Does long-term care insurance reimburse privately hired caregivers?
Key facts
- Default LTC policy rule
- Reimbursement requires state-licensed agency
- Exception
- Indemnity policies pay regardless of provider
- Benefit trigger
- 2 of 6 ADLs OR cognitive impairment
- Receipt requirement
- Paid receipts from licensed provider
- Verification step
- Written confirmation from carrier before hire
The single most-missed condition in long-term care insurance policies is the agency-licensure requirement. Most reimbursement policies (the common structure) will only pay against paid receipts from a state-licensed home care agency. A privately hired caregiver — no matter how qualified — does not generate a reimbursable receipt.
Families who assume private hire is cheaper often discover, after the policy is triggered, that they have paid out of pocket for months while a paid-up policy sits inactive because the caregiver arrangement does not meet the provider requirement. The right move is to switch to a licensed agency and start the receipt flow before more money leaves the account.
The exception is indemnity policies (more common in older LTC contracts): these pay a fixed daily benefit once the trigger is met, and provider type is not a condition of payment. If the policy is indemnity, private hire is reimbursable. Check the schedule of benefits page for the words "reimbursement" or "indemnity" — they determine everything about how the policy pays.
The safest path: pull the policy before finalizing a private-hire arrangement, and if the language is ambiguous, ask the carrier in writing whether privately hired caregivers qualify. Most Southeast Michigan agencies familiar with LTC claims will read the policy at no cost as part of intake.
For the full breakdown, see the cornerstone: Private Hire vs. Agency guide.
Related questions
- How do I know if my policy is reimbursement or indemnity?
- The schedule of benefits page names it explicitly. If unclear, the carrier will confirm in writing on request.
- Can we bill the caregiver through a licensed agency?
- No — the caregiver must be the agency’s employee for the receipt to qualify. Some agencies offer employer-of-record services if the family wants to keep a specific caregiver.
- What if we already paid for private hire out of pocket?
- Past private-hire expenses generally cannot be retroactively reimbursed by a reimbursement policy. Switching to an agency starts the receipt flow forward.
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