There comes a point, sometimes accelerated by a health crisis, when a loved one needs extra help at home to maintain their safety and well-being. Their needs might include help preparing a nutritious meal, light housekeeping and transportation for errands and appointments, or they may require help with more intimate tasks like bathing, dressing and incontinence care.
Families are often faced with learning about these services within a short window of time and often have no previous knowledge of how this type of care is provided or how it’s paid.
When families are researching options for non-medical in-home care, the most popular question callers ask is, “Is this covered by insurance?” The answer is, “No, it is not covered by medical insurance. However, it might be covered by Long Term Care Insurance (LTCI), if you have an existing policy.”
Adult children, those designated as Power of Attorney, and even spouses are sometimes unsure if their loved one has a Long Term Care Insurance policy. If possible, the best tactic is to ask the loved one if they have a policy. If that is not an option, a quick look through the checkbook register might reveal if a sizeable premium has been paid. This annual premium is typically $1,000 or more per year and would stand out amongst common household bills.
If indeed a person has a Long Term Care Insurance policy, the next step is to locate the policy and contact the company to inquire about the benefits. The policy will generally have a contact phone number along with a policy number on the cover page.
When calling to inquire about the coverage of the policy, be aware that the company will likely request proof of Power of Attorney or require that the insured individual provide verbal permission. Once permission to gain information has been granted, there are five critical questions that should be asked.
The first critical question is, “Does this Long Term Care Insurance policy cover in-home care?” Some policies are only valid for reimbursement for in-facility placement expenses. While most policies allow coverage for your choice of facility or in-home care reimbursement, you’ll want to be certain what the policy covers.
The next question to ask is, “What is the daily benefit?” This question is essentially asking, “How much money per day does this policy provide to reimburse for in-home care expenses?” The answer is usually a dollar amount per day (for instance, $200 per day). Every policy is unique, so asking this question is essential.
Follow up with this question, “What is the total benefit of this policy?” Again, the answer to this question can vary widely as there are many unique Long Term Care policies. Typically the benefit will be provided in terms of a lump sum of money (such as a $100,000 policy); however, there are policies that are limited by number of days of care or a time frame in which the policy must be consumed once the claim is opened (such as a policy valid for 300 days after opening a claim).
Don’t forget to ask, “What is the elimination period?” The elimination period is the time frame from the start of services that must be paid privately before the insurance reimbursement claim begins. Again, every policy is different. Some Long Term Care Insurance policies begin paying a benefit on the very first day services are provided, other policies begin payment after the 30th, 60th or 90th day of services. It’s important to know and understand exactly when the benefit begins.
The final question to ask is, “Does this policy have an inflation rider?” If no, then the original daily/annual policy benefit stands as the policy was originally written. However, if there is an inflation rider, the good news is that the daily/annual benefit is more than the original policy. This may have been brought to your attention when asking about the daily or total benefit of the policy, but if not, be sure to ask.
In order to open a Long Term Care Insurance policy, it will be necessary for your loved one’s Primary Care Physician (PCP) to complete documentation proving the need for services. The Long Term Care Insurance company will forward the necessary paperwork to you directly or to the physician for completion.
While it might be convenient to open a policy to have help with housekeeping or transportation, the physician’s documentation will need to quantify that assistance is needed with at least two Activities of Daily Living (ADL’s) or dementia at a level that requires supervision for safety. Examples of Activities of Daily Living include bathing, dressing, transferring, feeding and toileting/incontinence care.
Having a Long Term Care Insurance policy can be a welcome surprise for families knowing that funds are available for care.
Even if there isn’t a current need, it is not too early to ask your loved ones if they have a policy. Knowing all the details in advance will save time and alleviate some pressure when the time comes to use it. Understanding the policy benefit now will assure that the policy is put to its best use when needed.