What triggers my Long Term Care Policy to begin paying benefits?

Long Term Care Insurance (LTCI) will begin paying a claim when the insured is certified as eligible for care. The general rule is that two activities of daily living (ADL) must require assistance in order for someone to become eligible to go on claim. Often people are certified as eligible for claims while they are still living in their own home with assistance from others, which is one reason the home care component of LTCI is so important to most buyers.

ADLs include the ability to dress oneself, toilet on your own, feeding oneself, transfer oneself, maintain continence, and bathing oneself. These are areas where a certified aid or someone with proper training can easily help make these things possible.  However without help the person in need of assistance will usually slip further away from independence and more towards dependence on others for more things.

A physician is typically involved in the process of certifying that someone needs help with their ADLs.  This is the first step in getting the claim process moving forward.  A formal request to the carrier to go on claim is needed. What that does is get their case/care manager team involved to review the needs both what the physician certified as well as other information about living conditions etc… The care manager has some leeway towards helping with things other than just paying for care to ensure appropriate care is in place.

Once the insurance carrier agrees all triggers are met to go on claim, it will depend if you are on at home or institutional care along with the provision of your insurance contract to determine your elimination period. The elimination period is akin to a deductible for other kinds of insurance but here measures not spent dollars but the number of days care is received or the number of days there was a need for care.  Depending on riders etc. the measures used can differ.

When you set up your policy you will choose an elimination period from zero to one hundred eighty days. The in home care and facility care elimination periods are on a standard basis the same, however virtually all policies are written to include a rider putting the home care elimination period to fewer days or in some cases none. 

Once you are then past the elimination period you will begin receiving benefits based on the actual amount spent on your care. Because you are accessing a pot of money for the care, the longer that you can stretch the care dollars the longer you have help or even total payments made for your care.  Typically each month the insurance company will reimburse for expenses paid, although depending on various circumstances there are more than one option for how the claim benefits can and will be paid out.

Reasons your life insurance may not pay out

Life insurance claims are generally paid once proof-of-death is supplied. There are a few times when the payment is going to be delayed or possibly not made to beneficiaries. Delays are more common than non-payment of benefits.

There are various reasons where the death requires further investigation and other reasons that will cause a decline of payment. Let’s first look at the reasons your life insurance will not pay a claim. They are fairly easy to define and most make total sense to everyone.  Generally you can look at the exclusions section of the life insurance contract and quickly see what would cause a non-payment of life insurance claim.  To get a bit more detail here, suicide within two years of the insurance policy issue, death while committing a felony, or death at the hands of the beneficiary are three big reasons that most insurance policies will be able to not make a claims payment.

The above reasons will definitely delay the payment of a claim while they decide to pay or not the claim. In addition, suspicious deaths, mysterious disappearance, and when there is questions about who may be responsible for the death of the insured will all hold up payment of the claim as it is investigated. Insurance companies what to make sure before they pay a claim it is a valid claim. The same holds true on the property and casualty side of the insurance world. Think about if your house burns down they want to make sure you did not burn it down intentionally. Likewise when a death occurs they need to check various factors.

In most every death claim you will have to supply a death certificate. Depending on if the certificate was signed by a treating physician or the medical examiner may well determine what if any questions are raised by the insurance carrier. The reason is that a treating physician will typically only sign a death certificate of someone they have been treating on a long term ongoing basis where they can really attest to the cause of death. Medical Examiners are more often involved in death involving criminal acts or suspicious deaths where the medical examiner had to investigate the death. They don’t necessarily dig really deep into the cause if they are pretty sure it was not a murder. In some cases they may rule something a suicide when in fact it was not more than an unfortunate accident. In these situations it can lead to significant investigations by the insurance carrier.

Insurance carriers only want to delay and withhold payment where they legally can do so. When the payment was going to the person who killed the insured is typically the biggest reason aside from suicide where they will push to investigate and not pay a claim. Of course any other situation where fraud may have occurred such as someone knew they were diagnosed with a  terminal disease applies for coverage and get it issued without disclosing that issue. Fraud like that will also cause the policy to be terminated with only premiums paid going back to the beneficiary.

All of this just helps folks understand that doing something in hopes of a low cost large payout using life insurance will just not work long term. Instead those seeking to bend the rules for a large payout will not get it.  That is not to say a legitimate death soon after a plan purchase will be inaccurately declined, it will be paid when legitimate.

Using a good life insurnace agent may help avoid some of the issues mentioned above.

Does my out of network expenditures count towards my in-network deductible?

Out of network expenses may or may not count towards in-network totals. This is something that we will see continue to change as plans look to further control healthcare expenses. Let’s look at the various possibilities.

Insurance carriers recommend how to design plans to those self insured groups with whom they work. For plans where they are fully insuring the members they make the decision on plan design. What this means is we can see within the same insurance carrier (who is listed on ID cards) different plan designs. The reason for this is how tightly the financially responsible party wants to control the healthcare expenses incurred.

Generally speaking fully insured plans are already or are moving towards a split between in and out of network expenses where one never helps cover any of the costs for the other. Thus, if you incur out of network expenses that are totally on top of in-network care you receive. What does this do to your out of pocket expenses?

Generally, out-of-network care limits are twice the in-network care cost limits. So if you use out of network providers extensively along with in network providers, it’s possible to end up spending three times or more your in network deductible before you are just on cost sharing. The total costs for out of network in some plans are quite high, so in the scenario where you are using both in and out of network providers you can really end up spending a lot more money than you planned to spend on healthcare for the year.

If you have a plan design not changed in a while it is possible your plan may still allow out of network care costs to count also towards in network deductibles. This is becoming more reare. When it does happen, if you hit the out of network deductible, you will also have met your, in-network deductible as well which helps keep the total costs in check for you.  These plans are rarer these days as healthcare costs continue to spiral out of control. Most plans do not work that way.

Most plans keep the in and out of network costs separate. It is all about making the cost difference between in and out of network care so significant there becomes a serious financial incentive to use in network provider. Part of it is the fact that out of network providers can collect any amount they want and insurance will only reimburse, or accept towards the deductible the amount they deem the “allowable.”  

Allowable levels are becoming better defined by the insurance carriers and communicated to the members. Often they are the same or only slightly more than is paid to an in-network provider. So the use of an out-of-network provider results in a portion of the cost going to the deductible while you may pay multiples of that amount for the actual care received. You also end up paying much more for that deductible as well. Overall going out of network these days will really cost you a pretty penny.

How do I know if the doctor in the insurance network is any good?

Choosing a doctor can be tough. Most folks want to pick a doctor who is qualified and considered a good physician. To that end, most folks want to first pick a doctor who is good and secondarily is in the insurance company provider network.  Often though folks want to do the searching for new providers within their network so that raises the question how to know what doctors in the network are quality.

In the business world and medicine in the USA does fall into a business world model, we often see discounts provided by vendors trying to build a client following. There is no real indication of good or bad quality just because some vendor offers a discount. We see discounts from top car makers and even top restaurants at various times. Most vendors often have some excess capacity they want to fill and discounting or offering specials helps fill that void.

Healthcare providers who are new often join every network they can so they are able to fill their appointment books with new patients. Also, many specialist physicians are involved with networks in order to ensure they can see referral patients. As they build referral relationships, they don’t want the new referring physicians to have to give too much thought to what patients they can refer or not refer. Also, physicians often are in networks for the benefit of the patients they serve allowing them to get in-network benefits when receiving care.

Now that we have discusses several reasons physicians may join provider networks, let’s look at how you can pick a good dock from the group of network physicians.  Most of the provider networks now have markers for physicians who meet various criteria that allow them to be held out as better than average physicians. There are a number of ways the insurance companies evaluate who gets their preferential ratings among the various insurance carriers. Typically various educational and board certification requirements are in place. Then for most of them, there are requirements that the provider have treated enough member of the insurance company with good cost effective outcomes.

Cost effective outcomes can be measured more than one way. There is the skeptical way to evaluate it, where keeping costs low is most important while the actual outcomes don’t come into play much. There is a mix where outcome is measured primarily by follow-up treatment needs. Thus care is evaluated around specific major medical conditions or surgical episodes and using various statistics, that give a fair indication of needed care around these incidents before, during and after the episode of care.

Regardless of the way the care is measured, if it is measured the same way for all providers within the carrier, ultimately within a carrier the data is going to remain valid. Using this data as a guide and checking with other physicians you know is ultimately the best way to check on the physicians you want to know about.

I see deals for surgery elsewhere in the world that seem like great deals, what is the catch?

Yes there are some incredible deals for quality care around the world. As we train more doctors in the West who want to return home to their birth country, we see medical centers pop up in India, Thailand, Singapore, China, and other places where locals and foreigners are able to go secure quality healthcare services.

One measure of quality recognized in many places is JCAHO accreditation. This accreditation is required by facilities in the USA if they want to get paid by Medicare and even most other insurance companies. The accreditation looks at a considerable variety of factors that help promote quality care and help control spread of disease within a hospital facility.  Thus at this time it is the Gold Standard.

If you are a cash paying patient, these deals are usually going to save you a large chunk of the cost for the care they offer. These facilities tend to offer care for high cost frequently performed services in the USA, and for that matter other developed countries. These are services where the treating physician was able to learn well that skill in the USA or other Western Country before returning home. Many of the physicians even obtain and maintain board certification and sometimes even spend some of their time in the USA every year.

The reason these deals are good for cash paying customers is that few insurance companies pay for any of these foreign programs. The insurance carriers are growing the list of what they will cover and where.  They may or may not cover the associated travel costs though.  Travel costs and time spent away before and after the procedure all have to be added in from both a cost standpoint as well as a time commitment. Often you have to spend a week or two, sometimes more recovering nearby where the services are reserved.

One thing you tend to find with many of these foreign programs is a very high comfort level at the facilities you use for the surgery. Some even have separate hotel style wings for pre-op and recovery time. The room is sometimes also available for the traveling companion when the person getting surgery is in the hospital wing.  Other programs have you stay at a resort pre/post-operatively. In these cases they may or may not have any provisions for the travel companion during the hospital stay.

Pricing may or may not include a travel companion ticket.  Food costs are often on top of the cost (at least pre/post operatively) for the surgery program.  When an insurer agrees to pay for the program they often do include the cost of a traveling companion and air to the international destination. They do not usually cover the cost of passports though so if you don’t have valid ones you may have to add that cost on to your expenses.

Ultimately there is not much of a catch to these deals on surgery other than most are not covered by insurance. If you have Medicare or Medicaid they definitely are not covered.  You can save quite a bit, and enjoy a nice foreign travel experience, and get quality care when you use these programs.

How do I know if my hospital based providers are in-network or out-of-network, and why may this be important to me?

For folks in Medicare Advantage Plans, PPOs, HMs, and most any other health plan other than original Medicare or Medicaid you need to know and understand the healthcare provider network(s).  These networks are the providers who offer discounts to the insurer and you for accessing care from them. Providers not in the network are paid at a different level and those costs fall into your out of network costs bucket.

To help you understand your health plan and the importance of using network providers let’s look at a couple of examples. First most Health Savings Account based plans have a 2:1 ratio out of network to network costs in order to meet maximum out of pocket costs. Of course there is also the cost above what the insurance carrier allows that can take the out of network costs out of sight.   So if you have a $5000 family in-network deductible the out of network may be $10,000 for the family. Then you add on any above allowable costs before you get to the total out of pocket cost.

Network providers’ costs count towards the in-network (much lower) deductibles. Also, they are not allowed to bill for costs above the contracted rates. That aspect is one key piece of the puzzle that helps keep the total costs in check. Also, the networks help to assure quality of the providers within them, because in theory the providers are processed thru a series of checks and balances to ensure they meet requirements to join the network.

The insurance companies create or rent networks created by network development companies. They use the networks to contract rates with providers both facility and non facility. These contracts establish set reimbursement rates that help control the cost of care. The insurance companies can then model the reimbursement rates against their claims history over a normalized time period. This allows them to evaluate expected claims costs for periods of time going forward. This allows the setting of premiums by the carriers. Thus, all of the plan elements are based on in-network use.

When people use out of network providers it can due to unchecked quality lead to higher overall costs and over utilization in some cases.  For this reason because this can cost the insurer more money than expected they create more cost sharing for the insured to help cover these extra costs.  Thus it is key to know and understand your provider network.

Usually, the best place to check to see if a physician or any other provider is in the network is to go to the insurance company website and look up the provider. Most carriers update the provider list at least once per week, some as often as every night. Of course the provider should be able to answer the question about being in network as well. It is key though to specifically ask if they are In-Network, not just if they accept the insurance.  Most out of network providers will say yes they accept the insurance and you get a rude surprise when the bill comes showing it paid on an out of network basis.

Use of out of network providers will cost you more out of your own pocket, and in these days of high cost for healthcare most folks don’t want to spend any more than needed for quality care. You will also find that you are not protected from above the allowable amount dictated by the insurance company. Thus, if you get care and the charge is $500 and the allowable by the insurance company is $150, in addition to your cost share the provider may demand the $350 over and above the allowable which they are legally able to demand.

Networks are there to help control costs for the insurance company and the insured, so use out of network providers at your own risk.

Does Healthcare Reform help me get coverage if I have medical issues?

Presently Healthcare Reform is in the implementation stages and to a large extent is not fully implemented. It is also facing a decision of constitutionality by the Supreme Court of the United States. These two factors mean we have a long way to go before we have a fully functional law if ever.

The timeline for the law does not call for major changes such as implementing guaranteed issue for all major medical health plans until 2013. Thus for those who currently have major medical issues they must still meet all underwriting criteria for a plan to be issued by the insurance carrier.  Thus, if you have serious medical conditions it is possible there will be no coverage offered.

Presently, in Texas you can always go to the Texas High Risk Pool for help with coverage when you are declined by other carriers.  Many other states have similar programs for those who are otherwise not insurable with traditional health insurance for individuals.

In 2014 if the law stands, you will be able to get coverage, however ratings can be applied so those with major health issued will still likely pay more.  Some of those details are still not fully worked out.  There is a 3:1 ratio that is to be implemented that one person does not pay more than 3 times what anyone else pays in the same geographical are. I expect but have not been told explicitly, that age as well as medical conditions will warrant the differentials in rates.

Ultimately yes, if the healthcare reform act stands, it will help you get coverage, but it will not necessarily make the coverage any less expensive for you.  There are still issues with how the law is structured that allows healthy people to opt out and pay a minimal fine thus making for a riskier pool of folks buying insurance thus higher premiums for those individuals.