Health Insurance Claim Articles

Long-Term Care Insurance: The Pre-Existing Condition Dilemma

By Jeffrey L. Greyber, Esq.

A reader of last week’s blog, Get Back To School - Long-Term Care Insurance 101, asked me if the Affordable Care Act removes insurance company pre-existing condition discrimination from Long-Term Care (“LTC”) insurance policy underwriting as it has from health insurance underwriting. Regrettably, the answer is “no,” as the government felt it was going to be too expensive to do so.¹ That said, let’s talk about what LTC policy applicants or LTC claimants can do about the pre-existing condition disparity in the application process and exclusion in the claim process.

With respect to the application process, knowledge is key. If possible, find out exactly what the carrier wants to learn in the application process with respect to pre-existing conditions. For example, learn what the carrier’s pre-existing condition underwriting protocol requires of you; i.e., what pre-existing condition information you need to disclose and what you do not need to disclose. If possible, learn what pre-existing conditions will preclude a carrier’s policy issuance and what pre-existing conditions will not. The potential sources of such information? Agents, brokers, sometimes attorneys, and even the prospective carrier. The point of learning such information? Not disclosing things on the application immaterial to the insurance company’s underwriting determination, but the carrier may nevertheless wield against you in rejecting your application. Insurance applicants always walk the fine line of being overly informative on an insurance application (thereby upping the likelihood of a carrier’s application rejection) and uninformative on an insurance application (thereby upping the likelihood of a carrier crying “application misrepresentation” in the wake of a claim and its policy rescission efforts). I have found that the information dump or dearth dichotomy is usually not the product of an applicant’s understanding the “thereby” scenarios I speak of and trying to be clever with the application.² Rather, it is usually the product of an applicant not understanding what the application is asking for. So, if you are in any way uncertain as to what kind of pre-existing conditions need to be disclosed on an application, speak up.

With respect to the claim process, proper application of facts to policy language is key. I found this excerpt from a legal treatise informative:

The following authority determined whether, under the circumstances, an insured under a long-term care insurance policy suffered from a ‘preexisting condition’ as defined in the policy.

Ordering judgment for the administrator of an insured’s estate, in the administrator’s action against an insurer to recover benefits under the insured’s long-term care insurance policy, the court, in Wickland v. American Travellers Life Ins. Co., 513 S.E.2d 657 (W.Va. 1998), held that the insured did not have a preexisting condition within the meaning of a policy provision excluding benefits when the insured’s care was necessitated by a preexisting condition. The policy defined a ‘preexisting condition’ as ‘a condition for which medical advice or treatment was recommended by or received from a physician, within six months preceding the Effective Date of coverage.’ The insured had complained of dizziness on two occasions in the six months prior to entering into the policy, and, as she was admitted to a nursing home for vertigo accompanied by falls, the insurer claimed that the insured's prior complaints of dizziness revealed her vertigo to be a ‘preexisting condition.’ Rejecting as ‘inequitably broad’ the assertion that the mere presence of symptoms was sufficient to indicate the existence of a preexisting condition, the court emphasized that a complaint of a symptom was not equivalent to the presence of the ‘condition’ causing such symptom. Based upon its examination of the plain and ordinary meaning of the language of the policy, the court held that mere periodic complaints of symptoms by an insured, without a health care provider’s having rendered or recommended medical advice or treatment for the condition causing such symptoms, did not constitute a ‘preexisting condition.’ Here, the court declared, while in the applicable six-month period the insured had twice complained of occasional or episodic dizziness, there was no reference in any of her medical records to falls or vertigo, the records did not indicate that the insured’s physician rendered medical advice or treatment to her for dizziness or suggested any testing or investigation of the dizziness complaints, and there was no indication that the physician recommended any type of further action respecting this ailment. Furthermore, the court noted, the medical records contained no diagnosis of dizziness, and none of the medications prescribed for the insured had as their specific purpose the cure, prevention, or relief of dizziness.³

In sum, pick up the phone and have a chat with an insurance professional when confronted with the pre-existing condition dilemma. Although the Affordable Care Act did not include Long Term Care, there is still hope for some on the pre-existing condition fence.

¹ See http://www.aaltci.org/news/long-term-care-insurance-news/long-term-care-insurance-not-covered-by-obamacare-provisions.
² As an aside, I do not suggest that you try to get “clever” in the application process. Ideally, I recommend that you get professional advice (e.g., attorney, agent, or broker) before submitting an application. But if you decide to complete and submit an insurance application without professional input and must err in some way, certainly err on the side of over-inclusion.
³ Construction and Application of Long-Term Care Insurance Policies, 30 A.L.R.6th 395 (West, 2008).

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