Long-term care insurance: what policies cover and how a claim starts

Long-term care insurance helps pay for care that regular health insurance and Medicare generally do not cover. What a policy pays, when it starts and for how long depend on the policy you hold. Read the contract. State insurance regulators publish consumer guides, and this page draws on those.

Carevo does not sell insurance or advise on buying it. If you already have a policy, the steps below show how to find out what it covers before care starts.

What policies usually cover

Medicare.gov says Medicare does not pay for long-term care and that you can buy private long-term care insurance. The Washington State Office of the Insurance Commissioner describes long-term care as a wide range of medical, personal and social services for people with a prolonged illness or disability. It includes help with dressing, bathing, eating, toileting, getting in and out of a bed or chair, and walking. It can also include home health care, adult day care, nursing home care or care in a group living facility.

A policy usually pays a daily benefit. Washington says the daily benefit may include room and board, home care, adult day care, hospice and respite care. You also choose a benefit period, which can range from one year to the rest of your life. Ask whether benefits grow with inflation, and what that does to the premium.

State rules differ. Oregon, for example, requires policies sold there since 1992 to cover in-home care, assisted living, adult foster care and nursing home care. Other states have their own requirements.

To see where your policy's benefits might apply, look at home care, assisted living, nursing homes and adult day care.

Benefit triggers: when the policy starts to pay

A policy does not pay just because you need care. You must meet its benefit triggers. The Washington guide says that in most policies you must be unable to perform a given number of activities of daily living without help. The California Department of Insurance says the law requires tax-qualified policies to pay if you are impaired in two of six activities of daily living: bathing, dressing, transferring, eating, toileting and continence. An impairment means you need substantial hands-on or standby assistance. A tax-qualified policy also pays for severe cognitive impairment that needs substantial supervision.

Oregon describes the common trigger as being unable to perform two or more activities of daily living, or having a cognitive impairment such as dementia.

Triggers vary by policy, so find the definitions section of your contract. If you are caring for someone with memory loss, see memory care and dementia care at home.

The elimination period

The elimination period works like a deductible. It is the time between when you qualify and when the insurer starts paying. During it, you pay the full cost of care. Washington and Oregon both say elimination periods range from zero to 180 days, and a shorter one costs more in premiums.

How days are counted matters. The California Department of Insurance explains two methods:

• Calendar days. Each day after you are certified as chronically ill counts, whether or not you receive formal services.
• Service days. Only days when you actually receive covered care count. In home care, a plan of care with 3 visits a week might satisfy 3 days a week.

Some policies apply the elimination period once in your life. Others apply it again after a gap in care. Ask your agent or insurer which applies to your policy.

How a claim starts

1. Get the policy and a copy of the benefit-trigger definitions. Note the elimination period, daily benefit, benefit period and covered settings.
2. Contact the insurer before care starts. Ask what they need to certify that you meet the trigger, such as a plan of care or a clinician's assessment.
3. Ask how the elimination period will be counted and which provider types they will reimburse.
4. Keep a record of every day of care and every visit. If your policy counts service days, you will need to show which days you received care.
5. Track response times. In Oregon, for policies issued or renewed after July 1, 2012, insurers have 30 days from receiving a claim to pay, deny or ask for more information. Other states set their own rules.

The California Department of Insurance says the claims process for covered costs begins once the elimination period is satisfied, or on the first day if you chose a zero-day period.

Premiums and costs

Washington says long-term care insurance can be expensive, and that insurers can raise premiums. It adds that past history indicates premiums will likely rise, and suggests asking about the company's history of premium increases. Options for lowering the premium include a lower daily benefit, a shorter benefit period and a longer elimination period. Also ask about inflation protection, which insurers must offer in California when you buy an individual policy.

Family caregivers and policies

Whether a policy will pay a family member depends on its wording. The state guides we read do not say policies generally pay relatives. They do say that if you have a spouse or adult children, you are more likely to receive care at home from family. A calendar-day elimination period can let someone use informal care from family or friends while the days run. After benefits start, ask the insurer in writing whether a relative can be paid, and under what conditions. For other ways family members can be paid, see paying a family caregiver.

If you do not have a policy

Without a policy, families usually look at other routes. See Medicaid for people who qualify, VA benefits, and private pay. Medicare covers only limited skilled care and not custodial care. See what Medicare pays for. To find providers, tell us what you need.