Did that title catch your attention? If you served in the military, then it likely made you snicker, didn't it? [For those non-veterans, "Snafu" is one of many unofficial military acronyms. Hint: The "Sna" stands for "Situation normal all..." and you probably can guess the rest.] Fortunately, for purposes of blogging decorum, I didn't include that acronym gratuitously. No, I borrowed from the title of a recent piece in none other The (normally buttoned-up) Wall Street Journal.
According to The Wall Street Journal (The Latest Long-Term Care Snafu), some families are encountering claims-denials that can prevent or delay the collection of benefits. Approximately eight million Americans own long-term care (nursing home) insurance, purchased to help cover the escalating costs of long-term nursing care – whether in-home care, assisted living, or nursing home care. These long-term types of nursing care typically are not covered by Medicare or Medicaid.
If you have purchased a long-term care insurance policy, there are steps you can take to help avoid this problem (and unpleasant surprises). Most importantly, be sure to re-read fine print of your policy before hiring a caregiver or entering a facility. In some cases, it also may make sense to get an agent or geriatric-care manager to help in preparing your claims.
All that noted, be particularly vigilant if your policy was purchased before 1997. Older policies often include requirements such as a three-day hospital stay before they will pay for nursing home care. These types of stipulations can exclude many people for receiving care, especially those who are physically healthy, but still require care, such as Alzheimer’s patients.
Federal law requires tax-qualified long-term care contracts issued since 1997 to pay benefits under two conditions: when policyholders are unable to perform two out of six basic “activities of daily living,” such as dressing or bathing, or when they have a cognitive impairment requiring “substantial supervision.” For virtually all policies sold today, a health-care professional, such as a doctor or nurse, must certify that the disability is expected to last at least 90 days.
Sidebar: Gretchen and I purchased our long-term care insurance policies several years ago. That way we locked in our premium rate based on our ages when the policies were issued. Even if premiums increase in the future, our premium increases will be based on those "issue ages"... not on our "attained ages." Moreover, we ensured that our policies cover in-home and assisted living, as well as nursing home care. It is great peace of mind knowing that we are protected from long-term care impoverishment.
To learn more, be sure to visit the Long Term Care Practice Center on our website. If you are currently evaluating a long-term care insurance policy and would like an objective evaluation of your policy terms, please call our office for a consultation. Or use the handy request form on our website and someone from our office will call you.