The point of buying long-term care insurance is so you don't have to worry how to pay for a nursing home (or other types of long-term care). But be careful to check your policy because it may not cover every type of long-term care facility.
Jeanne Crutchfield purchased a long-term care insurance policy in 1992 that provided coverage if she needed care in a nursing home. In 2009, Ms. Crutchfield was diagnosed with Alzheimer's disease and became a patient at Barton House, a facility specifically designed for Alzheimer's patients. Barton House provided 24-hour care to patients, with nurses on duty during the day and on call at night. Ms. Crutchfield requested benefit payments from the insurance company for her care, but the company denied her request because Barton House was not a "nursing home" as the insurance policy defined it. Ms. Crutchfield's policy defined a nursing home as a facility that has planned programs or policies that are periodically reviewed by a doctor, and Barton House did not meet this definition.
Ms. Crutchfield sued the insurer, but the U.S. District Court for the Western District of Kentucky has ruled against her, finding that the insurance policy was unambiguous about what was covered. The court noted that even though this type of Alzheimer's facility was unanticipated in 1992 when Ms. Crutchfield bought her policy -- and that this type of facility would likely be covered under more recent policies -- Ms. Crutchfield should not have had a reasonable expectation that her policy would cover the facility. Crutchfield v. Transamerica Occidental Life Insurance Co. (W.D. Ky., No. 3:10-CV-777-H, Sept. 19, 2012).
This case illustrates the importance of carefully reading your long-term care insurance policy before assuming that care will be covered. If you have questions about your policy, talk to your elder law attorney. To find a qualified elder law attorney near you, click here.
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