A new survey of long term care insurance carriers finds only about 3.3% of LTC claims are denied.
Data from 39 companies for 2005, compiled by America’s Health Insurance Plans, Washington, also finds just 1 out of every 160,000 LTC policies are rescinded by carriers.
In 2005, carriers reported over 519,000 claims received.
Among companies reporting claims on a per-payment basis, 94% of claims were deemed eligible and paid as required, the survey found.
When looked at on a per-person basis, however, 90% of claims were counted as eligible. Counting claims on a per-person basis, as specified by the National Association of Insurance Commissioners, means that once an individual files a claim, later claims submitted by the same person are not considered new claims.
Under NAIC model rules, claims not paid due to preexisting conditions or due to waiting or elimination periods are not counted as unpaid.
Of the 38 companies reporting data, 24 reported information on a per-person basis, representing 63% of in-force policies, but just 9% of the number of claims reported to AHIP for 2005.
Many claims were turned down because policy terms had not been met, such as the elimination period. Of all claims not considered eligible, about 40% of those counted on a per-person basis and 47% of those counted on a per-payment basis had not met the policy’s elimination period.
Almost no claims were rejected due to a preexisting condition, AHIP found.
Using the NAIC definition for denied claims, about 3.1% were denied, while using claims counted on a per-person basis, 6.2% were denied.
Other common reasons for denied claims were:
Requested LTC services were not covered by the policy;
The provider was unlicensed or otherwise not qualified;
Benefit triggers (such as inability to perform specified activities of daily living) had not been met.