By A. Christopher Wieber (Law Office of Mark Scherzer)
In Clark v. Silac Ins. Co., No. 22-35685, 2023 U.S. App. LEXIS 24571 (9th Cir. Sep. 15, 2023), the Ninth Circuit Court of Appeals underscored the difference between “home again” and “home health care” benefits and — in the case of the policyholder (Mrs. Dorothy Carroll) — this difference meant that certain home care she received would not be covered by her policy.
Mrs. Carroll purchased the long-term care policy in 1990 from the Equitable Life & Casualty Insurance Company. The Equitable long-term care policy was later acquired and administered by the SILAC Insurance Company. The policy was labeled a “long-term care policy” and provided for both “long-term care” and “home again” benefits. Long-term care benefits were covered “Eligible Charges for Your stay in a Long-Term Care Facility or Nursing Home.” The “Home Again” benefit covered care at home “including family members, friends, and home health agencies” and also covered “adult day care or respite care.” However, the Home Again benefit was payable only if “you come home again following a Long-Term Care stay of more than 30 days.” The Ninth Circuit Court of Appeals upheld this limitation and concluded that even though the policy arguably gave the appearance of covering home health care generally, the policy language clearly limited the coverage to only such home health care as was provided immediately after hospitalization at a long-term care facility or nursing home of 31 or more days.
Mrs. Carroll argued, and a dissenting opinion agreed, that the 31-day institutionalization requirement was barred by a Montana law (where the policy was issued), to the effect, that “[a] long-term care insurance policy that contains a benefit advertised, marketed, or offered as a home health care benefit may not condition receipt of a benefit on a prior institutionalization requirement.” In support of this conclusion, the dissent cited advertising by SILAC promising consumers: “We will pay for care received from family, friends, home health agencies or anyone you choose—even respite care and adult day care are covered,” which aligned with the policy language in the Home Again Benefit that home health care “will be paid regardless of who provides for Your care, including family members, friends, and home health agencies.”
The majority opinion concluded that the Equitable-SILAC policy, however, did not contain a “home health care benefit” because it provided additional benefits:
The policy here contains no such benefit. Under Montana law, the definition of “home health care” is limited to “services provided by a licensed home health agency to an insured in the insured’s place of residence that is prescribed by the insured’s attending physician as part of a written plan of care.” Id. § 33-22-1001. By contrast, the Home Again Benefit “will be paid regardless of who provides for [the insured’s] care, including family members, friends, and home health agencies.” While an insured may thus elect to receive the care they need from a home health agency, the policy is—by its plain terms—not limited to the types of care that such an agency can provide. And in addition to permitting any person to provide the insured’s care, the policy provides coverage for “any need” the insured may have, including “adult day care.”
In response, the dissent argued that “[e]ven though the Home Again Benefit provision contains other benefits that are not home health care benefits, it undoubtedly contains home health care benefits,” and that the Montana statute applied (and should preclude SILAC’s effort to enforce the 31-day institutionalization requirement). However, this argument did not win the day. The majority concluded that the policy did not provide home health care benefits and, as a consequence, the Montana law was inapplicable and the policy’s 31-day institutionalization requirement was legal and enforceable.
Purchasers of long-term care insurance should be careful to review all policy language and not just advertising materials. If they are intending to purchase coverage that includes care in the home by a home health care agency (regardless of whether they have first been hospitalized) they should ensure that policy provisions regarding home health care do not contain an institutionalization requirement.
