Buying long-term care insurance is supposed to be a good thing--it means you are prepared to meet your long-term care needs. But the purchase can turn into a nightmare if the insurance company refuses to pay for your care. One long-term care insurance company in particular, Bankers Life and Casualty, is gaining a reputation for not paying claims.
A recent report by CBS News highlighted some of the problems Bankers Life customers have been experiencing. The report recounts the story of 93-year-old Timber Harwood, who paid long-term care insurance premiums for years. When he needed home health care after a serious fall, the insurance company gave his family the runaround, repeatedly claiming for almost a year that hundreds of pages of paperwork were missing.
Consumer complaint message boards such as PissedConsumer.com, ConsumerAffairs.com, and ComplaintsBoard.com have lit up with complaints about Bankers Life either denying claims outright or using delaying tactics to wear down policyholders.
This is not news to Massachusetts elder law attorney and ElderLawAnswers president Harry S. Margolis, several of whose clients have experienced problems with Bankers Life. "After paying in premiums for years so that their eventual need for long-term care will be covered, they have received denials for a range of invalid reasons," Margolis reports. When Margolis's firm has gotten involved -- sometimes threatening litigation -- Bankers Life has ultimately paid the claims. Although that is a great result, customers have to pay out of pocket while they wait for the claim to be paid, which is stressful.
Bankers Life's behavior is nothing new. In 2008, 40 states found Bankers Life's parent company Conseco, Inc. (now called CNO), committed a pattern of consumer harm in the long-term care insurance business. While not admitting any wrongdoing, the company agreed to pay $2.3 million in fines and $30 million for system improvements and restitution. A 2007 New York Times article described how Conseco and Bankers Life employees were prohibited from calling policyholders in order to make things so hard for policyholders that they would either give up or die.
In addition, a long-term care policyholder has initiated a class action lawsuit against Senior Health Insurance Co. of Pennsylvania, which was previously owned by Conseco before it was transferred into an independent trust. The lawsuit alleges the company tried to avoid reimbursing policyholders for long-term care by ignoring or taking an unreasonably long time to respond to claims and requiring unnecessary paperwork and medical examinations.
Bankers Life responded to our request for comment with this statement:
Bankers Life and Casualty is committed to the highest standards for ethics, fairness and accountability, and strives to pay all claims in accordance with policy contracts in a timely manner. We take all complaints seriously, and work with all parties to resolve issues as soon as possible. We fulfill our obligations to our policyholders based on specific policy language, state requirements and the claim information submitted. In 2011, Bankers paid in excess of $400 million on long-term care claims and benefits to our more than 300,000 long-term care customers nationwide.
If you experience a problem with your long-term care insurance company, contact an elder law attorney.