Talk about being kicked while you’re down. A beloved senior receives the devastating diagnosis of dementia, breaks a hip or has a debilitating stroke, and can no longer be cared for by loved ones. Luckily, the family purchased long-term care insurance to cover just such a situation, so that there would be financial assistance with in-home medical care, assisted living, adult day care or a nursing-home placement.
And then the insurance company wrongfully refuses to pay for the care and the medical bills multiply.
Unfortunately, too many elders and their families are experiencing just this problem, according to an October 2012 feature story in The Post and Courier of Charleston, S.C. The article tells the tale of an elderly woman with clearly documented Alzheimer’s disease whose long-term care insurance claim was denied for almost one year, after which the family sued the insurance company in federal court, alleging the insurer “wrongly delayed and denied” her claim.
After sworn testimony of company employees at depositions revealed a clear pattern of improper claim processing, the judge held that the insurer had breached the insurance contract. The parties subsequently settled out of court for a confidential figure.
Long-term care insurance is meant to plug a hole in coverage missing from regular health insurance and Medicare, which typically do not pay for nursing home care or in-home supports for the elderly when they become unable to care fully for themselves. Long-term care insurance policy coverage and premium levels vary widely. (People without substantial assets may qualify for long-term care coverage through the public benefits funded through Medicaid, a joint federal-state program. In California, for example, the Medicaid program is called Medi-Cal.)
California law extensively regulates long-term care insurance in many aspects. Anyone in California who faces a denial of a long-term care claim should speak with an experienced health care lawyer about potential legal remedies. There may be some different legal options for opposing the insurance company’s actions.
For example, California law specifically gives insurance companies, brokers and agents a “duty of honesty, and a duty of good faith and fair dealing” in their interactions with customers that concern long-term care insurance.
Claim denials likely are subject to internal review procedures within the insurance company, and state or federal regulators may provide assistance through government agencies. In addition, a variety of legal claims may be brought in state or federal lawsuits, depending on the situation.