Does Long Term Care Insurance Cover Assisted Living?

In this article

1. Find these four things in your policy
2. Reimbursement or cash, and why it matters
3. What happens at the community
4. Filing the claim without losing a month
5. If the policy will not cover it

Most long term care policies written in the last twenty years or so do cover assisted living, but the policy pays only after two conditions are met: a doctor certifies that your parent needs help with a set number of everyday activities, and a waiting period passes. Older policies are the ones to watch, because some were written to pay for nursing home care only. The answer is in your own contract, and you can find it in about twenty minutes if you know which four things to look for.

Find these four things in your policy

Pull the contract out and look for four items. Everything else is detail.

The benefit trigger. This is the definition of when the insurer starts paying. According to the Administration for Community Living, most policies pay when a person needs help with two or more of six activities of daily living, or has a cognitive impairment. The six are bathing, dressing, eating, toileting, transferring in and out of a bed or chair, and continence. Your policy may set the number differently, and Florida allows an insurer to add other triggers as long as the policy spells them out.

The elimination period. This is a deductible measured in days, not dollars. It is the stretch after the trigger is met but before the insurer pays anything, commonly 30, 60 or 90 days. Read carefully whether your policy counts every calendar day after the trigger or only days you actually paid for care. That distinction can add weeks to the wait.

The covered setting. Find the section that defines a covered facility. Newer policies name assisted living or residential care directly. Florida's Department of Financial Services notes that policies may cover nursing homes, home health care, or both, and that some include adult day care centers and assisted living centers. If yours names only a skilled nursing facility, assisted living is probably not covered, and that is worth knowing now rather than at admission.

The daily or monthly limit. Policies reimburse up to an amount you selected when you bought the coverage, often years ago. If you bought inflation protection, that figure has grown. If you did not, it has not.

Reimbursement or cash, and why it matters

Policies pay in one of two shapes, and they behave very differently once a parent moves in.

A reimbursement policy is the more common of the two. It means the community bills you or the insurer, and the insurer pays against the invoice. A cash policy pays the same amount whether care cost that much or not, which gives a family more room to combine it with in home help.

Either way, the insurer reports to the IRS at the end of the year what it paid out, and you receive a copy of that statement.

What happens at the community

Your care manager at the insurance company approves a plan of care that lists the benefits your parent is eligible for. In practice that means a nurse or assessor speaks with the family, reviews the doctor's certification, and signs off. The community provides the documentation the insurer asks for each month, usually a statement of services and a note on the level of care.

The honest arithmetic: a benefit covers part of the bill, not all of it. What is left over is the number families need on the table before the move, not after.

Our full pricing page shows both communities, and if you want to see how that compares against the market, the walk through in what assisted living costs in Citrus County puts the figures in context.

Filing the claim without losing a month

Claims stall in predictable places. Three things move a claim faster than anything else.

1. Get the physician certification early. A licensed health care practitioner has to certify that the person needs substantial help with the activities named in the policy, and for a tax qualified contract the expectation is that the need will last at least 90 days. Book that appointment before you file, not after the insurer asks.
2. Start the elimination period clock on purpose. The clock starts when the trigger is met, so a delayed assessment delays everything downstream. If a parent is already receiving paid help at home, tell the insurer, because those days may count.
3. Ask the community to send documentation directly. Both Sugarmill Manor and The Gardens handle insurer paperwork routinely. It is faster than a family relaying statements back and forth.

If the insurer denies the claim, Florida's Department of Financial Services takes consumer complaints about long term care policies and will look at the file. The consumer helpline is (877) 693-5236.

If the policy will not cover it

Sometimes the answer really is no. A nursing home only policy, a lapsed policy, or a trigger your parent does not yet meet all lead to the same place, which is finding another way to pay.

The usual paths are Medicaid, which both of our communities accept and which is covered in does Medicaid pay for assisted living in Florida, and VA benefits for a wartime veteran or surviving spouse, covered in VA Aid and Attendance for assisted living. These stack. A partial insurance benefit plus a VA increase plus family contribution is a very common way a move actually gets funded.

If you are holding a policy and cannot tell what it says, bring it to us. We read these every month, and we will tell you plainly whether it looks like it covers a move here. Send us a note and we will call you back.

This article explains how policies generally work. It is not legal or tax advice, and your contract governs.

Frequently asked questions

Does long term care insurance cover assisted living?

Most policies written in the last twenty years do, but they pay only after two conditions are met. A doctor has to certify that the person needs help with the number of everyday activities the policy names, usually two of six, and a waiting period called the elimination period has to pass. Some older policies were written to cover nursing home care only, so check the definition of a covered facility in your own contract.

What triggers a long term care insurance benefit?

Most policies pay when a person needs help with two or more of six activities of daily living, or has a cognitive impairment such as Alzheimer's disease. The six activities are bathing, dressing, eating, toileting, transferring in and out of a bed or chair, and continence. Your policy may set the number differently, and Florida allows an insurer to add other triggers as long as the policy spells them out.

How long is the waiting period before my policy pays?

The elimination period is a deductible measured in days rather than dollars, commonly 30, 60 or 90 days after the benefit trigger is met. You pay for care during that stretch. Check whether your policy counts every calendar day after the trigger or only days you actually paid for care, because that difference can add weeks.

Will my policy cover the whole assisted living bill?

Usually not. Policies reimburse up to a daily or monthly limit you selected when you bought the coverage. If you added inflation protection that figure has grown over the years, and if you did not it has stayed where it started. Families commonly combine a policy benefit with other funds, and both Sugarmill Manor and The Gardens publish their rates so you can do that arithmetic before the move.

What if my long term care policy denies the claim?

Florida's Department of Financial Services takes consumer complaints about long term care policies and will review the file. The consumer helpline is (877) 693-5236. Bring the denial letter and the policy, because the definitions in the contract are what the review turns on.

Sources

• Administration for Community Living, Receiving long term care insurance benefits
• Administration for Community Living, What is long term care insurance
• Florida Department of Financial Services, Long Term Care overview
• IRS, Instructions for Form 1099-LTC

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Written by

Cameron Hernando Clark

Community Relations Director

Cameron Hernando Clark is the Community Relations Director for The Manors of Citrus. He writes this family guide to help Citrus County families make sense of assisted living and memory care, drawing on the day to day of running two family owned communities on Florida's Nature Coast.