Long Term Care Insurance News

A multi-state investigation has resulted in a multi-million dollar fine against long term care insurance giant, Conseco. The fine was imposed due to a pattern of consumer harm in Conseco’s long term care insurance practices. The settlement breaks down into a $2.3 million dollar fine with an additional $30 million to be spent by the company on claims handling improvements and restitution to policyholders with claims filed from Jan. 1, 2005 through April 30, 2007. Many of these claims were improperly denied or unreasonably delayed. Conseco has stopped actively writing new policies for long term care insurance.

The Wall Street Journal recently investigated the growing trend for states to join up with private insurance companies to market long term care insurance. It found that many states are trying to curb the high costs of long term care paid under Medicare, the joint federal-state health insurance program for low income people by joining up with private insurance companies to encourage citizens to purchase private long term care insurance. These partnerships have come under increasing criticism because they are pressuring people who would otherwise qualify for free medical care, to pay for insurance. The Wall Street Journal cited sources who stated that it was unfair to encourage these people who are struggling to pay for medications to spend what little money they have on insurance premiums when their health care would already be paid for by Medicare. Critics argue that the federal government and state governments are simply shifting these costs to low-income people, when in fact these are the very same people which Medicare was designed to help.

Parade Magazine says that while Americans are living a lot longer, the increased longevity has created a new financial dilemma: how to prepare for the high cost of old age. Many people will need assistance with dressing, bathing and housekeeping tasks. The article tells you what to look for when shopping for long term care insurance.

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In what is sure to be the most important Supreme Court decision in the area of long term disability claims in decades, the Court has agreed to hear the case of MetLife v. Glenn. The Court will decide whether or not the standard of review should be heightened when an ERISA insurance company is both the decider and payor of a claim. Although ERISA expressly grants federal courts jurisdiction to review the denial of employee benefits by a plan administrator or fiduciary, it does not specify what standard should govern that review. In an earlier case, the Supreme Court held that, if an administrator has been given discretion “to determine eligibility for benefits” under the terms of the benefit plan in question, federal courts can overturn eligibility determinations only if they find that the administrator has abused its discretion. In passing, the Court noted that such deferential abuse-of-discretion review might be more difficult to survive if the plan administrator’s objectivity were called into question: in a case involving “an administrator or fiduciary who is operating under a conflict of interest, that conflict must be weighed as a ‘facto[r] in determining whether there is an abuse of discretion.’”

In MetLife Insurance Co. v. Glenn, the Court will, after nearly twenty years, answer two fundamental questions that flow from Firestone’s brief reference to conflicts of interest: First, what constitutes such a conflict, or, more particularly with regard to the MetLife case, is such a conflict created when the same company both administers and funds a benefit plan? Second, when such a conflict does exist, how is it to be factored into a court’s review of an administrator’s denial of benefits?

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Senate Finance Committee ranking member Chuck Grassley (R-Iowa) this week asked 11 long-term care insurers to provide information on their business practices in response to “troubling data,” the New York Times reports. In a letter sent to Genworth Financial, Conseco, Penn Treaty American and eight other insurers, Grassley asked for detailed information on the procedures that the companies use to process policyholder claims, inquiries and denials, and whether employees receive rewards for claims denials.

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Iowa Attorney General Tom Miller is launching a probe into long-term care insurance, following complaints from seniors who say they’re not receiving the benefits they were told their policies would deliver. Miller has long taken an aggressive stance towards fraud aimed at seniors. The state ranks second in the nation in the percentage of residents age 85 and over and is often seen as a primary target of elder scams.

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Michael Moore’s new movie, Sicko, takes a hard look at the healthcare system in the US today. While the stories he presents in the movie are sometimes hard to watch, they do represent real life situations of Americans who have been treated very badly by their insurance companies. It is doubtful that the film will prompt real changes in the US healthcare system but it is almost certain that it will get people talking.

Unfortunately, many people’s experience with long term care insurance have been far from wonderful. Hilda Puth, a Southern California homemaker, took out a long-term care policy on herself in 2001 because her husband, George, had been disabled by a stroke. She wanted to be sure that if she, too, became disabled, someone would be bale to take care of her in her home.

When Pith needed knee-replacement surgery, her policy was supposed to pay $100 a day for home heat\lth services. But her insurer denied the claim.

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The New York Times reports that a Congressional committee has begun looking into business practices in the long term care insurance industry. The House Committee on Energy and Commerce has asked Conseco and the Penn Treaty American Corporation, two of the nation’s largest sellers of long-term care insurance, to produce documents showing how the companies market long-term care policies and handle policyholders claims.

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Members of Congress are calling for investigations into alleged long-term-care-insurance abuses just as the government is set to release its latest survey, showing a 97% satisfaction rate among policy claimants. This follows a report in the New York Times of a high number of claims being denied, and practices that make it “difficult – if not impossible – for policyholders to get paid.” Sen. Barack Obama, D-Ill., and Sen. Hillary Rodham Clinton, D-N.Y., have each requested that the Government Accountability Office, which provides Congress with research on public-policy issues, conduct a study of the LTC industry.