How long-term care insurance claims work

Somewhere in a desk drawer or a filing cabinet, your parent may have a long-term care insurance policy they paid into for years. Now that care is needed, that policy can make a real difference, but only if the claim is set up correctly. Here is how the process usually works.

Step one: find the policy and read four things

• The benefit amount: a daily or monthly maximum, and a lifetime maximum (sometimes called a pool of money).
• The elimination period: the waiting time before benefits start.
• What settings are covered: nursing home only, or also assisted living, memory care, adult day and home care.
• How it pays: reimbursement of actual bills, or a set cash amount.

If the paperwork is lost, call the insurance company with your parent’s name, date of birth and Social Security number. You will likely need a signed authorization or power of attorney before they will talk with you in detail.

Benefit triggers: what has to be true to qualify

According to the federal Administration for Community Living, most policies pay when a person needs help with two or more of six activities of daily living, or has a cognitive impairment such as Alzheimer’s disease. The insurer usually confirms this with its own nurse or social worker assessment.

For tax-qualified policies, which most modern policies are, federal law spells out the test. A licensed health care practitioner must certify, within the past 12 months, that the person either:

• Cannot do at least two of these six activities without substantial help, for an expected 90 days or more: eating, toileting, transferring, bathing, dressing and continence; or
• Needs substantial supervision to stay safe because of severe cognitive impairment.

That second path matters for families facing dementia. A parent who can still bathe and dress but wanders or cannot safely be left alone may qualify on cognition alone.

The elimination period

Think of it as a deductible measured in days instead of dollars. Most policies offer 30, 60 or 90 days. You pay for care yourself during that stretch. Some policies count every calendar day after the trigger; others count only days on which you actually receive paid care, which matters a lot if home care is only a few days a week. Read the definition in your policy or ask the claims representative directly.

The plan of care

Benefits are paid under a plan of care. ACL notes that after the assessment, the insurance company’s care manager approves a plan of care. Under federal law, tax-qualified services must be provided under a plan prescribed by a licensed health care practitioner. In practice this document lists the help your loved one needs and who provides it. If needs change, ask for the plan to be updated so benefits keep matching the care.

How the claim usually unfolds

1. Call the insurer to open a claim and request the forms.
2. Complete the claimant statement, a physician statement, a release for medical records and a statement from the care provider.
3. Expect a phone interview and, often, an in-person or virtual assessment.
4. Wait for a decision, often around 30 days according to the industry group Life Happens, and answer follow-up questions quickly.
5. Once approved, the insurer pays the provider directly or reimburses you, often monthly.

Start the claim as soon as you think your loved one qualifies, even if you are still choosing a community or agency. The elimination period cannot begin until the insurer knows.

Getting a facility or agency to bill the insurer

Assisted living and memory care communities, and licensed home care agencies, deal with long-term care insurers all the time. Ask them:

• Will you bill the insurer directly through an assignment of benefits, or will we pay you and get reimbursed?
• Can you send the monthly care notes and invoices the insurer requires?
• Does your license type match what the policy requires? Some older policies cover only nursing homes or only licensed providers.

Policies differ on paying family members or independent caregivers, and many do not. Confirm before hiring.

Reimbursement vs. cash benefits

If a claim is denied

Ask for the denial in writing with the specific reason and the policy language it relies on. Often the fix is better documentation, such as a doctor’s note describing exactly which daily activities need hands-on help or supervision. Every policy has an appeal process. If you believe a Utah insurer is treating you unfairly, the Utah Insurance Department takes complaints online or by phone at 801-957-9200 or 1-800-439-3805.

Common questions

Does long-term care insurance cover assisted living?

Most newer policies do. Some older ones cover only nursing homes. Check the covered-settings section of the policy.

Does long-term care insurance pay for memory care?

Usually, if the policy covers assisted living. Cognitive impairment is typically a benefit trigger on its own.

How long does a long-term care insurance claim take?

Approval often takes about a month after the insurer has everything it needs, and benefits start after the elimination period.

Will Medicare fill the gap while we wait?

No. Medicare does not pay for long-term custodial care, so plan to cover the elimination period from savings or income.