Medicare Substitute Policies: Why The Elderly Should Beware Of Insurance Company Bad Faith Tactics
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UPDATED: Jul 16, 2021
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Medicare substitute policies can be a good thing for elderly people who need more care. However, elder care lawyers say that the growing elderly population in the U.S. needs to be careful of insurance company bad faith tactics. The issue was recently spotlighted in a California case last spring and our legal expert explained its importance.
Attorney Bob Scott
Bob Scott, a California attorney and partner with the Advocate Law Group, explained the issues surrounding the 4th Appellate District of California’s decision in Sylvia Cotton vs. StarCare Medical Group case – which addressed people who are on Medicare that used a Secure Horizons type of supplement in lieu of Medicare – in this case, PacifiCare. The case extends the 2001 McCall vs. PacifiCare decision – which granted a Medicare beneficiary the right to sue an HMO under state law for damages after a denial of Medicare benefits – to all of California.
According to Scott, what happens in situations like the Cotton case is that Medicare pays an amount – $600 or $700 a month – directly to PacifiCare who has to promise that they will provide benefits no less favorable than those from Medicare. He says that’s how elderly people move from just pure Medicare benefits to a Secure Horizons type of plan and that, to a large extent, it can be a good thing for elderly people that need more care. However, he told us that it can also be a bad thing:
The problem in a setting like this is when a person had a surgery, needed to go back in the hospital for more surgery or was simply in the hospital. In this case, the person was in the hospital for seven days and PacifiCare couldn’t agree with the hospital as to who was going to bear the responsibility of the patient’s care.
They knew somebody would because it was clearly covered under Medicare, and they knew somebody should; however, they delayed and delayed while they were looking out for their own financial interests as opposed to what their primary responsibility is – which is looking after the care of the patient. In this case, what could be more important than a critical medical issue that renders a person in the hospital? The result was that the poor patient dies when all they were doing is seeking the care that was already in place for them. Then, for the wrong reasons, the hospital and the insurer went back and forth as to who was going to provide, or pay for, that care. It’s just outrageous.
While this case is certainly an example of the worst, Scott says that this happens more often then most people realize and that the providers are just lucky that it doesn’t go down worse in more cases. Unfortunately, he worries that as our population gets older and as dollars keep getting squeezed, these kinds of events are going to become that much more common.
Protecting Our Senior Citizens Against Bad Faith Insurance Practices
Putting those worries aside, Scott says that this type of situation is something which can not, and will not, be allowed:
The courts are going to fashion and find a remedy here that is not precluded by any other area of law or preempted by anything else because we’re not just going to allow older folks to get tossed around the system like this. We’re just not going to allow it.
If you are a senior citizen on Medicare or a Medicare substitute policy whose had a serious injury or illness, had your medical care delayed due to issues of insurance coverage and have suffered a medical consequence, contact a bad faith insurance attorney to discuss your situation.