Los Angeles Times business columnist Michael Hiltzik recently wrote about retired state employees who purchased a long-term care insurance policy in 1997. Unfortunately, like many others who had purchased long term care insurance years ago, the couple could no longer afford the insurance because premiums had increased 100 percent. See, “Long-Term Care Policies: Pouring Money Down a Hole?” http://www.latimes.com/business/la-fi-hiltzik7-2010apr07,0,7567632.column.
Many people who believed they were responsibly planning for the future by purchasing long-term care insurance in the late 1980’s or early 90’s are encountering this problem: Almost every insurer selling long-term care products at that time underpriced their policies. As a result during the past decade, these carriers have successfully obtained approval from state agencies to raise the premiums for their products. It is not unusual for a premium increase to be 40 percent to 50 percent of the original price. Unfortunately, these increases come at a time when many of the policyholders are now on a fixed income and cannot afford the increased cost.
Policyholders who purchased policies before 1993 may have another critical but less publicized issue in addition to substantial premium increases: outdated protection. If policyholders purchased “nursing home” only policies, their insurance carriers will likely contend the policies do not cover the more popular assisted living facilities.
Additionally, a policyholder may have purchased a “home healthcare” benefit policy, which is intended to pay for services rendered by a home healthcare aide in one’s “home.” Although an insured may have relocated his or her residence to an assisted living facility, a carrier may not pay because it contends that the facility is not the insured’s “home.”
At Kantor & Kantor, we provide assistance to those policyholders who have been unfairly denied benefits under long-term care policies, and we have successfully argued that benefits cover assisted living facilities. If your long-term care insurer has denied benefits based on policy language, we can help.