A widow who paid long-term care insurance premiums for 23 years had her claim denied after the insurer’s nurse assessed her as not needing “substantial assistance” with bathing and dressing, despite her doctor’s confirmation that she required help with these activities. The median cost of a private nursing home room is $10,798 per month, according to CareScout, highlighting the significant financial stakes involved in long-term care insurance claims.
The bottom line is that the insurer’s assessment of the policyholder’s needs can override the doctor’s recommendation, leaving the policyholder with a substantial bill. By the numbers, the national median cost for a private nursing home room is $10,798 per month, which can quickly deplete a person’s savings. Investors will note that the cost of long-term care can be a significant burden on individuals and their families, making it essential to understand how long-term care insurance works and how claims are assessed.
How Long-Term Care Insurance Works
Long-term care insurance is designed to help individuals pay for the costs associated with long-term care, which can include nursing home care, assisted living, and home care. Tax-qualified long-term care policies require the policyholder to meet the federal definition of a “chronically ill individual,” which means they must be unable to perform at least two activities of daily living (ADLs) without substantial assistance for at least 90 days. The six ADLs are bathing, dressing, eating, toileting, continence, and transferring. About 70% of individuals over 65 will require some type of long-term care services during their lifetime, according to the National Center for Health Statistics.
The “Two of Six” ADL Rule
The “Two of Six” ADL rule is a key factor in determining whether a policyholder is eligible for benefits. The insurer’s nurse will assess the policyholder’s ability to perform these activities and determine whether they require substantial assistance. In the case of the widow mentioned earlier, the insurer’s nurse determined that she did not require substantial assistance with bathing and dressing, despite her doctor’s confirmation that she needed help with these activities.
Financial Stakes
At-home care can also be expensive, with a skilled nurse costing a median of $90 per hour. Dave Ramsey advises virtually everyone to secure long-term care coverage by age 59 or 60 to avoid depending on the government. The cost of long-term care can quickly deplete a person’s savings, making it essential to have a plan in place to pay for these expenses.
Policyholder Protections
Policyholders can protect themselves by documenting their daily care needs thoroughly and obtaining detailed physician statements specifying “substantial assistance.” They should also understand the appeal process and know how to navigate it if their claim is denied. It is essential to work with a qualified insurance professional to ensure that the policy is tailored to their needs and that they understand the terms and conditions of the policy. The figure that matters is the cost of long-term care, and policyholders must be prepared to pay for these expenses to avoid depleting their savings.
As Dave Ramsey notes, having long-term care coverage in place can mean the difference between living with dignity and having to depend on the government. Talk to your doctor or financial advisor to determine the best course of action for your individual circumstances.
Sources
- Her Own Doctor Will Write That She Needs Help Bathing and Dressing. The Insurer She's Paid for 23 Years Will Send Its Own Nurse, Who Will Decide She Doesn't, and the $10,800 Nursing Home Bill Will Stay Hers
- Long-term care insurance
- What to know about long-term care insurance
- Interactions Between Long-Term Care and Healthcare
- Dave Ramsey wants 'virtually everyone' covered for long-term care by 60, or they may end up depending on the government
- To everyone who thinks more services will become available: Your limit will increase, but your actual financial burden will also increase!｜暮らしの架け橋｜理学療法士・ケアマネ・FP
Photo: Vlad Deep / Unsplash (Unsplash License)
