitration. These methods can be less formal and less expensive than going to court. Another alternative dispute resolution is to make a consumer complaint to your state insurance department or to a state agency (if one exists in your state) that assists in resolving disputes involving long-term care insurance.
- Seek legal advice: If you are still having difficulty getting your long-term care insurance benefits, you should seek legal advice from an attorney who is experienced and knowledgeable with respect to long-term care insurance claims and litigation. An attorney can help you assess the merits of your claim, and can also help you understand your rights, navigate the appeals process, and represent you in court if necessary.
Challenging a Denied LTC Insurance Claim: Your Rights and Options
Overall, if you submit a claim for long-term care insurance benefits that is denied, there may be a way to challenge the denial. Long-term care insurance is expensive, and many policyholders have paid premiums for years hoping that they will never have to make a claim. But if a claim becomes necessary, it is important to assert your rights and take action and be persistent in your efforts to appeal the decision. By understanding your rights, knowing how to gather additional information that might lead to overturning a denial, and seeking help when needed, you may be able to successfully obtain the benefits you have paid for and are entitled to receive.