If you’re assisting an aunt, neighbor, or grandparent with bills and paperwork, be prepared for some unique situations regarding lapse medical insurance coverage.
Eddy & Schein Group has experienced many interesting insurance twists and turns in working with our aging clients. Hopefully, the following vignettes and tips will help you tackle their affairs.
Long-Term Care Insurance
SITUATION: Your aunt has become forgetful but resists any help.
You’ve found a letter from your aunt’s long-term care (LTC) insurance company stating that her policy had been canceled because she had missed several premium payments. You are pretty sure she will need to start claiming the policy’s benefits soon.
These circumstances have become relatively common. Studies show that more than 25% of those who purchase a traditional LTC policy at age 65 eventually stop making payments and forfeit their coverage. Several factors may interfere with their keeping up their premium payments. Some believe they have financial hardship, while others assume there is no longer a need because family members are helping with care. Many just feel overwhelmed by incoming mail.
It may or may not be possible to reactivate the policy.
- Call the insurance company and ask to reinstate it. Explain any issues – she was ill, moved, or her bank account was shut down – but avoid saying anything that indicates she needs the coverage now.
- Ask what they need to reinstate your aunt’s policy. They may require a nurse visit to confirm that your aunt is still healthy.
- If they still won’t reinstate her despite your efforts, you can write to your state’s regulatory body and request a review of the situation.
Medicare Rx Insurance
SITUATION: Your neighbor wanted her Medicare Part D prescription drug premiums deducted from her Social Security check.
You helped her set up the deduction of her premiums. However, the following year, she received letters from the prescription insurance company stating she had not made her payments and that her policy was going to lapse.
By the time she shared the letters with you, she no longer had drug coverage.
You learn that her already small Social Security benefit had been further reduced by an increase in her Medicare Part B premium. This left her without enough to cover her Medicare Part D premiums.
You can try phone calls and letters to the insurance company. But if you can’t get her reinstated, here’s what else you can do to help:
- Try to get a policy for her with a different company to begin in the new year.
- Find out if her city offers an insurance card for pharmacy discounts.
- Set up auto pay from her checking account or credit card for future premium payments.
Catastrophe Insurance
SITUATION: Your grandmother has expensive home health care.
While discussing how she will continue paying for it, she mentioned that she has catastrophe insurance, which will reimburse a portion of the expense. You offer to help initiate the claims process.
Beware… It will be challenging! You must prove that she has met a very high deductible to have payments initiated.
Start by calling the insurance company with your grandmother so she can answer security questions and give her approval for you to represent her. During that call:
- Ask to be made an authorized representative who can speak with the insurance company going forward.
- Ask what is required to submit a claim, such as documentation of your grandmother’s large medical expenses.
- Ask if the expenses include those paid by Medicare. If so, you may need to track down hospital and medical provider bills you would not usually see if Medicare covered the entire expense.
- Ask if you need to provide hard copies of these bills.
You’ll need to create a system for organizing the information and paperwork the insurance company requests. We suggest using a spreadsheet.
First, track all expenses that meet the deductible. Then, track additional medical expenses once the deductible has been met.