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Improving Pennsylvania’s Long-Term Care Insurance Claims Process – Keystone Elder Law – Mechanicsburg, PA

This is the last of a series of four articles.   We have explored how the Pennsylvania Department of Insurance might not be equipped to advocate effectively for claims made by Pennsylvania senior citizens who own long-term care insurance policies.  This shortcoming seems to be especially true for those who seek care from a licensed Personal Care Home for help with two or more activities of daily living, or for dementia care.   The problem seems to be an unintended result of regulatory  confusion created by state regulations administered by the Department of Human Services under Pa. Code Title 55 Chapter 2600, and complicated even more by the new Chapter 2800 regulations, written five years ago, which redefined “assisted living” in Pennsylvania.

Caregivers should be encouraged and empowered to appreciate their use of long-term care insurance to place a loved one in a Personal Care Home as the implementation of a wise plan made many years before.  When a stressed and confused caregiving spouse hears an insurance company label a Personal Care Home as an inappropriate option to care for a spouse with dementia, often no insurance claim is ever made.  Guilt and economic risk diminish the emotional and financial value of long-term care insurance as a tool to broaden caregiving options.

The caregiving spouse is thereby exposed to the risk of stress-induced personal illness or caregiver burnout.  The spouse with dementia might either die at home, or eventually enter the long-term care system as the result of a hospital discharge.   In either event, an opportunity for an at-risk Pennsylvanian to receive care from a Personal Care Home is lost, and a long-term insurance claim is delayed or avoided.

It is hard to measure the statistical frequency of Pennsylvania’s caregivers having their initial telephone call to a long-term insurance company end with an unsatisfactorily chilling response. We know that some caregivers have shared with us they are reduced to tears and feel guilty and stupid when they are told by their long-term insurance company that a licensed Personal Care Home is not an appropriately contemplated facility, and that an alternate plan of care might be considered, but only after admission.   Our experience is that some of those caregivers eventually become desperate enough to move their loved ones with or without insurance coverage, while other caregivers will feel financially unable to do so.

The Insurance Department and the representatives of Personal Care Homes seem to have dismissed the frequency of such claim chilling as inconsequential.   Perhaps some readers who identify with our explanations and have not previously complained should consider sharing their experiences with state legislators.  Even if it is too late to help in their own case, perhaps they can be advocates to help others.

Just because a complaint is filed, unless the Insurance Department’s investigator feels empowered to determine that an insurance company has violated a consumer’s contract or Pennsylvania’s laws, a complainant may not get the desired relief.  Our experience shows that regulatory change is needed to enable, if not require, more assertive advocacy by the Insurance Department.  Otherwise, an insurance company’s claims-reduction strategy may not only be legal, but also a necessary aspect of the insurance company’s fiduciary duty for their shareholders.

My criticism is intended to be constructive.  I offer it both as an owner of long-term care insurance, and as a professional who is licensed to sell it but is not presently doing so.  As an aging taxpayer, I am hopeful that those who can influence Pennsylvania’s long-term care policy will become more assertive and effective advocates to enhance the value of long-term care insurance for seniors who already own it, as well as to provide tax incentives to help financial advisors encourage younger Pennsylvanians to invest in it.

Hopefully a logical conclusion will follow from consideration of a few questions:

When long-term care insurance policies were sold to Pennsylvanians prior to the 2011 implementation of Chapter 2800 Assisted Living Residence regulations, what long-term care facilities existed in Pennsylvania which were “appropriate or contemplated” for “custodial or intermediate care for assisted living?”  Who can reasonably believe that the only facility option was intended to be limited to a licensed skilled nursing home, especially since insurance policies often referred separately to “nursing homes” and “assisted living or custodial care facilities?”

Why did long-term care insurance companies routinely pay in a licensed Personal Care Home with little issue before 2011, when such facilities were permitted to be labeled as an “assisted living facility,” as regulations now prohibit them from doing?

Should not our public officials and agencies be advocates to push back and seize the gray area from insurance companies for the benefit of Pennsylvania’s seniors?

Although I am neither a lobbyist nor profess expertise drafting regulations, I have suggested specific language to representatives of the Personal Care Home industry to revise Pa Code Title 55 Chapter 2600.1 (b) to clarify that Personal Care Homes are appropriate long-term care facilities for residents who require supervised care for dementia or assistance or supervision with activities of daily living. I also have suggested a corresponding change to language of 62 P.S. §1057.3(i) to change that regulation’s confusing restriction which makes it illegal for a Personal Care Home to use the term “assisted living,” which has been restricted for the exclusive use of facilities licensed as Assisted Living Residences under Pa Code Title 55 Chapter 2800.  Instead, why not allow those facilities the exclusive use of the term “age in place?”

I perceive and appreciate that many people invested much time and thought to create an age-in-place opportunity.  Various motivations have been reported.  If Assisted Living Residences had been labeled as an Aging In Place Residences, much confusion could have been avoided.

Although regulatory improvements seem to be possible, informed and assertive consumers can improve their chances of getting paid on a long-term care insurance claim.

By Dave Nesbit, Attorney