Long Term Care Insurance: The Denial Game

Seattle, WATwo years ago Scott's father had a stroke; his hospital bills were covered by Medicare and long term insurance care through Life Investors Insurance Company would cover him when he was placed in an adult family home. Sounds simple enough; Scott and his mother went through the process of getting him certified with Life Investors, but it's turned out to be a two-year battle, with no end in sight.

During his time in hospital, Scott says his Dad was also diagnosed with Alzheimer's disease; an adult family home was needed to get the appropriate care. The insurance company still insisted that they go through this "certification process" but Scott ran up against a brick wall right away. "The policy is supposed to have a customer service representative assigned to each policy holder, but that was not the case with us," Scott says.

"I got a different person each time I phoned their call center and had to explain everything over and over again. They want you to submit everything in writing, then they will respond in 10 working days but nothing was getting done. They refused to transfer me to a supervisor so by this time, Dad has depleted his savings and they have still not completed their evaluation.

This "process" took about 90 days. At this point I was getting laid off work which made it worse and I have now moved into the family home and we are on a wait list for an assisted living center for both of them: my mother now has anxiety disorder and other problems.

Mom wants to take care of Dad and she insists on trying but it isn't working out. We had to move my Dad home because we are out of money and I have listed their home for sale and I have loaned them some money.

Two weeks after he got home, Life Investors approved long term care insurance but here is the rub: they are now saying that since he was well enough to move home, obviously he doesn't need the service so he has been denied benefits. During that time, I moved them both to an assisted living center (which I paid for) to try and prepare the home for sale.

About one month later, Mum had a total breakdown and had to got to the geriatric/psychiatric center herself! Now I have found another place for them to live that has everything they need and on the surface appears to meet the insurers' criteria. But two months after they moved in, the insurer said they cannot stay there! Apparently it didn't meet their criteria because they will only pay for a skilled nursing facility, even though the policy has a custodial care clause. In other words, they are stalling.

About one year ago I complained to the state insurance commissioner who is now involved with this case. At this point I know the policy word for word. I went to three doctors and got each of them to certify that an adult family home would meet the policy criteria that they reviewed. But the insurer said it didn't count because these doctors were not their doctors!

After many conversations Life Investors agreed on this place and they have finally been paying the policy. However, every month I have to submit in writing the statements; they will not accept them until the next month so I have to pre-pay the facility; they won't do a direct deposit or pay the facility directly—everything is by paper. I have to phone them 10 business days after I pay, and frequently they 'forget' to pay. And of course I talk to a different rep each time.

My parents have an unlimited payout policy for long term care insurance but it won't pay for an unskilled nursing home. The insurer is betting they can push you away from anything that can be custodial care because you can't afford skilled nursing—they won't go for assisted living even if they have nursing on staff. And it would save them money but they won't do it; they just hope we will go away. "