How Insurers Deny Long-Term Care Insurance Claims, Part 1

We are all at risk of needing a long-term care support system should we become chronically sick, sustain a long-lasting or permanent injury, develop problems with cognition or face frailty related to the aging process. When one of these challenges prevents someone from performing the activities of daily living – think of basic tasks we do every day like bathing, eating, dressing, transferring and using the toilet – without assistance, they need some level of long-term care whether its home-health care, community-service-provided care or care in an appropriate residential facility.

People often purchase private policies or get long-term care insurance through their employers years before they ever need it. This coverage is rarely inexpensive, and the payment of high premiums for years is quite an investment. When long-term care assistance is required, those with Long-Term Care and/or Home-Health Care policies assume their carriers will quickly approve their claims.

Getting claim approval can be a fight

The more common reality however is that when long-term care is finally needed, all too often insurance companies wrongly deny claims, leaving claimants and their loved ones struggling logistically to provide care and financially strapped in order to pay for it out of pocket, because health insurance (including Medicare) is not likely to provide sufficient coverage.

Not surprisingly, insurers that sell long-term care insurance policies are motivated more by the businesses’ bottom line than by the best interest of their insureds when reviewing claims. The result is that they look for ways to deny claims in order to reap higher profits. Long-term care services can be expensive, and benefits may be payable for years. What is important to understand is that the Long-Term Care insurance policy is an enforceable contract in which the carrier promised to provide long-term care benefits in compliance with the agreed-upon policy terms.

Insurers draft policy language helpful to them, not to insured parties

The policy language and terms can by design be intentionally confusing, ambiguous or unnecessarily complicated, and therefore claimants and their advocates do not submit the information needed for claim approval. Another denial tactic is to incorrectly assert that the policy prevents coverage because:

• The policy does not cover the medical condition it was pre-existing.
• The claimant has not provided sufficient evidence proving they cannot perform at least two of the activities of daily living.
• The home-health caregiver does not have the correct license or is otherwise ineligible to provide coverage.
• The facility or community service provider is not correctly licensed or is not of the type covered in the policy.
• The policy lapsed.

Part 2 of this post will discuss in more detail the insurance company tactics commonly used to deny long-term care claims.