What Does Long-Term Care Insurance Cover? And Not Cover?

A great many people think that if you get sick or disabled when you’re old, Long-Term Care Insurance will take care of you forever.

Unfortunately, that’s not so. Typically, what Long-Term Care Insurance covers are chronic (persistent) conditions that last for at least 90 days.

Illnesses or injuries that are not persistent, and do not last for at least 90 days, probably will NOT be covered.

For most long-term care policies to pay a claim, one of two conditions must exist:

  1. The patient must need help with two or more Activities of Daily Living. These activities are commonly listed as
  • Bathing …
  • Dressing …
  • Mobility …
  • Toileting (keeping yourself clean) …
  • Continence (going to the bathroom) … and
  • Eating.

2. The patient must have a diagnosis of cognitive impairment – such as dementia or Alzheimer’s – that reaches a point where the patient becomes a danger to their own health and safety.

Starting a Claim …

When someone contacts us to see if they can start a claim on their Long-Term Care Insurance policy, we typically order an assessment of their health.  This is often performed by a local home care agency or, if the patient is in an assisted living facility or similar environment, by someone in that facility.

The assessment involves a memory test for cognitive abilities, and  observation on whether the patient needs help with any of the Activities of Daily Living listed above.  If these tests show that the patient has memory loss to the point where they are a danger to their own health or safety, or that they need help with two or more of those Activities, then the Long-Term Care Insurance policy will typically kick in and pay the claim.

An Example

I recently received a phone call about a man who had had a stroke.  His wife would be out of the country for several weeks, and she wanted someone to stay with him.  Would their Long-Term Care Insurance policy pay for such a companion? During the assessment, we found that despite the stroke, this man had good cognitive skills, that he was independent, and that he did not need help with any of the Activities of Daily Living.

So because he did not meet either of the two criteria, the insurance company would not pay to have someone stay with him while his wife was away.

Not Even Medicare …

Many people are under the impression that Medicare will cover all their long-term care costs. Unfortunately, that’s not so, either.  Medicare pays for medically necessary conditions, not for long-term chronic conditions.

Typically, “medically necessary” describes those conditions from which patients can recover and return to their original condition (or close to it) before the accident, injury, or illness … but who need the help of a nurse or therapist to do so.

For example, Medicare would usually cover your costs if you fell and broke a hip, had hip surgery, and then needed therapy to learn how to walk again.  Because the surgery and therapy enable you to resume your ability to walk, that’s not defined as a long-term chronic condition. In this case, an Long-Term Care Insurance policy would not pay for the surgery or therapy.

But let’s assume that someone has dementia or Alzheimer’s.  Even if a nurse or therapist worked 24/7/365 with such patients, they could not get back to their pre-dementia or pre-Alzheimer’s state, because dementia and Alzheimer’s are long-term chronic diseases that worsen over time.

In this case, then, Medicare would not cover the cost of therapy or the cost of a nurse.  A Long-Term Care Insurance policy, however, would pick up the cost of care, as long as the patient meets the conditions originally stipulated in the policy for paying of the claim.

Bottom Line …

Do not rely on Medicare for the Long Term Care Insurance that almost 70% of Americans will need after age 65! Ask about a policy for yourself and your family … the younger you are, the less it costs.

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