by Janet E. Pecquet

Long Term Care Insurance generally covers the cost of care in a nursing home.  Most policies issued within the past ten years also cover assisted living, home care, and adult day care.  The policy may cover “alternate” types of care, and it may cover the cost of, for instance, installing a ramp or grab bars in the bathroom, so that you can remain at home as long as possible.

Should you purchase long term care insurance, and if so, what should you look for in a policy?  My general rule of thumb is that if your net assets total between $500,000 and 2 million dollars, it might be worth it to purchase this insurance.  If your assets are less than $500,000, then Medicaid can be your pay source for this type of care within three to four years, depending of course on your situation.  If your net assets exceed 2 million dollars, then you probably can self-pay.  Premium prices are also an important factor in deciding whether to purchase a policy, as well as deciding what coverage you want.  Coverage can last a lifetime, be limited in time (for example, three to five years), and be limited in coverage.  What is covered and how much it will pay for each day that care is needed will affect the premium.  Your health and age when you purchase the policy also affect the premium.

What if you have a policy and coverage is denied?  Long term care insurance is a contract and the terms of the policy govern what happens next.  Your policy should contain appeal rights, and you may also want to contact the state Department of Insurance and file a complaint.  It is important to review the policy to determine the reason for the denial, and to request all documents used in making the decision from the insurance company.  Many long term care insurance companies outsource their decision-making to for-profit companies who may have their own internal guidelines driving the decision to deny coverage.  Older policies (those issued in the 1980’s and early 1990’s), for example, generally have more ambiguous terms defining coverage, and coverage is often denied for certain types of care, such as assisted living, which really wasn’t in existence when those policies were sold. 

BWS’ attorneys are experienced in appealing long term care insurance denials, and litigating those claims if necessary, including as class actions.