The cost of long term health insurance is extremely high. One Bay Area couple spent a lot of their money on premiums, but in the end when they needed the payoff, it was hard to come by.
Jack and Beverly Joe celebrated 55 years of marriage before Jack suffered a stroke that left him disabled.
"I couldn't manage him anymore," said Beverly.
The couple had planned for their old age by purchasing a long term care insurance policy back in 1996.
"It's for peace of mind, really," said Beverly.
The premiums were expensive, reaching $534 per month in 2010, but Beverly figured now it would finally pay off. She contacted the carrier, Senior Health Insurance of Pennsylvania, and received a statement of covered services allowing a home health nurse at $20 per hour, up to the policy's maximum of $100 per day.
"They insisted I get a licensed nurse or registered nurse. You cannot just hire your cousin," Beverly.
Everything seemed to go as planned, until she filed her claim.
"They kept writing and telling me 'No, we can't pay that much because she's not a registered nurse.' I said, 'You asked for a registered nurse, so I gave you a registered nurse,'" said Beverly.
The company statements said Beverly had exceeded that daily maximum of $100 per day. Beverly says it's not true, that it was the company refusing to pay the maximum.
For one claim for 30-days, Beverly figured the maximum benefit would be $3,000, but the company's paid just $2,250. For a 16-day period, the maximum is $1,600. The company paid just $825.
"That's when I called 7 On Your Side," said Beverly.
We contacted Senior Health Insurance of Pennsylvania, known as SHIP. It declined to discuss the case because of privacy rules. However, shortly after we called, Beverly received some good news.
"SHIP called me and says 'We're going to send you a check for such and such.' I said 'Oh, that was fast,'" said Beverly.
The company reimbursed Beverly $1,025. Then, later it went even further. It paid her $3,100 for claims that had been denied because of a restriction in the policy.
The company said, "SHIP does not pay unwarranted claims but we do formally review each denial before it is finalized to ensure the appropriate decision is made."
Senior Health Insurance of Pennsylvania was formerly called Conseco Senior Health Insurance. We found that Conseco was fined a $500,000 in 2009 by then-California Insurance Commissioner Steve Poizner for improper denial and delays of benefits.
Senior Health Insurance of Pennsylvania tells 7 On Your Side it has since severed ties with Conseco and operates as a trust under new management.
It said, "SHIP operates without a profit motive and its mission is to use its assets only to support policyholder obligations."
Beverly says the couple paid about $70,000 in premiums over the past decade, and used only about $7,000 in benefits, before Jack died in a nursing home in March.
"Ah, it was a hassle, but thanks to you I got this money back," said Beverly.
If you are considering buying long term care insurance for yourself or a loved one, you should do a lot of research. The California Department of Insurance has plenty of information on what to look for in a long-term plan.