Long Term Insurance: Many Customers Unreasonably Denied Claims

New York, NYReaction to a New York Times article (March 26, 2007) highlighting problems with the long term insurance has been widespread, with people across the US condemning the actions of companies like Conseco.

From Hillary Rodham Clinton asking the Government Accountability Office (GAO) to look into the matter, to individuals filing lawsuits against dishonest long-term insurers, people are taking action against companies that take advantage of seniors.

The article gave numerous examples of the ways in which long term insurance companies deny seniors' claims, leaving the seniors without a way to pay for their long term care, even if they have no way of looking after themselves. In some cases, families of the seniors wind up paying thousands of dollars to ensure that their loved ones are cared for, even though the seniors have faithfully paid into a long term insurance policy.

Lawsuits are now piling up against long term insurance companies such as Conseco, Penn Treaty, and John Hancock Insurance Company. These lawsuits claim that policies were denied because policyholders filled out the wrong forms even though the forms they filled out were sent from the insurance company; because the insurance companies deemed facilities unsuitable even if they were licensed by the state, and because unimportant paperwork was not submitted.

Meanwhile, letters to the editor in the New York Times, responding to the report on long term insurance, echoed the sentiment that people who have paid into long term insurance are being unfairly treated. One person who wrote in mentioned the "dodges, excuses and often outright lies" that insurers use to deny claims.

A lawyer wrote to the paper advising policyholders that anytime they speak with their insurance company about a denied claim they should write down the company representative's name, phone number, department, and the date and time that the call was made. They should also write down any information that the representative gave to the policyholder. Finally, the lawyer advised policyholders to keep separate files for all correspondence with the insurance carrier in case a lawsuit is ever required.

Following the New York Times report, Senator Hillary Rodham Clinton called on the Government Accountability Office (GAO) to launch an investigation into the impact that the denial of promised services made by insurance companies has on the Medicaid program. Senator Clinton sent the letter to David Walker, Comptroller General of the United States and GAO head, noting that when insurance companies deny claims to seniors who have paid for long-term insurance policies, Medicaid, and therefore taxpayers, is forced to cover the bill. "When it comes to navigating the health care maze, confusion and administrative hurdles are insurance companies' best friends," Senator Clinton said.

Long term care insurance is purchased from private insurers and is designed to pay for services needed for chronic illnesses. It often covers people in a nursing home but can also cover in-home care and comes into effect when the policyholder needs help with daily living activities or is impaired by Alzheimer's or other forms of dementia.

Some long term insurance companies are treating people who have difficulty taking care of themselves in their later stages of life horrendously even though these people have dutifully paid their premiums to ensure that they would be taken care of when they need help. The treatment they are receiving is appalling; long-term insurance companies who treat their customers this way must be held accountable for their practices.