!Creation Date: 09/14/23><!Author: Arizona Legislative Council><!Typist: dbupdate>
20-1691.03. Limitations of long-term care insurance policies
A. No insurer may cancel, fail to renew or otherwise terminate a long-term care insurance policy solely on the grounds of the age or the deterioration of the mental or physical health of the insured individual or certificate holder.
B. No long-term care insurance policy may contain a provision establishing any new waiting period if existing coverage is converted to or replaced by a new or other form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder.
C. A long-term care insurance policy shall provide coverage for at least twenty-four consecutive months for each covered person.
D. No preexisting condition limitation period in a long-term care insurance policy or certificate may exceed the following:
1. If not approved under paragraph 2, six months after the effective date of coverage of an insured for whom medical advice or treatment was recommended by, or received from, a health care services provider.
2. A period of time set by the director after the effective date of coverage of an insured who is a member of a designated group for which the director has found that a different limitation period is justified because the group is specially limited by age, group categories or other specific policy provisions and that the different limitation period will be a benefit to the certificate holders.
E. No long-term care insurance policy or certificate may use a definition of preexisting condition which is more restrictive than the definition prescribed in this article.
F. A long-term care insurance policy shall not exclude or use waivers or riders of any kind to exclude, limit or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the periods allowed under subsection D.
G. The definition of preexisting condition does not prohibit an insurer from using an application form designed to elicit the complete health history of an applicant and, on the basis of the answers on that application, from underwriting in accordance with that insurer's established underwriting standards.
H. No long-term care insurance policy or certificate issued on or after July 1, 1990 may provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care, or coverage that conditions eligibility for benefits for levels of care on the receipt of higher levels of care. In evaluating the requirements of this subsection, the director shall consider the amount of coverage provided based on aggregate days of care covered for lower levels of care when compared to days of care covered for skilled care.
I. A long-term care insurance policy or certificate, other than a policy or certificate that is issued to a group, may not exclude coverage for a loss or confinement that is the result of a preexisting condition unless the loss or confinement begins within six months following the effective date of coverage of an insured person.
FAQs
Long term care insurance is expensive and premiums can go up. That's often a big, unpleasant surprise for many people. Many assume they were locked into a premium amount when they got their long term care insurance policy.
Why was i denied long-term care insurance? ›
Insurance companies may assess your ability to perform daily activities independently, known as activities of daily living (ADLs). If you have limitations in ADLs when applying, such as bathing, dressing, eating, transferring and continence, you may be deemed ineligible for long-term care insurance.
What is excluded in a long-term care policy? ›
Many long-term care policies exclude coverage for the following: Mental and nervous disorders or diseases (except organic brain disorders) Alcoholism and drug addiction. Illnesses caused by an act of war.
What is the requirement of a qualified long-term care insurance policy? ›
"The six activities of daily living are bathing, dressing, toileting, transferring, continence, and eating and most policies say a policyholder must need assistance with at least 2 of the ADLs or have severe cognitive impairment" to be eligible for benefits. Compare your long-term care insurance options now.
What is the argument against long-term care insurance? ›
The Arguments Against Long Term Care Insurance
LTCI is relatively expensive for retired people on a fixed income. Some argue that if you have more than $1 Million Dollars in assets, you don't need it. If you have less than $500,000 in assets, you can't afford it.
What is the disadvantage of a long-term plan? ›
Disadvantages of Long-term Goals
Long-term goals can sometimes feel overwhelming, as they require sustained effort and patience, and progress may not be immediately visible. Setting overly ambitious long-term goals can lead to frustration and discouragement if they are not met within the desired timeframe.
What type of care is typically not covered in a long-term care policy? ›
In California, most skilled, intermediate and custodial care is received in nursing homes that are licensed as "skilled nursing facilities". All long-term care policies except Home Care Only cover this kind of care.
Why don t more people purchase long-term care insurance policies? ›
Repeated government efforts to create a functioning market for long-term care insurance — or to provide public alternatives — have never taken hold. Today, most insurers have stopped selling stand-alone long-term care policies: The ones that still exist are too expensive for most people.
What disqualifies a person from life insurance? ›
Pre-existing conditions – meaning any health issue or condition that existed before applying for coverage – are often considered high-risk by insurance companies and can lead to disqualification. Chronic conditions that require long-term medication or treatment can also impact eligibility.
What is the minimum number of activities of daily living? ›
The six standard ADLs are generally recognized as bathing, dressing, toileting, transferring (getting in and out of bed or chair), eating, and continence. ADLs are the most common triggers used by insurance companies to determine eligibility for long-term care insurance benefits.
After a lifetime limit is reached, the insurance plan will no longer pay for covered services.
What is the elimination under a long-term care insurance policy? ›
The elimination period (sometimes called a "Waiting Period" or "Deductible Period") is the period of time you must wait after you qualify for care and are eligible to receive benefits before the company will begin paying or reimbursing you for your covered care.
Which of the following is not covered under a long-term care policy? ›
The correct answer is option A. Acute care in a hospital is not typically covered under a long-term care policy. Long-term care policies are designed to provide coverage for individuals who require assistance with daily activities and prolonged care due to chronic illnesses, disabilities, or cognitive impairments.
What is the difference between a qualified and non qualified LTC policy? ›
HIPAA requires LTC insurance policies comply with its guidelines to be considered “qualified” LTC insurance. As such, qualified LTC insurance policies are generally regulated as accident and health. Policies that do not meet these requirements are considered to be non-qualified LTC insurance policies.
When can a long-term care policy deny a claim? ›
Claims will be denied if the type of care doesn't match the policy's definition of covered care. AND Claims are regularly denied if your medical paperwork doesn't match the specific policy triggers in your policy.
Why don't more people purchase long-term care insurance policies? ›
Repeated government efforts to create a functioning market for long-term care insurance — or to provide public alternatives — have never taken hold. Today, most insurers have stopped selling stand-alone long-term care policies: The ones that still exist are too expensive for most people.
What is the downside of LTC? ›
A primary concern for individuals considering long-term care insurance is the cost of premiums. The ongoing financial commitment can be significant and there is always the risk of paying for coverage that may never be utilized.
What percentage of people with long-term care insurance actually use it? ›
So, 35% will use their coverage and 65% will not. As you might assume, the decline is because during those first 90 days, some people will recover and some will die.
Why do people not plan for long-term care? ›
I won't need it because I'll probably go the same way." People who use these objections to long-term care planning , typically have only a few basic, underlying, real reasons for rejecting the concept. They don't think it's a problem, they're convinced it won't happen to them or they don't want to think about it.
