Long-Term Care Insurance Claims: Fighting Wrongful Denials in Texas

The long-term care insurance industry is facing a crisis. Insurers vastly underestimated how long people would live and how expensive care would become. Many companies have stopped selling new LTC policies altogether, and those still managing existing policies are under enormous financial pressure to minimize claim payouts.

According to industry data, insurers paid over $13 billion in long-term care benefits in 2024—but denial rates vary significantly by state and carrier, with some companies denying claims at rates approaching 10%. More concerning, many valid claims are delayed for months through repeated requests for additional documentation, effectively forcing families to pay out-of-pocket while waiting for benefits.

Common Tactics Insurance Companies Use

Insurance companies don’t always deny claims outright. Sometimes they employ delay tactics or underpayment strategies that force policyholders to give up or accept less than they’re owed. Common issues include:

1. Disputing Activities of Daily Living (ADL) Limitations

Most long-term care policies require that you cannot perform at least two out of six Activities of Daily Living (ADLs) without substantial assistance before benefits are triggered. These six ADLs are:

• Bathing – washing oneself, getting in/out of shower or tub
• Dressing – putting on and removing clothing, including fasteners
• Eating – feeding oneself or managing feeding tubes
• Toileting – using the toilet and managing personal hygiene
• Transferring – moving from bed to chair, or in/out of wheelchair
• Continence – maintaining bladder and bowel control

Insurance companies frequently dispute whether you truly need “hands-on assistance” with these activities or whether you can perform them with minimal help. They may:

• Send their own nurse assessor who asks leading questions designed to minimize your needs
• Rely on inconsistencies in medical records to suggest you’re more independent than you actually are
• Argue that you only need “standby assistance” (supervision) rather than physical help, even when safety concerns are paramount
• Ignore the reality that you may be able to technically perform an ADL but cannot do so safely without risk of falls or injury

2. Challenging Cognitive Impairment Claims

Many policies allow benefits to trigger if you have a “severe cognitive impairment” requiring substantial supervision—even if you can still perform ADLs physically. This is crucial for policyholders with Alzheimer’s disease, dementia, or other forms of cognitive decline.

Insurance companies often:

• Use deceptively worded questionnaires that set an impossibly high bar for “severe” impairment
• Require “24-hour supervision” when Texas law does not mandate this standard
• Disregard formal neuropsychological testing in favor of brief, inadequate cognitive assessments
• Deny claims because the policyholder refuses to admit they need help (a hallmark symptom of cognitive decline)

3. Claiming Medical Necessity Isn’t Met

Some insurers deny claims by arguing that the level of care you’re receiving isn’t “medically necessary” or that you’re in the wrong type of facility. They may contend:

• You don’t need nursing home care but only require assisted living (which older policies may not cover)
• The care provider or facility doesn’t meet the policy’s definition of “eligible care provider”
• Home care services are merely “personal preference” rather than medical necessity
• Services like light housekeeping or errand-running aren’t covered “personal care”

4. Exploiting Outdated Policy Language

Many policies purchased in the 1990s contain restrictive provisions that insurers exploit:

• Prior hospitalization requirements – demanding you were hospitalized or in a nursing home before benefits begin (these provisions are now illegal in many states, including Texas, but insurers still cite them)
• Nursing home-only coverage – older policies that don’t cover assisted living or home care, even though these options didn’t widely exist when the policies were written
• Waiting period manipulations – arguing that elimination periods (like a deductible) don’t start until you’re receiving care from a state-certified professional

5. Policy Lapse Claims

One of the most heartbreaking denials occurs when insurers claim a policy lapsed due to missed premium payments—often because the policyholder was already cognitively impaired and unable to manage finances. While Texas law provides protections against unintentional lapses, insurance companies may:

• Fail to send proper lapse notices to designated third parties
• Refuse to reinstate policies when cognitive impairment caused the lapse
• Process payments incorrectly and then claim the policy lapsed

6. Paperwork Technicalities and Documentation Games

Insurance companies create administrative labyrinths designed to frustrate claimants:

• Demanding monthly forms with 100% precision, denying claims over minor typos or incomplete fields
• Repeatedly claiming they never received documentation you’ve submitted multiple times
• Requiring specific certifications from physicians who aren’t familiar with insurance claim requirements
• Creating “Plans of Care” standards that nursing homes and care providers don’t understand

7. Lowball Offers and Benefit Terminations

Even when claims are initially approved, problems continue:

• Offering to pay only a fraction of covered costs
• Terminating benefits prematurely, claiming you’ve “improved” or no longer need care
• Conducting annual or periodic “reassessments” designed to find reasons to stop payments