Understanding Denials of Long-Term Care Insurance Involving Coverage Triggers

When individuals purchase long-term care insurance, they typically have a range of motivations that include estate planning to protect their financial legacy and providing financial resources to cover the exorbitant cost of in-home care or a residential facility, such as a nursing home.  There are many reasons that an insurance company might deny long-term care benefits.  Below we provide an overview of two common issues raised regarding the triggering of benefits under this type of policy.

Carrier Disregards the “Medical Necessity” Trigger

There are a number of different factors that can trigger coverage under most long-term care policies.  The trigger provision, which is most favorable to an insured, involves “medical necessity.”  The term “medical necessity” generally is defined as requiring covered care due to illness or injury.  The care ordered by a physician must be in accordance with generally accepted medical standards for the specific medical condition.  The medical necessity provision often will specify that the treatment regime could not have been avoided without adverse impact on the insured’s condition. 

Because the broad language of these provisions often will result in coverage being triggered, insurance companies frequently ignore this provision and rely on other triggers to deny coverage.  For example, the insurer will send a denial letter that references the ability of the policyholder to perform most or all of the Activities of Daily Living (ADLs).  The insurance company will often couple this response with reference to the fact that the insured is not cognitively impaired.  Although these are alternate triggering provisions, they do not trump the medical necessity provision.  If an insured has had the claim denied based on these grounds, we often respond by indicating that our insured is seeking coverage based on the medical necessity trigger.  Our response will direct the insurance company to indicate any basis the company is relying on to dispute coverage under this provision.

Insurer Claims Evidence Demonstrates Insured Can Perform ADLs.

While the medical necessity trigger might be the most common basis for coverage under a long-term care policy, impairment of functional capacity is another important basis for benefits.  This type of trigger provision involves an evaluation of the insured’s ability to perform “activities of daily living.”  The precise definition of ADLs will be determined by the specific policy, but typically they will include eating, bathing, transferring, toileting, dressing, and continence.  The insurer will have a physician conduct an evaluation to determine a policyholder’s ability to perform a certain number of ADLs. 

Under most policies, the insured will receive benefits if he or she is unable to perform two of these tasks, but specific policies can differ in this regard.  A key distinction is whether a policy permits consideration of an insured’s ability to perform ADLs with standby assistance or actual hands-on assistance.  Although some policies permit coverage if the insured needs someone available to provide assistance if needed, other policies only consider an ADL toward triggering coverage if actual physical hands-on assistance is required for the insured to perform the task. 

When considering long-term care policies, consumers also should carefully review the precise ADLs that are considered as a trigger for benefits.  Generally, the more types of ADLs the better.  Further, policies that identify bathing as an ADL are favorable to policyholders because this is usually the first ADL that an insured cannot perform.

If you have questions about long-term care claims, our Miami insurance claims law firm has represented many policyholders in claims disputes involving a multitude of types of insurance, including homeowner’s insurance, commercial insurance, long-term disability insurance, life insurance, and auto insurance.  Our Miami insurance claims firm invites you to contact us if you are having difficulties with your insurance company.  Florida insurance claims lawyer J.P. Gonzalez-Sirgo handles claims against insurance companies in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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