Haims: The fine print on long-term care insurance

Long-term care insurance is not insurance most people know much about. Considering that we all will reach a point in life where we will need some type of long-term care, it might be worth looking into.

LTCI is an insurance that pays for services that are not covered by private health insurance and sometimes, neither by Medicare. It pays for both medical and non-medical services that aid individuals who are unable to take care of themselves due to prolonged ailment, chronic illness or disability. The care can be provided in a facility such as an assisted living facility or within a person’s home.

Although the insurance may be a good idea to help cover the expensive services involved in keeping a loved one as independent as possible, too often insurers make it difficult to open a claim, refuse to pay them, besiege people in red tape or delay their having to pay via an “exclusion/elimination period.” All this undermines the value of this insurance.

In recent years, we have been contacted by many LTCI policyholders who have had policies in effect for 10-20 years and are running into trouble when attempting to open claims. Sadly, this has become a big problem for these older policyholders. However, for those considering a new LTCI policy for themselves, this could be a time to become educated.

Last week, I received a call from a friend’s wife who had thought that their LTCI would start reimbursing them as soon as they needed assistance. Unfortunately, she is one of many people who are unaware of some of the fine print of their plan that delays the initiation and/or reimbursement.  

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Don’t get me wrong, LTCI is a great product, you just need to be educated about its limitations and restrictions so you can make it work for your needs. Two of the items of LTCI policies people should be particularly aware of are ADLs and “exclusion” or “elimination” periods.”

Most often, to open a claim, a claimant needs to prove to the insurance company that they are deficient in several activities of daily living and that they meet the “exclusion/elimination” period requirements. Activities of daily living are those skills required to manage one’s basic physical needs. LTCI policies frequently state that a claimant must be unable to perform two or more activities of daily living for a claim to be opened. Activities of daily living to be considered in determining eligibility are bathing, dressing, toileting, transferring, and eating. Most newer policies explain each activity of daily living as follows:

  • Bathing: The ability to sponge bathe or get in and out of the bathtub or shower.
  • Eating: The ability to feed oneself by getting food into the body or by a feeding tube.
  • Continence: The ability to maintain control of bladder and bowel functions.
  • Toileting: The ability to get to and from the toilet and perform associated personal hygiene.
  • Dressing: The ability to put on and remove all items of clothing and any braces or artificial limbs.
  • Transferring: The ability to get in and out of bed, chair or wheelchair.

For the most part, the definition of activities of daily living has remained the same over time. However, the one activity of daily living that many new policies have modified is eating. Many older policies had defined eating more broadly as, “The ability to feed oneself.” The concern with the change in definition is that the newer definition is far more limiting.

This change in definition dramatically narrows the ability of many people to show a deficiency. While a person may be able to perform the process of feeding oneself by getting food into the body, they may not be physically or mentally able to prepare a meal.

For example, a stroke patient may not physically be able to prepare a meal and a person with cognitive impairment may not recall how to prepare a meal, heat up a meal, or even recall turning off the burners on a range top — thus creating a safety concern. Further, this newer definition does not take into account the possible challenges of shopping for groceries, recalling what items they need, or even challenges traveling to the grocery store.

The exclusion/elimination period is another fine print detail of LTCI policies people should better familiarize themselves with. An exclusion/elimination period is a period of time that must pass before someone can start receiving payment for services. It is an imposed period of time people will pay for their own long-term care expenses until the insurance company steps in to pay. Basically, the exclusion/elimination period is similar to that of a deductible in a health insurance plan.

While the deductible of a health insurance plan is a monetary amount that must be met before an insurance company will fully pay for service, the exclusion/elimination of an LTCI plan is measured in days. The unfortunate difference here is that the deductible of a health insurance plan can be met immediately by paying the deductible. Conversely, the exclusion/elimination of an LTCI plan must be met in a period of time — days. With exclusion/elimination periods frequently ranging between 15 and 90 days (90 days is the most common length), this could be a very trying time for both patient and family members supporting their loved ones.

It is not by mistake or without intent that LTCI insurance premiums and exclusion/elimination periods have an inverse relationship. The shorter the elimination period, the higher the premium will be. While the longer the elimination period, the lower the premium will be.

When considering the purchase of an LTCI policy or needing to open a claim, make sure you understand the following elements of an LTCI policy: What it will and will not cover.

  1. What is the daily/weekly amount of coverage?
  2. What are the terms/qualifications for opening a claim?
  3. What is the “elimination” or “exclusion” period?

Undoubtedly, LTCI can be a wonderful thing, and thousands of policyholders would tell you truthfully that their policy has been a lifesaver during their time of need.

Judson Haims is the owner of Visiting Angels Home Care in Eagle County. He is an advocate for our elderly and available to answer questions. His contact information is and 970-328-5526.

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