Long Term Care Benefits – 3 Things to know
All Stat Home Health has been in business for 30 years, specializing in the processing of Long Term Care Benefits for clients and their families. Policies vary from Insurance Company to Insurance Company but there are some consistent components that you should be aware of when purchasing or using your Long Term Care Policy. Below we will discuss 3 Things to know about Long Term Care Benefits.
A Long Term Care Policy generally provides a cash benefit that can be used for Home Health Care, Assisted Living Care or Skilled Nursing Care. It is “Long Term Care” because it covers care over time as a client transitions through the health care continuum from Home to Assisted Living to Skilled Nursing.
Today we will be discussing Long Term Care Benefits as they apply to Home Health Care but the benefits structure is very similar for working with Assisted Living Facilities or even Skilled Nursing Homes. While some policy benefits may vary these examples reflect the most common structures for Long Term Care Policies.
1 Maximum Daily Benefits
All Policies have a dollar amount that they will pay for services. This is defined as the Daily Maximum Benefit or the maximum amount that they will pay each day for service. Policies can actually specify this as a “Daily” Maximum, a “Weekly” Maximum or a “Monthly Maximum” Benefit.
A “Daily” Maximum is the most straight forward as it clearly defines how much the insurance policy will pay per day. An example is $100/day. The policy will pay 100% of the charges up to the daily maximum of $100. If the cost of care is $50 it should be paid in full. If the cost for care was $120, the policy will pay $100 leaving a balance of $20 due from the client.
A “Weekly” benefit means that you can use the maximum benefit up to the “Weekly Maximum” regardless of how many days are involved. For example, if a client has a “Weekly” benefit of $700 per week (roughly $100/day), and they have $120 on one particular day, the policy will pay the $120 in full, where the “daily” benefit would have only paid for $100 on the same day. In fact, if the client had 24 hour care for 2 days at a cost of $350 per day, it would still be covered in full since the total cost for the two days would have been $700 which is equal to or less than the Maximum Weekly Benefit of $700.
A “Monthly” benefit provides even greater flexibility. It allows a client to use their entire monthly allocation for any services needed up to the “Monthly” maximum. For example, if the “Monthly” benefit was $3,100 (roughly $100 per day), and the client had 24 hour care for an entire week for a total of $3,100, it should be paid in full. In the same scenario, a policy with a “Weekly” benefit would have only paid $700 towards the expense ($100/day x 7 days = $700).
Most client have consistent care. In those cases, all three Benefit types may be the same. For example, if a client had care for $100 per day, 7 days per week for a month (31 days), all three benefit types would pay the exact same amount of money.
Daily Benefit: $100/day x 31 days = $3,100
Weekly Benefit: $700 per week by 31 days (4 weeks and 2 days)= $3,100
Monthly Benefit: $3,100 per month
However, the added flexibility of a Weekly or Monthly benefit can certainly be helpful for clients by providing them greater flexibility in the use of their benefits.
2 Elimination Period
Most policies have an Elimination Period. The Elimination Period should be thought of as a Deductible but rather than a dollar amount (like is used for Car Insurance of Homeowners Insurance) it is specified as a number of days. The most common periods are 0 days, 14 days, 28 days, 30 days, 60 days, 90 days, 100 days and 180 days.
The Insurance company wants evidence that care has been provided for the elimination period paid by some other source. They don’t care if that source was Medicare, privately by the client or another insurance policy. The insurance company benefit begins once the Elimination Period has been met. For example, if a client has a 30 day elimination period, the insurance company will want to see proof that care was provided for 30 days and then the insurance company will begin making payment as of the 31st day.
Generally insurance companies will allow days of care provided in a Rehabilitation Center or Nursing Home prior to the claim to be counted towards the elimination days. For example, if a client has a 30 day elimination and was in a Rehab Center for 25 days and then discharged to home, the insurance company will allow the 25 days to count towards the elimination period and only require the client to show proof of an additional 5 days of service at home before the policy begins to pay for coverage.
Most insurance companies will also allow days from Medicare Home Health or other structured home health care to be considered towards the elimination days. Days from Hospitalization, days from outpatient rehab and doctors visits do NOT count towards the elimination period.
3 ADL’s or Activities of Daily Living
In order for a Long Term Care Insurance Company to pay benefits, the client generally needs to have care from a Licensed Home Heath Agency that documents that the client received assistance with at least 2 Activities of Daily Living (ADLs). These include:
• Assistance with Bathing or Showering
• Assistance with Dressing or Undressing
• Assistance with transferring from one location to another (wheelchair, bed, chair)
• Assistance with toileting including incontinence care
• Assistance with feeding (predominantly for stroke patients who cannot feed themselves)
Normally this level of care is provided by a Home Health Aide (HHA), Certified Nursing Assistant (CNA) or Personal Care Assistant (PCA). Their training is in personal care and body mechanics to allow them to safely provide these services.
The reason that days of care in a Rehabilitation Center or Skilled Nursing Unit apply to the Elimination Period is that by definition, they are providing assistance with at least 2 ADL’s as indicated above.
Days of care from Medicare Home Health can be considered towards the Elimination Period but may or may not count based on whether 2 ADL’s were provided. A good example is when a client receives Physical Therapy at home. This is a very valuable skilled service provided by Medicare Home Health Agencies. However, Physical Therapy, while providing specific hands on therapy, generally does not include any Activities of Daily Living. As a result, the insurance company has the discretion to apply the day towards the elimination period or not.
Conversely, if a Medicare Home Health Agency provides a bathing visit that includes assistance with bathing and dressing, that day should count towards the Elimination period.
For clients who did not have a Rehabilitation stay and did not have prior Home Health care, the insurance company will want proof that the client incurred expenses for the elimination days. These days are then provided by a private duty Home Health Agency under agreement with the client.
<strong>3 days = 7 Component</strong>
Some policies include a component that says that if a client has care for 3 days per week, the insurance company will count it as 7 days towards the elimination period. This can be a great cost savings for clients with longer elimination periods. For example, a client with a 90 day elimination period that included a 3 days = 7 days component would only need to have care for 39 actual days of care to meet their elimination period (90 days / 7 days per week = 13 weeks, 13 weeks x 3 days per week = 39 days). This can be a tremendous cost savings to the client and the family.
We have just touched on a few of the key components of Long Term Care Policies. In future Blogs we will discuss other ways to better utilize your policy and things to consider before purchasing a policy.
For questions or comments on your particular policy or situation please call us at 941-923-0880 or refer to our website at All Stat Home Health.