Putting The 'Care' Into Long-Term Care Insurance -
Some States Taking Action
insurance companies are slow to pay and have been known to deny payments
Foden-Vencil, Oregon Public Broadcasting
17, 2012 - Long-term care insurance is the financial equivalent of doing
push-ups -- it's good for you, but not too much fun. As a result, not
many people buy long-term care insurance, which pays for care when they
get too old or sick to take care of their basic needs like cooking or
The insurance is expensive, and most people hope
they will never need it or that their children or other family members
will look after them instead.
But long-term care insurance has another problem
too: Some insurance companies are slow to pay and have been known to
deny payments completely.
Many states, including Oregon, Kansas, and Alabama,
are adopting new regulations to give consumers some help.
Oregon, for example, has new rules on how to appeal
a denial on a long-term care insurance claim. Previously, the only way
to appeal a decision was in court, an arduous process for a person who
may be elderly, sick and in a nursing home.
Cheryl Martinis, with the state's consumer services
department, says Oregon set up a new appeals process to determine when
claims are wrongfully denied.
"In the past with long-term care insurance,
consumers haven't had the same rights that they have had with other
health insurance," Martinis explains, "and that is to have an undisputed
claim paid within 30 days, and so now that is a right in Oregon. And
also, we haven't had an appeals process in the past, and now we do."
Jim Chenoweth had to call on the Oregon insurance
commissioner's office recently to get a claim paid. Chenoweth, 81,
decided to get long-term care insurance a few years ago after he had
spent time caring for his ailing wife.
"I didn't want to have my kids or anyone else take
care of me," says Chenoweth, who estimates he's paid about $30,000 in
After Chenoweth had a couple of falls, his
daughter, Joyce Chenoweth hired a woman to come in to help him shower,
but when they tried to make a claim, their insurance company gave them
the run-around. She says both she and her father got very frustrated.
"They kept messing around with me," Joyce Chenoweth
says. "They said, 'I'll do this, I'll do this, I'll do this,' and they
never did anything."
Jim Chenoweth also had his share of calls to the
insurer. "They kept passing the buck back and forth, back and forth," he
says. "I got upset, my daughter got upset and we finally got a hold of
the insurance commission and then they started getting it together."
The whole process was long and confusing, says
Joyce Chenoweth. "I just don't know how older people can figure this
stuff out, when it took me months and months and months."
Sue Lefferts, who works at the Oregon Insurance
Division call center as a consumer advocate, helps people negotiate with
their insurance companies and navigate the new appeals process. Some of
the more common complaints she says, are that insurance companies don't
think claimants are sufficiently incapacitated to need help, or that the
person hasn't filed the right paperwork.
"We are seeing more and more people who are making
claims under these policies and so it's kind of brought to the
forefront," Lefferts says.
"We do have problems with companies that sometimes
delay payment. They lose the paperwork," says Sandy Praeger, the
association's chairwoman and the insurance commissioner for Kansas. "But
I think that's what state departments of insurance are there for and
that's to help people get the benefits they're entitled to."
But those benefits are outlined in consumer
contracts, say the insurance companies. And the fine print has to be
"Often individuals submit incomplete paperwork. Or
they don't read their policy or talk to the insurance company to find
out exactly what's qualified for a qualified claim," says Jesse Slome,
with the American Association for
Long-Term Care Insurance.
For example, he says, he recently talked to a woman
whose mother moved into a care facility that wasn't licensed by the
state. But she liked the home and didn't move -- so the insurance
company didn't pay.
"If you make an exception for one person, you then
have set precedents, and you have to make the exception for everybody,
who says, 'Listen, I've decided I want my care on a cruise line. And so
now, pay up,'" Slome says.