Long term care insurance is a product that pays for elderly care once an individual is unable to care for themselves. The idea is simple: make insurance payments when you are younger and healthier, and the insurance company will pick up the financial tab when you need to hire someone to help you or a loved one. It works similar to life insurance, except the individual does not need to pass away and there is no death benefit.
The problem for many elderly people with long term care insurance is that the insurance companies are often slow to pay out claims or deny claims altogether for what many individuals believe are erroneous reasons.
A claim may be denied because paperwork was not filled out correctly, or payment may be delayed for different administrative reasons. It can be difficult to get things through, similar to a disability income insurance claim.
The State of Oregon has addressed these concerns by passing new legislation which puts tighter rules on insurance companies and their requirements to make payments. In the past, the only way an individual or family could dispute a denied claim was through the courts. Many elderly people are unable to go through that process due to health reasons, and it gave the insurance companies an easy out when it came to non-payment.
The new law allows for a simpler dispute process. In addition, claims that are undisputed by the insurance company are required to be paid out within 30 days, ensuring that individuals and families get the financial assistance when they need it most.
Insurance companies claim that the rules for their policies are clearly laid out in the contract, and that many of the delays are due to improper forms being submitted or not being completed in their entirety. Additionally, they claim that sometimes people do not verify specific things are covered before actually going out and getting them setup.
The State of Oregon’s new legislation is being used as a model for other States around the country. The National Association of Insurance Commissioners has used the new law and created a template for other States to use. The biggest hurdle is getting them passed.