Aged, Frail Denied Care By Insurers

The New York Times is reporting on an alarming trend in long-term care insurance: Policy holders with legitimate claims are being denied repeatedly, possibly in the hopes that they will simply give up or die before the claim is processed. From the NYT:

Mary Rose Derks was a 65-year-old widow in 1990, when she began preparing for the day she could no longer care for herself. Every month, out of her grocery fund, she scrimped together about $100 for an insurance policy that promised to pay eventually for a room in an assisted living home.

But when she filed a claim with her insurer, Conseco, it said she had waited too long. Then it said Beehive Homes was not an approved facility, despite its state license. Eventually, Conseco argued that Mrs. Derks was not sufficiently infirm, despite her early-stage dementia and the 37 pills she takes each day.

After more than four years, Mrs. Derks, now 81, has yet to receive a penny from Conseco, while her family has paid about $70,000.

Conseco and Bankers Life “made it so hard to make a claim that people either died or gave up,” said Betty J. Hobel, a former Bankers Life agent in Cedar Rapids, Iowa.

“When someone is 70 or 80 years old,” she said, “how many times are they going to try before they just give up?”

Must read article for anyone who has a loved one with a long-term care policy.—MEGHANN MARCO

Aged, Frail and Denied Care by Their Insurers [NYT] (Thanks, Erin!)

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  1. tedyc03 says:

    THIS IS JUST WRONG.

    There are no two ways about it. There is no way this is justifiable. Absolutely NO WAY.

    There should be Congressional investigations. There should be criminal charges. There should be public shaming, beatings, and executions of the executives involved.

    Responsible people who buy insurance to make sure their families won’t be devastated by the costs of long-term care ought not be screwed like this.

    It’s just rephrensable.

  2. CaptainCrash says:

    Wasn’t this a Matt Damon movie?

  3. IC18 says:

    She would had been better off putting those $100 bills under her matters then feeding the inconsiderant souless corporation.

  4. Lars says:

    This points to why we need to have single payer solutions for these problems. Private insurers are only motivated by profit. Any other claim is hogwash. Thus this company is playing a shell game where it expects most of its clients to die before making a claim. And when they do make a claim, they do everything in their power to stop the claim from ever being paid. It’s pretty much the same in the health insurance game. Single payer solutions are the way to go.

  5. ironchef says:

    insurance companies are just legalized extortion/protection racket. When it comes time to live up to their promises, you get hosed.

  6. lincolnparadox says:


    Let’s see, $100 a month for 16 years. Let’s say that she put that money into a decent yield mutual fund every month. Assuming a 10% return every year, she would have $47,000 by the end of the 16 years. Jeez, if she put it in the bank she’d have almost $30K by now.

    And that’s what her insurance company did, with better yielding investments. It’s not rocket science. In the end, you are a better custodian for your money than anyone else. Save a little for a long time and you can retire a millionaire.

  7. Sudonum says:

    @lincolnparadox:
    Ummmm… did you read the part where her family has spent over $70k to date for her care?

    I agree this is shysterism at it’s best (worst?). My father-in-law has a policy. I read this article in the Times this morning and e-mailed my wife a copy so she can check out who his policy is through. His wife, my mother-in-law is in a long term care facility now. She wasn’t able to get a policy when he did because she already had some items in her medical history that excluded her. It’s costing him close to $60k a year.

    And for the last couple of years my wife has been bugging me to get a policy for us. Thank God I know who NOT to get a policy with now.

  8. juri squared says:

    That’s just sick.

    One good alternative to this idea is to look at retirement communities in the area. Our family paid a huge, 5-figure premium to get my grandmother into a nice retirement condo complex. The reason this has paid off so well is because the complex includes a nursing home that residents move to when they can’t care for themselves any more. Because my grandmother was a resident of the condo complex, she is guaranteed a spot in the nursing home for life whether she can pay or not.

    After around 7 years in the condo and now 7 years in the nursing home, her money is about to run out. Given the discounted rates she already pays, we have already saved more than the premium we paid to get her in there. She’s beating the odds and it looks like she’ll be around a while, so it was certainly a good gamble on our part. Not to mention the quality can’t be better, and she didn’t have to leave her friends – just move to another part of the complex.

  9. facted says:

    @: I agree insurance companies suck, but before you extoll the virtues or single payer systems, look towards our neighbors to the North or our British friends. Both countries have single payer systems that are so poor at providing services that people actually pay extra to go back to private insurance and go to private ER’s (for instance). People wait months for surgeries and for various tests (although those also take time here in the states with our current insurance system).

    While one would hope that the single payer system would squeeze out the profit from the whole medical system, I think that’s quite a mistake in belief. Our government, to date, has been shown to be far from efficient with taxpayer money in any facet of public expenditure. How many no-bid contracts can we give out? How many extra paper pushers do we need?

    Say what you want about insurance companies (and I have quite a bit to say), they are able to keep costs down by various methods (though many of these are unethical and really bordering on illegal, such as this case).

  10. ivehadenough says:

    We pay more for our insurance premiums and get less, with rising copays, and rising prescriptions. Meanwhile, all we hear in Washington is talk about reform. Find a hospital in this country that isn’t building on right now! It won’t stop until they have all of our money! http://www.ivehadenough.us

  11. Judge373 says:

    American insurance companies are evil, pure, unadulterated evil. To me, European models of healthcare are becoming more and more attractive.