WEDNESDAY, NOVEMBER 5, 2021
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Media Resources
Investigation of Consumer Complaints Finds Egregious Practices by Long Term Care Insurance Companies
Advocates Urge “Consumer Beware” Say Practices by Some Private Companies Take Advantage of Vulnerable Washingtonians
Washington State – According to an investigation of consumer complaints officially filed with the Washington State Office of the Insurance Commissioner (OIC), Washingtonians filed 800 complaints about long term care insurance companies in the last 6 years. Findings are based on an analysis of complaints filed between 2015 and 2021, obtained through public disclosure requests to the OIC.
While complaints were filed against 50 different companies, the complaints shared common themes:
- insurers denying or delaying claims
- unexpected large rate increases
- policy cancellations
- refusal of coverage
- confusing policy language
- inaccurate communication from insurance providers
- unsatisfactory refunds
- inflexibility when it comes to care settings
- overly complicated processes that kept people from receiving the care or benefits they paid for
Some of our most vulnerable members of society — the elderly, disabled, folks out of work to take care of family members — are the victims of these unjust practices. The report noted that claim resolution was rare. According to the analysis: “The OIC seems powerless to resolve consumer complaints. Folks are referred to the legal system, and rarely see reimbursements or refunds.”
Long term insurance companies “put the scare on us, telling us we could go bankrupt. They said I could either reduce the benefits or pay the new astronomically high premium, it was 70% higher than what I signed up for. I don’t understand how they can do that,” said Russell Morgan of Poulsbo in Kitsap County.
Cathy Jeffers was led to believe that her uncle’s long term care policy would cover the facility he went into when dementia meant he couldn’t continue to live independently. Jeffers shared: “We followed all the steps the insurance company said were required. They told us to pay the first month at the home and they would take care of the rest. Well, they ended up denying any benefit claims on the policy my uncle got while he worked for Boeing. He paid a lot of money into that policy for years thinking he was well-protected going into retirement. People don’t realize that when they need it most, these plans just aren’t there for them.”
The COVID pandemic has exacerbated the challenges too many Washingtonians face — job security, being able to afford food and housing, child care and healthcare. When someone experiences an injury, disability, or other chronic or sudden health threat like a heart attack, stroke, or major surgery, paying for extra help can be the final straw. Too many people have no choice but to spend all of their savings, or face bankruptcy, in order to cover the costs of care when an insurance company fails them. Long-term care coverage is meant to help when you cannot take care of yourself, not to exacerbate the challenges.
Nina Valerio and her husband Joe are retired professors in Seattle. Joe is very ill (multiple myeloma, sudden right-eye blindness, cognitive impairment with memory loss, prostate cancer). Valerio says,
“Metlife has denied or delayed benefits including home care aides, and the insurance company won’t cover anything more than 4 hours a day, less than $150 per day. My husband’s benefits total over $323,364.00. I am so heart-broken! He automatically paid for his annual ever-increasing premium without lapses. I have the same insurance, as well. METLIFE has broken its mission! We need help, help that we deserve and paid for without fail.”
“We were surprised to learn how many complaints against long term care insurance companies involved denial or delay of benefits,” said Walt Bowen of Senior Lobby, a member group of Washingtonians for a Responsible Future. Bowen added,
“When you’re paying high premiums, you expect good coverage. This analysis shows the real problems injured, sick, and elderly folks will face relying on private long term care insurance. Having an insurance policy should be an asset rather than a hazard. This pattern of conduct looks like an attack on people and families who are very vulnerable. This industry needs better oversight and regulation.”
The analysis was commissioned by Washingtonians for a Responsible Future coalition of organizations who supported formation of the state’s new Washington Cares Fund, which provides an affordable, convenient long term care coverage option. One of the drivers behind the need to create a public benefit for long term care was the poor track record of private insurers to provide for policyholders.
Review the full analysis here.
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