Alternate Service Benefits

The provisions in the sample long term care insurance policy clearly state the specific conditions under which benefits will be paid. Most policies contain provisions similar to those outlined below.

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"Alternate Services" means Qualified Long Term Care Services furnished by a facility or person not defined in this Policy.

We will consider paying for actual charges You incur for covered Alternate Services only if We determine that the Alternate Services meet ALL of the following requirements:

  1. The service falls within guidelines We establish as approved Alternate Services;
  2. It is a type of service described in Your Plan of Care;
  3. It effectively meets Your long-term care service needs;
  4. It is, for You, a cost-effective alternative to Primary Services which would have been covered under the Policy;
  5. It is not provided by a member of Your Immediate Family; and
  6. The Alternate Services and benefit amounts must be mutually agreed to, in writing, by You, Your Licensed Health Care Practitioner, and Us, through an Alternate Services Agreement.

The Benefits We will pay for each day You receive Alternate Services will be the lesser of:

  1. The actual charges You incur for the services received; or
  2. The Maximum Daily Benefits Amount for the Covered Services We determine to be most closely related to the Alternate Services received.

We will not pay for any Alternate Services received prior to the date all parties have signed the Alternate Services Agreement.

An Agreement to receive Alternate Services Benefits will not waive any of Our rights or any of Your rights under this Policy.

Receipt of Alternate Services as specified in the Alternate Services Agreement will count toward satisfying the Elimination Period.

COMMENT: Potentially, this is a generous and extremely reasonable provision, but exactly how generous and reasonable depends upon how it is administered. The provision allows the insurance company significant discretion in its implementation. For example, the provision states that the insurance company "will consider paying..." "…if We determine…," among other things, that the proposed service "falls within guidelines We establish…" and "it effectively meets Your long term care needs." This gives the insurer the power to determine whether the proposed service effectively meets your long term care needs. Finally, the proposed Alternate Services and benefit amounts must be agreed upon in writing with the insurance company.

Therefore, while it is useful to have such a provision in your long term care policy, its true value will be determined when you ask the company to consider providing coverage for some plan of care that is outside the scope of normal coverage under the policy.