Long-term care insurance: finding the policy and getting it to pay

Find it first

Policies bought in the 1990s and 2000s are often forgotten. Look in the file cabinet, ask the insurance agent or financial advisor, and check bank statements for a premium that is paid once a year. If the insurer has changed names, the New York Department of Financial Services can help you trace it. Do this before the first tour, because communities and agencies will want the policy number to bill.

The words on the policy

• Daily or monthly benefit: the most the policy pays per day or month.
• Benefit period or pool: how long, or how much in total, it will pay.
• Elimination period: the number of days you pay yourself before benefits start, often 30 to 100.
• Benefit triggers: usually needing help with a set number of activities of daily living, or needing supervision because of cognitive impairment. A doctor or nurse assessment proves it.
• Covered settings: home care, assisted living, nursing home, adult day. Some older policies cover only nursing homes, or require a licensed agency.
• Inflation rider: whether the benefit has grown since purchase.

Starting a claim

Call the claims number on the policy and ask for the claim packet. Expect a form for the doctor, a care plan, and an assessment arranged by the insurer. Keep every receipt from the day care starts, because the elimination period often counts days of paid care. Ask the community or agency whether they will bill the insurer directly or you pay and get reimbursed. Claims take weeks; start early and keep a log of every call.

If premiums are a problem

Insurers can raise premiums with state approval, and rate increase letters are common. Options usually include paying the new rate, reducing the benefit, or a reduced paid-up benefit. Do not let a policy lapse without reading the letter's options. New York's Department of Financial Services consumer line, 1-800-342-3736, takes rate increase questions.

New York Partnership policies

Some New Yorkers bought a Partnership for Long-Term Care policy. When the policy's benefits are used according to the program's rules, the person can apply for Medicaid Extended Coverage and keep some or all of their assets, depending on the plan type. No new Partnership policies have been sold since January 1, 2021, but existing ones still count. If the policy says Partnership on it, tell your elder law attorney.

A tax note

New York offers a tax credit of 20 percent of premiums paid for a qualifying long-term care policy, capped at $1,500 for individuals, for taxpayers with New York adjusted gross income under $250,000 (state rules as posted; check the current form). Federal rules treat qualified premiums as a medical expense within age-based limits. A tax preparer can tell you what applies.

Questions to ask the insurer

• What triggers benefits under this policy, and who does the assessment?
• How long is the elimination period, and what counts toward it?
• Does the policy cover assisted living in New York, and does the community need a particular license?
• Will you pay the provider directly?
• Is this a Partnership policy?