Many seniors want to avoid burdening their families so they buy insurance to cover the high cost of caretakers and nursing homes. Now, this class action suit claims one insurance company has cheated thousands of elderly folks out of benefits when they needed them the most.
Beverly Joe thought a long-term care insurance policy would bring peace of mind in her old age. Instead, it brought endless fights with the insurance company. "I didn't want to deal with it any more because they were so hardnosed it was getting me nervous," she said.
It began when her husband, Jack, needed a home nurse. Beverly filed claims with the carrier -- Senior Health Insurance Company of Pennsylvania, known as SHIP. "That's when they started giving me all this trouble, taking their time. They tried to put all kinds of obstacles in your path," said Beverly.
Beverly complained that the company denied full benefits for the caregiver and later said she she didn't provide enough data to claim nursing home benefits. "They keep on saying they don't owe me that much, they can't pay me that much," said Beverly.
The couple paid more than $60,000 in premiums over the years and yet Beverly was struggling to get her benefits. She contacted 7 On Your Side twice for help and in the end, the company did pay her an additional $11,000 for benefits she claimed
But Beverly was not alone.
"They're making these people jump through hoops," said Harvey Rosenfield of Consumer Watchdog.
Consumer Watchdog, the group responsible for capping auto insurance rates in California, just filed a class action lawsuit against SHIP in San Bernadino County. The lawsuit claims there is "an unfair and unlawful scheme perpetrated by SHIP to delay and deny valid claims for coverage." It cites the case of 87-year-old policyholder William Hall of San Bernadino County, saying he was forced to "deplete savings and burn through fixed income" because of SHIP's refusal to pay benefits for nursing care.
"Now he's being supported by his family, by his son, exactly the situation he tried to avoid when he bought this policy," said Rosenfield.
7 On Your Side asked SHIP about the lawsuit; it said: "SHIP received a complaint filed by one policyholder who claims he wasn't treated fairly. We are in the process of reviewing his complaint and we can assure you this will be handled appropriately. SHIP focuses on ensuring that eligible claims are paid in accordance with the policy contracts that its customers have purchased, and operates without a profit motive. SHIP's sole mission is to pay eligible claims accurately and timely, and has established a very strong record of compliance."
Beverly says she is not surprised aboutt he suit and after pouring $60,000 into her premiums, she is glad just to get some of it back. "Something is better than nothing. So, I get it back and forget them. I just didn't want to deal with them anymore," she said.
The lawsuit asks for a court order stopping SHIP from unfairly denying claims for its 10,000 policyholders in California. SHIP says it handles all claims fairly and operates "without profit motive."
If you have a problem with long-term care insurance, contact Michael Finney.