California Insurance Lawyer Blog

This week, New York Times blog, “The New Old Age,” answers questions about long-term care coverage and how the C.L.A.S.S. Act, a bill introduced by Sen. Edward Kennedy (D-Mass) that would establish a national long-term care insurance program, enjoys the possibility of being incorporated into congressional health care legislation. “Congress Tackles Long-Term Care.”

Most analysts appear surprised that the concept of a national LTC program has moved from the theoretical to a possibility of approval. Three congressional committees, however, still need to weigh in with a vote on the program.

Howard Gleckman, a senior researcher at the Urban Institute told the Times “that while some insurance companies oppose the idea, ‘the biggest problem the C.L.A.S.S. Act has isn’t opposition, but indifference — a sense on the Hill that they just don’t want to mess with long-term care.’”

Whether or not the measure passes as part of health care reform – which faces its own serious obstacles – placing the issue of the lack of long-term care coverage in the United States on the front page of major newspapers is helpful and informative for the millions of Americans who can still afford to purchase private coverage or have the capacity to push their employers to offer LTC as part of a benefits package.

The Long Island Business News reports that many people think they have enough insurance until they need the policy. Then they learn its limitations, find they have insufficient coverage, or discover “loopholes big enough to drive a truck through.” Laura Glasser, “With Insurance, the Fine Print Matters,” June 30, 2009. This is particularly true, the article reports, for health and long-term care policyholders because they aren’t reading their policies to understand coverage limitations.

“One reason many people get surprises is they don’t know much about their coverage to begin with. If you’ve read your policy lately, you’re in the minority. Most health policies, for instance, cover up to $1 million in lifetime benefits. But most people don’t know that,” writes Glasser. Here’s what two insurance industry executives had to say about the situation:
“The information’s there,” said Ian Laird, director of strategy, sales and programs for Empire Blue Cross Blue Shield. “It’s just in a document that I don’t think the average person bothers to read.”

“You expect people to read their benefits,” said William Golden, chief executive of UnitedHealthcare’s health plan for New York, of the source of many surprises. “I’m not sure that really happens all the time. It’s important to read the small print.”
Here are two insurance executives admitting in black and white that they are selling policies that people don’t read, filled with fine print that limits coverage, and they appear just fine with the situation. In fact, one wonders if they might be taking advantage of this information by filling policies with fine print loopholes that end up surprising many people.

We say it everyday…and we’ll say it again here: READ YOUR POLICY BEFORE YOU NEED IT. If you don’t understand something, ask someone who can help.

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