Long-term care insurance and dementia

Why dementia often triggers long-term care insurance

Most long-term care insurance sold today is “tax-qualified,” which means its benefit triggers follow a federal definition of a chronically ill person (26 U.S. Code § 7702B). Under that definition, a licensed health care practitioner must certify, within the past 12 months, that the insured person either:

• cannot perform at least two of six activities of daily living (eating, toileting, transferring, bathing, dressing and continence) without substantial help, for an expected period of at least 90 days, or

• needs substantial supervision to protect their health and safety because of severe cognitive impairment.

That second trigger matters for dementia. Your loved one may still be able to bathe and dress, but if they get lost, leave the stove on or cannot be left alone safely, they may meet the cognitive trigger. Older or non-qualified policies can use different wording, so find the “benefit eligibility” or “benefit trigger” section of your loved one’s policy and read it word for word. See our glossary entry on activities of daily living.

The elimination period

The elimination period works like a deductible measured in time: the number of days you pay for care yourself before the policy starts paying. Washington State’s insurance regulator notes that elimination periods range from zero to 180 days, and shorter periods cost more in premiums. Questions to answer from the policy:

• How many days is the elimination period?
• Does it count calendar days from when your loved one became eligible, or only days on which paid care was received? With part-time home care, this makes a big difference.
• Is it satisfied once per lifetime, or again after each break in care?
• Does the policy treat home care differently from facility care when counting the elimination period?

Because the clock usually starts only after the benefit trigger is certified, it pays to start the claim process as soon as your loved one may qualify, even if you are paying for care yourself for now.

Does it cover companion or homemaker care?

It depends on the policy. Many policies pay for care at home, in adult day programs, in assisted living and in nursing homes, but what counts as covered “home care” varies. Look for:

The federal Administration for Community Living describes typical policies as reimbursing care costs up to a preselected daily limit. If your loved one’s policy is unclear, call the insurer and ask directly: “Is non-medical companion or homemaker care from a private-pay agency a covered home care service under this policy?” Ask them to put the answer in writing.

How to file a long-term care insurance claim

1. Call the insurer and request a claim packet. Have the policy number ready. If you are filing as a family member, you will likely need a power of attorney or the policyholder’s authorization.

   

2. Complete the policyholder statement describing why care is needed and what care has been received so far.

3. Ask your loved one’s doctor for the attending physician statement, including the dementia diagnosis, cognitive testing and notes that document the need for supervision.

4. Expect a nursing assessment. Many insurers send a nurse to assess your loved one and create or approve a plan of care.

5. Submit the provider statement from the care provider. Some insurers ask for proof of the provider’s qualifications or licensure, so ask the insurer what they require.

6. Sign the authorization to release medical information, and complete any phone interview.

7. Submit invoices regularly once approved. The insurer either pays the provider or reimburses you.

Insurers commonly take around 30 days to respond to a claim. Keep copies of everything and a log of every call, with the date and the representative’s name.

What to ask any care provider for

Whichever provider you choose, ask for itemized invoices (dates, hours, rate and services provided) and visit notes describing what was done and how your loved one was doing. Insurers often want this documentation, and it also helps when the benefit is reviewed. Dementia Companions is private-pay and does not bill insurers directly, but we provide itemized invoices and a brief note after every visit that families can submit with their claim. Whether your policy reimburses our services depends on its terms.

If the claim is denied

Ask for the denial and the policy provision it relies on in writing. Common fixable problems include missing doctor documentation of cognitive impairment, a plan of care that does not mention supervision, or provider paperwork the insurer did not receive. Ask the insurer how to appeal and what deadline applies, and send any missing documents with your appeal.

For how insurance fits with other sources, see our paying for dementia care overview, the VA benefits guide and the Florida cost guide. You can estimate how long a policy’s benefit pool might last with our cost calculator.

This page is general information, not insurance or legal advice. Your policy’s own wording controls.