Does Long-Term Care Insurance Cover In-Home Care?

If your loved one needs in-home care and has long-term care (LTC) insurance, read the policy thoroughly with these seven questions in mind to understand coverage.

What types of care are covered?

Your loved one’s LTC policy may only cover care that’s provided in a nursing home, or it may be more flexible and cover care they receive in their home.^[01]

“It’s critical to understand from the onset of care what the insurance policy covers. It’s equally important to understand what it doesn’t cover,” cautions Vicki Demirozu, founder of Giving Care with Grace, a soft-skills training program for caregivers.

Does the LTC policy pay a cash benefit, or does it reimburse?

A few LTC policies are designed to provide the policyholder with a cash benefit, but most policies reimburse the insured after they’ve paid for the care they need.

If a predictable cash flow is important to your loved one and their LTC policy requires that they receive and pay for care before they’re reimbursed, it’s a good idea to have a few months’ worth of cash on hand to pay care expenses while the insurance company reviews and pays claims. Without such a reserve, seniors risk going into debt to pay for care while they wait for the insurance company to reimburse them.

What’s the daily, weekly, or monthly benefit limit?

Most LTC policies are designed to cover a certain amount of expenses over a specific period. For example, a policy might cover up to $200 per day or $1,400 per week.

“If your care needs exceed the policy’s coverage, you’ll need to pay out-of-pocket for additional hours once the deductible is met,” explains Demirozu.

Are premiums suspended once the policy is activated?

In most cases, once the benefit period starts, the policyholder is no longer required to pay premiums. This is especially helpful for seniors with low incomes, as the money they were spending on premiums can now be spent on other things they need.

What are the policy’s eligibility triggers?

Many LTC policies require policyholders to demonstrate that they need the care the policy is intended to cover. For example, needing help with activities of daily living (ADLs) is often an eligibility trigger. If your loved one doesn’t need help with ADLs, they may not yet be eligible to begin using their LTC insurance.

Insurance companies typically send a home health nurse to a policyholder’s home to assess them and determine what kind of assistance they need before the benefit period can begin.

What’s the elimination period before my loved one can begin receiving benefits?

Elimination periods, also known as waiting periods, are a common feature of LTC policies. During the elimination period, your loved must pay out-of-pocket for the care they receive. These periods usually range from 20 to 100 days, but 90 days is most common. Once the waiting period is over, the insurance company will begin paying either the cash benefit or reimburse your loved one for the expenses they’ve paid themselves.

If your loved one has already received in-home care, the insurance company may start the elimination period beginning with the date the doctor indicated they needed care.

“Insurance policies vary significantly, but most will count care that’s provided in a skilled nursing or rehab facility as days of care toward the elimination period,” explains Demirozu.

Do caregivers need to be licensed or certified?

Usually, cash benefit policies don’t specify requirements for caregivers because the policyholder can use their cash benefit as they see fit.

LTC policies that reimburse the policyholder often require caregivers to work for a licensed provider or agency. Depending on the policy, using a family caregiver may affect your loved one’s elimination or waiting period, which affects when they can receive benefits.^[01]

Can you afford home care?

Once you understand how your loved one’s LTC policy works and the insurance company has confirmed their eligibility for in-home care coverage, it’s a good idea to ask about the process for filing claims. While each policy is different, the basic process usually involves the following steps:

1. Decide who will provide home care. Identify at least one potential home health agency that can provide the necessary care and confirm with the insurance company that they’ll cover the services provided by that agency.
2. Ensure you’re able to act on your loved one’s behalf. If you’ll be handling the claims submission process for your loved one, you’ll likely need to have a power of attorney document in place.
3. Submit the claim. Once home care has started, complete and submit the insurance company’s claim form and authorization to release your loved one’s medical information. If the cash benefit or reimbursement will be made by direct deposit, provide your loved one’s banking information.
4. Monitor claims and payments. Keep an eye on submitted claims to ensure your loved one is being paid in a timely fashion.

What if my loved one’s LTC claim for home care is denied?

Home care claims are sometimes denied for what may seem like very minor reasons.

“If a client’s care plan says they need assistance with two activities of daily living, but the caregiver only helps with one, the whole claim for that day is likely to be denied,” says Demirozu.

If your loved one’s claim for home care is denied, your next step is to file an appeal. The appeals process varies by company, but generally you’ll want to:

1. Understand the denial and why it happened. Insurance companies are required to inform policyholders why they’ve denied a claim.^[02]
2. Gather supporting documentation. One of the most common reasons for claim denial is missing or inaccurate information in the claim. For example, you may need to ask the home health agency to generate a more complete description of the services they provided.
3. Consider hiring an attorney. It may not be necessary to involve an elder law attorney, but it can be helpful to understand your loved one’s rights.
4. File a formal appeal. You can do this by mail or online if your loved one’s insurance company makes that available.

Read more:Can an HSA Be Used for Long-Term Care Costs?

Expert advice for affordable home care

Depending on your loved one’s LTC insurance policy, you may find that a portion of the home care or home health care they need isn’t eligible for benefits. In that case, you may want to consider using Medicare or Medicaid to pay for their home care.^[03,04]

Whether you’re using an LTC insurance policy or another payment option to pay for home care, you’ll want to make sure you’re hiring a caregiver who will be a good fit for your loved one. The Senior Living Advisors at A Place for Mom are familiar with many home care agencies and can help you find the right caregiver, all at no cost to you.