What is the Actual Claims Practice?
Each day visitors to this website request information about long-term care insurance. Some of our visitors already own long-term care insurance and they have a question about their current policy. Other visitors inquire about how to purchase a policy for themselves. We’ll often ask them “What has peeked your interest in long-term care insurance at this time?” Frequently, their response will be something like this:
“Well, my dad has a long-term care policy and it’s paying for his assisted living facility right now. I want a policy that will do the same for me.”
“My mom has 24-hour home health aides right now. If it wasn’t for her long-term care policy, we’d have to put her in a nursing home.”
“I was the power of attorney for my aunt and her long-term care policy paid most of the cost of her care each month for nearly ten years.”
Millions of long-term care policies were purchased in the 90′s. Hundreds of thousands of policyholders are now making claims. In fact, in just 2013, the leading long-term care insurers combined to pay over $7.5 BILLION in long-term care insurance benefits to over 273,000 policyholders. (Source: AALTCi)
More than $20 million dollars in benefits is being paid to long-term care policyholders every day, 7 days per week. In the time it takes to read this post, over $70,000 of long-term care insurance benefits are being paid.
But how many claims are denied?
The federal government commissioned an audit of long-term care insurance claims practices and the Department of Health and Human Services published the findings in a 20-page report. The audit was conducted over a 22-month period in 2008 and 2009.
The audit reviewed both approved and denied claims from seven of the leading long-term care insurers. These seven insurance companies are currently paying over 70% of long-term care insurance claims. They audited EVERY denied claim for some of the insurers in the study.
Here are a few important points made in the report:
“…there is a low incidence of disagreement between the clinical audit team and the insurance company adjudicators, particularly when it comes to denied claims.”
“…There is a greater probability of approving rather than denying a questionable claim.”
“…Regarding denial decisions, we found that in all cases, there was no evidence to suggest that the individual met the tax-qualified criteria for benefit eligibility in their policy.”
“…This would suggest that companies are consistently applying their clinical contract language to their claims decisions.”