California Insurance Lawyer Blog

An article in U.S. News & World Report briefly mentions the travail our client Claire Krumpotich and her family have encountered with Conseco Senior Health Insurance Company. We've written several times before about Conseco, its financial problems, and its seeming unwillingness to make good long term care policies. Once again we have a client who has fallen victim to the company, and this time U.S. News is writing about it also. See: “Pros and Cons of Long-Term Care Insurance,” http://www.usnews.com/health/managing-your-healthcare/healthcare/articles/2009/12/21/pros-and-cons-of-long-term-care-insurance.html. While the article has a lot to say about how valuable LTC policies are if the insurer honors the terms of its contract, it fails to adequately describe the dilemmas of our client and many others like her who bought the policies years ago and are now vainly trying to get Conseco to admit their policies say what they say.

In our client’s case, Conseco continues to insist that her care does not meet her policy terms.

It appears that Conseco will not pay benefits because Claire no longer lives in a home similar to the one she resided at when she bought the policy, even though the word “home” is never defined in the policy.

Ironically, in July 2008, Conseco increased Claire’s premium payments because “[w]ith the introduction of assisted living facilities and adult day care, and the growth of home health care providers, consumers now have more options for receiving assistance than ever before. As a result, more insured’s are now using benefits and the cost of providing those benefits has increased.” Claire began paying almost $6600 a year, up from an initial premium of $470 a year when the she purchased the policy in 1990. Claire and others like her began paying for services Conseco now alleges they were never entitled to.

That sounds like insurance bad faith to us.

Unfortunately, U.S. News hasn't yet delved deep enough into the issue. The fact is that Ms. Krumpotich, and far too many others often must engage in protracted and nonsensical negotiations, and even litigation, in order to try and get claims paid. For the elderly and infirm, this is often an insurmountable challenge. A policy can look good on paper, but its value may be artificial. All we can say is read your policy carefully, research the company, and talk to others about their experience before paying for a benefit that may never materialize.