Long-Term Care Insurance Denied: How to Appeal

Long-term care (LTC) insurance is purchased specifically to cover nursing home, assisted living, or in-home care costs — often after decades of premium payments. When a claim is denied just when you need it most, the financial and emotional impact can be devastating. LTC denials are, however, frequently challengeable. Here is what you need to know.

How Long-Term Care Insurance Works

LTC policies pay for care when a policyholder can no longer perform a certain number of Activities of Daily Living (ADLs) on their own, or when they have a severe cognitive impairment (such as Alzheimer's disease). ADLs typically include:

• Bathing
• Dressing
• Eating
• Transferring (moving from bed to chair, etc.)
• Toileting
• Continence

Most LTC policies require that a person be unable to perform 2 of 6 ADLs (or fewer, depending on the policy) without substantial assistance, or have severe cognitive impairment. This is the "benefit trigger."

Why LTC Claims Get Denied

1. Benefit Trigger Dispute The most common denial reason is that the insurer's assessor determined you can still perform enough ADLs independently. These assessments are conducted by nurses or occupational therapists hired by — and often biased toward — the insurance company. Their conclusion does not have to be the final word.

2. Elimination Period Not Met Most LTC policies have an "elimination period" — typically 30, 60, or 90 days — that functions like a deductible. You must receive care for that many days at your own expense before benefits begin. If the insurer claims the elimination period was not properly met, benefits may be delayed or denied.

3. Licensed Care Requirement Many LTC policies require that care be provided by a licensed care provider. Care provided by family members without licensed care professional involvement may not satisfy this requirement, depending on the policy.

4. Care Plan Requirement Some policies require a licensed health care practitioner to certify your condition and create a plan of care before benefits begin. If this was not done, the insurer may deny the claim on procedural grounds.

5. Policy Exclusions Pre-existing condition exclusions, mental and nervous condition limitations, and other exclusions may be cited. Check your policy document carefully against the stated exclusion.

6. Lapse in Coverage If premium payments were missed and the policy lapsed, coverage may have terminated. However, most states require insurers to provide a grace period and multiple notices before a policy lapses. If proper lapse procedures were not followed, the policy may still be in force.

How to Appeal an LTC Denial

Step 1 — Review the Denial Letter Carefully The denial letter should explain exactly which benefit trigger or policy provision is cited. This tells you exactly what you need to rebut.

Step 2 — Obtain an Independent Assessment Do not rely solely on the insurer's assessor. Have your physician and/or an independent occupational therapist conduct their own ADL assessment. Detailed, objective documentation of your functional limitations is the foundation of your appeal.

Step 3 — File a Formal Internal Appeal LTC insurers are required to have an internal appeal process. Submit your appeal in writing with:

• Your physician's documentation of functional limitations
• An independent occupational therapist's assessment
• Medical records supporting your diagnoses
• A detailed description of the specific assistance you require for each ADL
• A rebuttal of each specific reason cited in the denial

Step 4 — Pursue External Independent Review: Complete Guide" class="auto-link">External Review If the internal appeal fails, request external review. Some states require insurers to offer external review by an independent organization.

Step 5 — File a State DOI Complaint Long-term care insurance is regulated primarily by state insurance departments. If the insurer is denying a legitimate claim or acting in bad faith, file a complaint with your state's Department of Insurance. State insurance commissioners have significant authority over LTC insurers, including the ability to require claim payment.

Bad faith insurance: If an insurer denies your claim without a reasonable basis, delays payment without justification, or fails to investigate your claim properly, it may be acting in bad faith — a basis for legal action in most states.

Step 6 — Consult an Attorney For significant LTC claim denials, consulting an insurance bad faith attorney is worth considering. Many work on contingency — meaning no upfront cost. Insurance commissioners and attorneys can sometimes resolve disputes that the claims process cannot.

State Guaranty Funds: If the Insurer Is Insolvent

A handful of LTC insurers have become financially distressed over the years. If your insurer becomes insolvent, state guaranty funds provide a backstop — covering claims up to certain limits (which vary by state). Contact your state insurance department if you have concerns about your insurer's financial stability.

SHIP Counselors for LTC Issues

If you have Medicare, your SHIP counselor (shiphelp.org) may be able to provide guidance on LTC insurance appeals, particularly for dual Medicare-Medicaid situations. For pure LTC insurance disputes, your state insurance department's consumer services division is the primary resource.

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Related Reading:

• How to Write an Insurance Appeal Letter
• What Is Medical Necessity?
• Internal vs External Insurance Appeal