Long Term Care Insurance – Getting Paid Takes Work

Long-Term Care (LTC) insurance can be a sensible purchase for folks who expect that they will need caregivers as they grow older.  Unless you are very poor and eligible for Medicaid, or very wealthy and can afford to spend a significant portion of that wealth on caregivers, LTC insurance is worth considering.  Once they’ve paid years of premiums, consumers rightly expect that their LTC insurance policy will pay for this care, whether it is at home or in a facility.

Unfortunately, the vendors of these policies use almost every weapon in their arsenal to avoid paying benefits.  In the past year, I have been working with a family who bought long-term care insurance coverage for both husband and wife many years ago.  They had been paying the monthly premiums regularly.  By the time they needed to trigger the policy for their care needs, they had paid over $100,000 in premiums.

One would expect that the insurance carrier, having been paid so much money, would make it easy for this family and the care providers to obtain the benefits.  Sadly, the opposite was true.

For example, invoices from the in-home care agency were mysteriously “lost.” Multiple times.  The two fax machines that are designated to receive the invoices are over-worked and frequently out of service.  The processing times are so long that it takes months before we can determine if an invoice has even been received.  The ability of Customer Service to actually help solve a problem is inconsistent at best.

I have been told by my client’s in-home care provider that this is not unique to my client, or to their insurance carrier.  This provider has the same problems with most of the carriers, for most of her clients.

Why do insurance providers make it so difficult to navigate their systems to collect the benefits for which consumers have already paid thousands of dollars?

Basically, insurance is about gambling.  The insurance companies gamble that they can take in more money in premiums than they pay out in benefits.  They put low-cost systems in place that make it more challenging for their policy-holders to track and receive all the payments for which they are eligible.

In the case of my clients, the wife passed away mere months after beginning to receive benefits.  By rough calculations, the insurance company collected $60,000 more than they paid out on her case.  In reality, it took months of repeated faxes, phone calls and escalations to managers to actually generate the payments that were finally made.

Thousands of policy-holders do not have the time, mental acuity or energy to persist in their efforts to force the insurance carriers to pay up.  So the most vulnerable – sick, elderly people – are, once again, taken advantage of by the companies that are entrusted with their financial care.  Why are we not surprised?

Become a smart consumer.  For more information, you can download a free brochure from the Society of Certified Senior Advisors as well as other excellent resources in their public library.

Submitted by Debora Harvey, Patient Navigator LLC