Long Term Care Policies Gone Bad – Very Bad

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jun 19, 2018

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Long term care policies were sold throughout the 1980’s and 1990’s in droves to unsuspecting consumers who wanted the peace of mind of knowing that they would be taken of in their old age and not become a burden on their friends and family. Insurers didn’t realize at the time how much health care costs would skyrocket in the 20 years that followed and many of them are now making it impossible for policyholders to collect.

Case in point

According to a recent New York Times article, Mary Rose Derks purchased a long term care policy from Conseco in 1990. At the time, she was running a farm in Montana and trying to support three children and her mother as well. Her husband passed away several years prior and she was trying to spare her children from the burdens she was now facing alone. She dutifully paid her premiums for twelve years until she became increasingly ill. Her doctor ordered her to move into an assisted living facility in 2002, which was fine with her because she had long term insurance to pay for it. Or, at least she thought……..

A system gone bad

Her insurer, Conseco, told Mrs. Derks that her stay would be covered and she paid the $1,900 month charge, submitted her claim and waited for her reimbursement check. It never came. Instead, she received a letter from Conseco telling her that her claim was denied because she 1) didn’t send the claim form soon enough and 2) didn’t provide them with proof of illness. Her policy only mentioned that her stay had to be ordered by a doctor and sent ‘as soon as reasonably possible’. Over the course of the next several years (yes, years), members of her family called Conseco over and over again – and got nowhere. Mrs. Derks received dozens of letters from the insurer denying her claim for any reason they could think of and, according to the article, many of the letters contradicted one another.

Enough is enough

After paying for her care for over four years, her family had to sell part of their business to pay for her medical bills. The coverage she thought would insulate her family from financial hardship did just the opposite. Having never received a dime from Conseco, Mrs. Derks was forced to sue the company in 2006.

Unfortunately, this is only one story that has been reported – there are countless others that haven’t been told. The issue of long term care insurers not paying for the coverage they’ve promised has risen to a political level. Mrs. Derks’s story has become national news and part of a congressional investigation requested by Senators Hillary Clinton and Barack Obama into why insurers aren’t paying for long term claims. Hopefully, Mrs. Derks’s story will inspire Congress and insurers to do the right thing.

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