[Vision2020] NY Times: Aged, Frail and Denied Care by Their Insurers

[Donovan Arnold]

Pat,
   
  This fits Moscow well, since they just voted to kick out their indigent elderly by shutting down the counties only facility for them.
   
  Best,
   
  Donovan
   
   
   
  

Saundra Lund <sslund at roadrunner.com> wrote:
  Just curious, Pat: what does your rant have to do with the article posted &
the issues raised by the article? Certainly the health care insurance
crisis is nothing new, although it sickens me each time I read about it and
look at the voting records of certain politicians (hint: the majority of
the disgusting voting records with respect to health care and insurance
aren't the voting records of Democrats).

Isn't this just the kind of situation the Republicans want to let the market
-- supply & demand -- sort out??? 

If not, then what's your solution? Clearly you think it's a problem since
you mention insurance companies running amok, so how would you solve it
given the climate the Big Business, which includes insurance companies, must
operate unfettered so that they can make their profits with no regard to who
they screw over in the process.

Rather than ranting again about the Democrats and attacking public schools,
how about doing something constructive like offering some solutions???


Saundra Lund
Moscow, ID

The only thing necessary for the triumph of evil is for good people to do
nothing.
- Edmund Burke

***** Original material contained herein is Copyright 2006 through life plus
70 years, Saundra Lund.  Do not copy, forward, excerpt, or reproduce outside
the Vision 2020 forum without the express written permission of the
author.*****


-----Original Message-----
From: vision2020-bounces at moscow.com [mailto:vision2020-bounces at moscow.com]
On Behalf Of Pat Kraut
Sent: Monday, March 26, 2007 10:45 AM
To: vision2020
Subject: Re: [Vision2020] NY Times: Aged, Frail and Denied Care by Their
Insurers

While the dems dilly dally with who the AG is this country has some real
problems...such as insurance run amok. The dems do not seem to realize the
last vote was against the repubs not for dems and they are diminishing so
much power from the office of the president it is dangerous. They and you
may not like Bush but the next president is going to have to work within the
same protocol that they are trying to force on Bush. They really do not get
what they are doing. And so many citizens of the US are so unaware of the
truth of the Constitution that they do not understand. I blame the public
school system because of the dumbing down of they classrooms. 



----- Original Message ----- 

From: Art Deco 
To: Vision 2020 
Sent: Monday, March 26, 2007 6:51 AM
Subject: [Vision2020] NY Times: Aged,Frail and Denied Care by Their
Insurers

The New York Times 
Printer Friendly Format
Sponsored By
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ke/> 


________________________________

March 26, 2007

Aged, Frail and Denied Care by Their Insurers 

By CHARLES DUHIGG
/index.html?inline=nyt-per> 

CONRAD, Mont. — 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. 

On a May afternoon in 2002, after bouts of hypertension
/bloodpressure/index.html?inline=nyt-classifier> and diabetes
/diabetes/index.html?inline=nyt-classifier> had hospitalized her dozens of
times, Mrs. Derks reluctantly agreed that it was time. She shed a few tears,
watched her family pack her favorite blankets and rode to Beehive Homes,
five blocks from her daughter’s farm equipment dealership.

At least, Mrs. Derks said at the time, she would not be a financial
burden on her family.

But when she filed a claim with her insurer, Conseco
/custom/nyt-com/html-companyprofile.asp&symb=CNOPRB;CNOWS> , 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. Her daughter
has sent Conseco dozens of bulky envelopes and spent hours on the phone.
Each time the answer is the same: Denied.

Tens of thousands of elderly Americans have received life-prolonging
care as a result of their long-term-care policies. With more than eight
million customers, such insurance is one of the many products that companies
are pitching to older Americans reaching retirement.

Yet thousands of policyholders say they have received only excuses
about why insurers will not pay. Interviews by The New York Times
/custom/nyt-com/html-companyprofile.asp&symb=> and confidential depositions
indicate that some long-term-care insurers have developed procedures that
make it difficult — if not impossible — for policyholders to get paid. A
review of more than 400 of the thousands of grievances and lawsuits filed in
recent years shows elderly policyholders confronting unnecessary delays and
overwhelming bureaucracies. In California alone, nearly one in every four
long-term-care claims was denied in 2005, according to the state.

“The bottom line is that insurance companies make money when they
don’t pay claims,” said Mary Beth Senkewicz, who resigned last year as a
senior executive at the National Association of Insurance Commissioners.
“They’ll do anything to avoid paying, because if they wait long enough, they
know the policyholders will die.” 

In 2003, a subsidiary of Conseco, Bankers Life and Casualty, sent an
85-year-old woman suffering from dementia the wrong form to fill out,
according to a lawsuit, then denied her claim because of improper paperwork.
Last year, according to another pending suit, the insurer Penn Treaty
American
/custom/nyt-com/html-companyprofile.asp&symb=PTA> decided that a
92-year-old man had so improved that he should leave his nursing home
despite his forgetfulness, anxiety and doctor’s orders to seek continued
care. Another suit contended that a company owned by the John Hancock
Insurance Company had tried to rescind the coverage of a 72-year-old man
when he was diagnosed with Alzheimer’s
/alzheimers/index.html?inline=nyt-classifier> disease four years after
buying the policy.

In court filings, all three companies said the denials had been
proper. They declined further comment on the cases, though Bankers Life and
John Hancock eventually settled for unspecified amounts. 

In general, insurers say criticisms of claims-handling are unfair
because most policyholders are paid promptly and some denials are necessary
to root out fraud. 

In a statement, Conseco said the company “is committed to the
highest standards for ethics, fairness and accountability, and strives to
pay all claims in accordance with policy contracts.” Penn Treaty said in a
statement, “We strive to treat all policyholders fairly, and to deliver the
best, most efficient evaluation of their claim as possible.”

But policyholders have lodged thousands of complaints against the
major long-term-care insurers. A disproportionate number have focused on
Conseco, its affiliate, Bankers Life, and Penn Treaty. In 2005, Conseco
received more than one complaint regarding long-term-care insurance for
every 383 such policyholders, according to data from the insurance
commissioners’ association. Penn Treaty received one complaint for every
1,207 long-term-care policyholders. (The complaints touch on a variety of
topics, including claims handling, price increases and advertising methods.)

By comparison, Genworth Financial
/custom/nyt-com/html-companyprofile.asp&symb=GNWPRE> , the largest
long-term-care insurer, received only one complaint for every 12,434
policies.

Conseco is among the nation’s largest insurers, collecting premiums
worth more than $4.2 billion in 2006, of which long-term-care policies
contributed 21 percent. Penn Treaty focuses primarily on long-term-care
products and collected premiums of about $320 million in 2004, the last year
the company filed an audited annual report.

In depositions and interviews, current and former employees at
Conseco, Bankers Life and Penn Treaty described business practices that
denied or delayed policyholders’ claims for seemingly trivial reasons.
Employees said they had been prohibited from making phone calls to
policyholders and that claims had been abandoned without informing
policyholders. Such tactics, advocates for the elderly say, are becoming
common throughout the industry.

“These companies have essentially turned their bureaucracies into
profit centers,” said Glenn R. Kantor, a California lawyer who has
represented policyholders. 

Yet these concerns have been ignored by state regulators, advocates
say, and have gone unnoticed by federal lawmakers who recently passed
incentives intended to promote purchases of long-term-care policies, in the
hopes of forestalling a Medicare funding crisis.

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?”

A Race to Sell Policies

When Mrs. Derks bought her long-term-care policy from a door-to-door
salesman in 1990, she was unaware that she represented the insurance
industry’s newest gold mine.

Her husband had died eight years earlier of a stroke, leaving her to
run a barley farm in northern Montana, where she lived with her three
children and her aging mother. As she watched her own parent decline, Mrs.
Derks became preoccupied with sparing her children the expense of her final
years.

“She was terrified that she would bankrupt us or get sent to a
public nursing home,” said Ken E. Wheeler, her son-in-law. 

At the time, long-term-care policies, which can cover the costs of
assisted-living facilities, nursing homes and at-home care, were becoming
one of the insurance industry’s fastest-growing products. Companies like
Conseco, Bankers Life and Penn Treaty were aggressively signing up clients
who were not in the best health at rates far below their competitors’ in
order to win more business, former agents said. From 1991 to 1999,
long-term-care sales helped drive total revenue gains of roughly 500 percent
each at Penn Treaty and Conseco, including its affiliate Bankers Life. 

Cracks in the business, however, soon started to appear. Insurance
executives began warning they had underestimated how long policyholders
would live after entering nursing homes. The costs of treating Alzheimer’s,
Parkinson’s
/parkinsonsdisease/index.html?inline=nyt-classifier> and diabetes
ballooned. 

As insurers began realizing their miscalculations, they persuaded
insurance commissioners in California, Pennsylvania, Florida and other
states to approve price increases of as much as 40 percent a year. 

By 2002, Conseco’s long-term-care payouts exceeded revenue. Those
and other disappointing results prompted the company to file for bankruptcy,
from which it emerged 10 months later.

That same year, Mrs. Derks entered Beehive Homes, a cheery, 12-bed
center one block from the Prairie View elementary school. In the previous
four years, she had been hospitalized more than two dozen times. She had
once lain unconscious in her living room for a day and a half. Her physician
ordered her into an assisted-living center.

Initially, Conseco told Mrs. Derks’s daughter, Jackie Wheeler, that
her claim would go through smoothly, Mrs. Wheeler said. The family began
paying Beehive Homes’s $1,900 monthly fee. 

But three months after submitting her claim, Mrs. Derks received a
letter from Conseco saying she had waited too long, and her earliest costs
would not be reimbursed. Two months later, she received another letter
denying her entire claim because she had not submitted proof of illness. 

Yet a copy of Mrs. Derks’s policy, sent to the Wheelers by Conseco
in 2004 and reviewed by The Times, mentions no requirement for proof of
illness. The policy requires only that the confinement be ordered by a
physician, and it allows for a notice of claim to be sent “as soon as
reasonably possible.” 

Mrs. Derks’s daughter called Conseco and explained that her mother
could not recall the date or people’s names and had started multiple fires
by forgetting to turn off the stove. She sent letters stating that her
mother needed assistance to dress, eat, go to the bathroom and inject
insulin. 

“This is medically necessary!!!” reads a form signed by Mrs. Derks’s
physician in 2004. “This has been filled out three times! This person needs
assistance!”

Seven months later, Conseco sent another letter, this time denying
Mrs. Derks’s claim because her policy “requires a staffed registered nurse
24 hours per day.” Her policy does not mention such a requirement. 

Conseco also sent letters denying Mrs. Derks’s claim because her
policy had an “assisted living facility rider,” and because Mrs. Derks “does
not have an assisted living facility rider.” In all, the family received
more than a dozen letters from the company. Many contradict one another, and
frequently cite requirements that are nowhere mentioned in Mrs. Derks’s
policy.

“There was always a new step in the runaround,” Mrs. Wheeler said.
“It felt like everything was designed to make me just go away.”

Over two years, Mrs. Wheeler estimated, she called the company about
100 times. Twice a month, she sent envelopes stuffed with medical records.
Some afternoons, she spent hours making calls. After one conversation, Mrs.
Wheeler slammed down the phone and started to cry. Then she drove to Beehive
Homes, where her mother was surrounded by faded photos of her childhood and
boxes of adult diapers. 

“I wouldn’t tell her about the problems we were having with Conseco,
because I knew it would cause her so much worry,” Mrs. Wheeler said.

Eventually, the Wheelers sold part of their John Deere dealership to
raise money to pay for her mother’s care. In October 2006, they sued.

Conseco, asked by a reporter about the company’s handling of the
Derks claim, declined to answer, citing the pending litigation. In court
documents, the company denied Mrs. Derks’s allegations without specifying
why her claim was denied. 

“We did everything they asked,” Mrs. Wheeler said. “And this company
just treats us like dirt.”

Tales of Bureaucracy

Inside the large Conseco headquarters in Carmel, Ind., scores of
employees receive the flood of documents and calls that arrive each day. At
times, according to depositions and interviews, that deluge became so
overwhelming that documents were lost, calls went unreturned and mistakes
occurred.

Some employees describe vast mailrooms where documents appear and
disappear. One call-center representative said he was afforded an average of
only four minutes to handle each policyholder’s call, no matter how
complicated the questions. Employees said they were instructed not to say
when the company was behind in processing paperwork, even when the backlog
extended to 45 days. Workers were prohibited from contacting each other by
phone, although such calls might have quickly resolved obstacles, according
to depositions.

Conseco, asked in detail about the company’s policies, declined to
respond. 

Bureaucratic obstacles were pervasive, according to interviews with
10 former Conseco employees and depositions of more than a dozen others.
Robert W. Ragle, a former Bankers Life branch manager, once contacted the
claims department on behalf of a client, and “they just laughed us off the
phone,” he said. “Their mentality is to keep every dollar they can.” Mr.
Ragle was dismissed by Bankers Life in 2002. He sued for wrongful
termination and settled out of court. 

In lawsuits, complaints and interviews, policyholders contend that
Conseco, Bankers Life or Penn Treaty denied claims because policyholders
failed to submit unimportant paperwork; because daily nursing notes did not
detail minute procedures; because policyholders filled out the wrong forms
after receiving them from the insurance companies; and because facilities
were deemed inappropriate even though they were licensed by state
regulators.

In depositions conducted on behalf of angry policyholders, Conseco
employees described bureaucratic obstacles that prevented payment of claims.
Those depositions were sealed in settlement agreements but were obtained by
The Times.

In a 2006 deposition, a Bankers Life and Conseco claims adjuster,
Teresa Carbonel, testified that she denied claims because of missing records
but was prohibited from calling nursing homes or physicians to request the
documents. She also testified that when a claim was denied, she was
forbidden to phone a policyholder, but instead used a time-consuming mailing
system.

Ms. Carbonel’s testimony, recorded during lawsuit on behalf of a
94-year-old policyholder, Rhodes K. Scherer, also disclosed that if
policyholders did not mail requested documents within 21 days, Conseco might
abandon their claim, sometimes without informing them. 

In the case of Mr. Scherer, who was institutionalized after a
bathroom fall, it was difficult to obtain a response, Ms. Carbonel said,
because the company’s requests were mailed to his home address, rather than
the nursing center where the company had been notified that he had moved.
Ms. Carbonel, who is no longer with the company, did not return calls.
Conseco declined to comment on her testimony. 

In another deposition, Conseco’s then-senior manager for long-term-
care claims, Jose S. Torres, testified that Conseco would sometimes withhold
payments until it received documents not required by customers’ policies. In
Mr. Scherer’s case, Mr. Torres said, the company refused to pay his nursing
home costs unless he sent copies of the home’s license, payment invoices and
medical records, even though those documents had no bearing on approving his
claim. 

Mr. Scherer’s claim “was handled not in the best way, but it was
handled according to the processes and procedures placed at the time,” Mr.
Torres testified. “Mistakes are going to be made, you know.”

Other executives testified that when Conseco appeared to have lost
important documents in Mr. Scherer’s claim, no investigation was initiated.
Shawn Michael Schechter, a Conseco claims supervisor who left the company in
2005 on positive terms, according to the deposition, testified that the
handling of Mr. Scherer’s claim violated the principle of good faith, which
requires insurance companies to treat customers fairly.

“The claim adjuster could have made that very easy and not have put
the burden back onto the policyholder,” he testified. 

Mr. Torres did not return calls. Mr. Schechter declined to answer
questions. 

Mr. Scherer died in 2004 without receiving benefits from Conseco.
His estate settled with the company in February for an undisclosed amount,
according to a lawyer representing the estate.

Conseco declined to discuss its complaint history or individual
cases, citing confidentiality agreements. In its statement, the company said
that in 2006, Conseco paid nearly $2.3 billion on 9.8 million claims in all

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