When do I Become Eligible to go on Long Term Care Insurance Claim?


How benefits are triggered has changed dramatically throughout the years. In general, we can make two categories of policies: those issued before 1/1/97, or pre-HIPAA (Health Insurance Portability and Accountability Act), and post-HIPAA (issued on or after 1/1/97).

Virtually every long term care policy ties benefit eligibility into loss of ADLs (activities of daily living: bathing, dressing, eating, continence, toileting, transferring), and/or cognitive impairment. This indication of a need for care may not be enough to establish care payment eligibility, which usually requires an element of time first be satisfied (such as 0 or 90 days), and often adds a requirement that a specifically-licensed type of caregiver must be employed for the time requirement to be satisfied. For example, a policy may say that you are eligible to receive benefits if you suffer a loss of at least 2 ADLs for more than 30 days, and you must have paid for 30 days of licensed care before your policy benefit starts. Some policies have a day one start for home care. Others will credit a week of care days if you pay for one day of licensed home care.

Pre-HIPAA (1/1/97) policies sometimes had a third benefit eligibility trigger: medical necessity. Note that the insured can trigger benefit eligibility by satisfying and one of the triggers. Much earlier generation policies (such as those sold in the 1970s and 1980s) bear little resemblance to modern policies, and often include a hospitalization requirement in order to trigger benefits. They may even exclude cognitive impairment claims such as Alzheimer's. Since those policies were issued in a time when there were few assisted living facilities, and only very limited professional home care for chronic long term care needs, often these policies do not cover assisted living costs or custodial home care workers. Post-HIPAA (1/1/97) policies are almost all compliant with the HIPAA standards. If a policy is HIPAA-compliant, the policy will state that it is a "Qualified" policy. The policy form number will often include "Q". Non-qualified (or "NQ") indicates that a policy is not compliant. Your insurance company can tell you if a policy is Qualified or Nonqualified. Qualified policies are eligible for tax advantages, and also include standard benefit triggers (a loss of at least 2 ADLs or severe cognitive impairment). Qualified policies also require that a medical person certify that the insured's condition is expected to last at least 90 days, before the insured is eligible for any claims payment. For example, someone with a claim expected to last 6 weeks, with a 30 day elimination period (deductible), would not be eligible for payment under a Qualified policy, while they could be eligible for payment under a pre-HIPAA policy.


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