Crusading Lawyer Demands Congressional Action against Long-Term- Care Insurers

Chicago, ILImagine being in your 70's and 80's and having your health fail to the extent that you need expensive long-term care in a special facility. But you take some consolation in the fact that you've been paying long-term-care insurance premiums for a number of years. At least you and your family won't be burdened with tens of thousands of dollars in health care costs.

You're safe. Or at least you thought you were - until your insurance company refused your claim. Now you are in big trouble, with your health and your finances. Many people lose everything they have, including their lives, when insurance companies won't pay up.

In a recent scathing report on the long-term-care insurance industry in the New York Times, some of America's largest insurance companies were exposed for denying legitimate claims by the elderly and the seriously ill. It's a situation thousands of Americans find themselves in - after paying insurance premiums to insurers like Conseco, Penn Treaty American and Bankers Life and Casualty.

Enter San Francisco lawyer and consumer advocate, Ray Bourhis, no stranger to battling it out with the insurance companies. Bourhis, author of Insult to Injury, Fraud and the Big Business of Bad Faith, is very blunt in his assessment of the situation: " Some of the people running these companies are total crooks. The industry has collected over 50 billion (yes, that's billion) dollars in premiums. And now they're denying clearly legitimate claims, knowing they can outlive their policyholders."

Bourhis is calling on Congress to dump the ERISA Preemption clause. (ERISA is the federal Employee Retirement Income Security Act of 1974.) The preemption clause means that if you lose your savings, home or life due to criminal fraud by an insurance company on a policy you obtained at work, you have no right to recover the losses resulting from the fraud. He says Congress and the President can solve this problem with a quick vote and the stroke of a pen.

A further step, Bourhis says, is for individual states to initiate policyholder protections. California and half a dozen other states have good operating models that can be duplicated. With an improved regulatory process, states could put insurance commissioners in office and give them the tools they need to do their jobs, like California does.

A specialist in insurance fraud, Bourhis is adamant that insurers could care less about lawsuits, punitive damages or bad publicity, even though millions of dollars in fines have been levied against them. He says they don't care, because their profits continue to climb when they don't pay their policyholders what is rightfully theirs. And when judgements do go against them, and they are ordered to pay 5 to 10 million dollars a year? It's a drop in the bucket. They're still way ahead with the millions in profits gained from the coverage they deny.

Bourhis does recognize that there are good companies who play fair. The problem, he says, is that they are trying to compete with those that don't.

Policyholders fighting insurance companies know it's a David and Goliath battle - and they are definitely David. They can take some comfort in seeing others winning their cases. But there's no denying the evidence. Thousands of elderly patients are just too sick, vulnerable and resource poor to fight the monolithic insurance companies. For them, compensation, if it comes, may be too late.