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Long-Term Care Decisions Due Sooner

New law allows consumers to challenge claim denial

People with long-term care insurance are getting a break.

Under a state law that went into effect July 1, insurers must promptly pay undisputed claims for long-term care, such as bills for assisted living and home health aides. Consumers may appeal denials to an independent third party.

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Before the changes went into effect, there was nothing a consumer could do — short of a lawsuit — about a rejected claim or when a decision to pay the claim was drawn out for months, said Kevin Jeffries, consumer liaison for the Oregon Insurance Division.

In 2010 and 2011, one in eight long-term care claims filed by Oregon residents was rejected.

Before the law, policyholders or their families had to continue paying the bills or drop home health care services or move out of the care facility, Jeffries said.

"You can imagine the stress and strain," he said.

Here's how the law works: Insurance companies must pay any undisputed claim within 30 days. If the insurer denies a claim, the consumer must first appeal directly to the insurance company.

If the claim is denied a second time, the consumer is entitled to a review by an independent organization. The consumer can choose from among five organizations that meet state qualifications. The insurance company must pay for the review and is bound by the results.

AARP backed changes

AARP was among the organizations that pushed for adoption of the new law.

"This is one piece of a broader puzzle," said Jerry Cohen, AARP Oregon state director. "How [else]does anyone start to plan ahead and count on, in this case, an insurance policy that's really going to be of value when you need it?"

The law applies to long-term care policies sold or renewed after July 1. A policy that was sold or renewed before July 1 will not be subject to the law until its next renewal date.

Ron Fredrickson, manager of the consumer advocacy team at the Oregon Insurance Division, said he hopes the prospect of an outside review will cause insurance companies to apply greater scrutiny before denying a claim.

The demand for long-term care services is bound to grow, with the U.S. population age 85 and older expected to increase by 69 percent over the next 20 years, according to the AARP Public Policy Institute (PPI) (pdf).

By 2032, PPI projects, Oregon's 85-plus population will grow by 73 percent.

But few people have long-term care policies; Fredrickson said just 6 percent of Oregonians 45 or older have a policy.

Next: Pricey premiums. »

Pricey premiums

Many can't afford a private long-term care policy, which costs $160 to $220 a month for a person who buys it between the ages of 45 and 55, Jeffries said.

A private assisted living center in Oregon costs about $3,500 a month, and a home health aide can cost $682 a month, according to PPI.

Others mistakenly think Medicare always pays for extended care.

Medicare pays for medically necessary skilled nursing facility care or home health care under some conditions.

Medicare does not pay for non-medical care — such as assistance with dressing, bathing or using the bathroom — if that's the only kind of care the patient needs.

Medicaid covers some long-term care for people with very low incomes. The Department of Veterans Affairs may pay for long-term care for service-related disabilities and in some other cases.

Information about long-term care insurance is available at:

  • The consumer advocacy hotline of the Oregon Insurance Division, 888-877-4894 toll-free or 503-947-7984.
  • The Senior Health Insurance Benefits Assistance program for Medicare information and assistance, toll-free at 800-722-4134 or 503-947-7979.

Paige Parker is a writer living in Eugene, Ore.

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