In 1988 congress passed the Medicare Catastrophic Act, expanding benefits to cover skilled nursing facilities, among others.  Although nursing homes were a common term, the concept of receiving care in other settings was rather foreign prior to the 1980’s.  As new settings for care emerge, the insurance companies saw an opportunity and began heavily marketing Long-Term Care policies.  Shortly after this was one of the hottest products on the market.  Many people and employers jumped to buy policies and the insurance companies cashed in, or so they thought.

     What wasn’t predicted was that the cost of care would sky rocket over the next two decades.  With people living longer and beginning to take advantage of the generous benefits offered, the insurance companies were left scrambling, many having to be sold to other companies at the direction of the Department of Insurance.  The number of carriers offering new policies dramatically fell and premiums rose sharply.

                Understanding when these policies were purchased and the language and terms used within them is very important when seeking to use them.  Many will vary in requirements that a facility or home must satisfy.  Others have strict terminology and may only cover an institution in which a doctor and registered nurse on staff.  Before finding a place it is important that you know what will qualify and what will not.

When reading a policy there are three main factors in determining the value; the number of days covered, the dollar amount per day, and the elimination period.  The elimination period can be understood as a sort of deductible.  This would be the number of days that someone would need and pay for care before the benefits would begin. 

In order to activate a long-term care insurance policy the insured must need assistance with at least two activities of daily living (ADLs) or have a cognitive impairment such as dementia or Alzheimer’s and that this care will be required for a minimum of 90 days. Activities of Daily Living (ADLs) are eating, bathing, dressing, toileting, transferring, and continence care. 

Once those requirements are met, you can begin to do the claims paperwork. A doctor’s certification and letter will need to be submitted unless the company provides their own assessment arranged through a third party.   This process can be difficult and finding assistance can be done easily through a Your Care Agency Senior Advisor. We are trained and knowledgeable in working with all insurance carriers and ensure things are done correctly. 

By: Jonathan Shaw

https://www.kff.org/medicaid/timeline/long-term-care-in-the-united-states-a-timeline

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