Some long-term healthcare policies not paying up

People think they're doing the right thing by buying long-term healthcare insurance and paying for it for many years, before they need it, to make sure they're cared for in their old age.

As many as 7 million Americans have long-term care policies, believing the insurance will pay for their home healthcare or care in an assisted living facility or nursing home.

However, reports CBS News investigative correspondent Sharyl Attkisson, many customers are finding that, when it comes time for insurance companies to pay, they're balking.

93-year old Timber Harwood's story is a case in point.

The father of five has always taken care of his family and planned ahead.

For years, he faithfully paid premiums for long- term care insurance.

His daughter, Gwen Wedd, says, "He was very conscientious and proactive at getting a healthcare plan that would help him down the road."

They needed the help in 2010, when Timber suffered a serious fall. A home health aide helps him with dressing, meals and medicine.

But when it came time for the insurance company, Bankers Life, to pay, all the family got was the runaround. They repeatedly faxed hundreds of pages of required documentation.

"The company would say they didn't get the faxes," Wedd says, "so, we sent what, three or 400 pages in an overnight (mail). Then they (said they) lost that. They (said they) couldn't find it anywhere, even though someone in the office signed for it."

Their faxes lost, their mail lost, their paperwork missing -- that went on day-in and day-out for almost a year -- all while Timber spent down his savings.

Finally, the family turned to Timber's niece, Sandy Praeger.

When told the story almost sounds like death by a thousand cuts, Praeger observed, "You're trying to do the best for your loved one, and then you're having to fight for something you feel you are entitled to."

Praeger was speaking as more than Timber's relative. It so happens she's also Kansas' lead insurance regulator. And she knows Bankers Life all too well.

Hundreds of policyholders had complained the company beat them down with bureaucracy -- and counted on them to be too sick to fight back.

In 2008, Kansas and 39 other states had found a "pattern of consumer harm" at Bankers Life that included unjustified delays and bad recordkeeping.

"They were able to demonstrate a pattern that appeared to be at least designed to frustrate people," Praeger says.

Bankers Life and a sister company eventually admitted no wrongdoing -- but paid $32 million for fines, restitution and system improvements.

Yet, complaints continued to grow. A CBS News analysis found that, in 2010, Bankers Life's market share had shrunk to less than six percent, but the company drew one-third of the complaints reported by state insurance commissioners.

Bankers Life wouldn't talk with CBS News, citing privacy concerns. In a statement, it said it paid $1.3 billion dollars to 1.3 million customers, including long-term care policyholders, and is "committed to the highest standards for ethics, fairness and accountability."

Once Praeger got involved, Timber's claims from the past year finally got paid. But his struggle wasn't over.

Bankers Life recently questioned Timber over the phone and concluded he's too healthy to continue getting home health care -- a finding his family disputes - but says they're too worn down to fight.

Says Wedd, "How sad it was for him to feel ... like he'd failed, almost. That was the worst part."

Timber's family says, instead of providing peace of mind, the long-term care policy and company they counted on only left them worried about his future.

Putting things in perspective: Certainly, many people get paid and are happy with their insurance. But CBS News spoke to experts who say that, for a lot of others, long-term care insurance isn't paying as advertised.

Even some insurance companies now admit they didn't realize how expensive it would be -- and probably underestimated what they needed in premiums to stay afloat. So, customers may be faced with hefty premium increases after they've paid on policies for years, at a time when they can't afford it.

That's just one issue; there are still all sorts of kinks to be worked out in this relatively new area of insurance.

Sharyl Attkisson On Twitter »
Sharyl Attkisson is a CBS News investigative correspondent based in Washington. All of her stories, videos and blogs are available here.

27 Comments Add a Comment

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rorayner says:: My family has been trying to collect on a policy from Bankers that my parents have paid premiums on for 20 years. Talk about the run around. Well now since my father has passed and mom is in a nursing home we need that money for her care. It was validating to hear that we are not the only ones drowning in their muck and protocols, but no one has given me a suggestion of how to proceed to get what we are due. Any tips out there or government regulatory agencies we can contact? Send HELP please. I'm in marketing and working on a smear campaign to "out" them to the world.; reply

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fiveappels says:: I have been dealing with Bankers Life & Casualty since September and it has been a painful experience. I own a homecare agency and trying to be nice and not requesting client pay me directly. I fax bills & carenotes multiple times either they can't read them, can't find them or wait 10 days to tell me they can't read them. Waiting and calling for payment when assignment was given by the clients POA --still no payment and eventually checks mailed, not to me but to client and takes another few days for them to write me a check for payment. My advise to anybody is get paid directly and let client struggle to get repayment. The people are not helpful when you call and only tell you it takes 10 days to process a claim. Still waiting in NJ; reply

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muriel624 says:: It is terribly distressing to see what this family has had to go through. The problem is not long term care insurance. The problem is Bankers Life. I know a family that told me they'd probably be dead before they saw a dime (this was after a claim).
I myself own long term care and I bought it from Genworth when it was G.E. I have been impressed with this company because I do know 2 families that had it and were extremely happy. One couple only had their policy for 6 months when the husband became ill suddenly and after 3 1/2 months in the hospital and almost dying, came home, made their claim, and had excellent advice from a care coordinator. This family hired people they knew because Genworth is the only company that doesn't require a caregiver be certified. After receiving benefits for almost 1 year, he ended the claim. His remark to me was that he "didn't want to be a pig since I'll proably will need it again." There are more good stories than bad. Like anything else, it's important to be with a good company that honors claims made by their policyholders. I have 3 adult children in their 30's and 40's and I've bought them policies because it gives me peace of mind. I felt I'd rather do that them leave them money when I'm gone.; reply

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pwpend says:: I have been a LTC insurance salesman since 1989...very proudly. Truth is to succeed in this business you have to be a masochistic genius (term borrowed from an industry promoter). I have sold 860 LTC policies and over 170 people have collected on their policies. Some still are +15 years later. I do not work with Bankers Life, but I have spoken with many people over the years who have collected from Bankers Life LTC policies with no problem. Do carriers screw up sometimes or even a lot of times? Yes. Do they need to improve? Probably. Is their a conspiracy to screw the seniors and keep their insurance dollars. I highly doubt it. If that were their intent, then why would they not accept certain people who apply for the coverage? How about CBS do a piece on all of the people denied Social Security disability benefits by their own government. I believe a significant % of those who apply are denied on their first attempt. Does that mean our government is bad. No. My concern is that stories like this will give more people an excuse to not purchase LTC insurance. This would he a shame for them, their families, and their bank accounts.; reply

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saracakes says:

We purchased long term care from Banker's Life; premiums climbed out of sight and we converted to "paid up policies". Phone conversations with Banker's Life confirming change give us little hope of ever collecting any of OUR money. I commented," I guess we will never see a dime of this money!" ; phone agent laughed and said "that's right." Bankere's Life harassed me by phone and letters after that call.
I am glad we did not pay more . Alabama Insurance Commissioner should investigate Banker's Life as shoould Medicare/Healthspring that cover us.I am contacting these agencies with this CBS Investigative Report.
Thanks CBS


pwpend replies:: linkicon reporticon emailicon; Define out of sight? How much? You likely would have been better off cutting the benefits back if you could not afford the "out of sight" premiums.

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mun4u2c says:

As an agent, I have gone out several times and assisted people with their claims on policies I never made a dime on. I know that I do the right thing and sell policies that help people. Usvision, you and your branch might have been in the business of not helping people and doing the wrong thing, but there are a lot of agents that really do the right thing day in and day out. Dont lump as all together and make us out to be bad people when I know I am doing a good service and I have clients that truly appreciate the service we provide.


USVision replies:: linkicon reporticon emailicon; Your company is in the business of not helping people. The agents are pawns. The branch offices are not going to help anyone. Remember, they are too busy operating their telemarketing sweat shop. You know, setting up those Medicare info appointments, that info about the 'changes in Medicare',doing those little 'how to get in the door' training sessions, the ones that are much more important than product training and suitability. If you are concerned about being 'lumped' in with the rest of your disreputable company, why don't you pick what's left of your morals and pride, and take your well meaning good service to a company with a better rating than D by Weiss ratings. How's that agent puppymill goin over there in your branch?
We understand how difficult it is to leave. Those chargebacks will be coming. Plan well. You deserve better than Bankers Life and you know it. The only thing that makes you a 'bad' person is knowing the truth and not doing anything about it. So do something.


USVision replies:: linkicon reporticon emailicon; Your company is in the business of not helping people. The agents are pawns. The branch offices are not going to help anyone. Remember, they are too busy operating their telemarketing sweat shop. You know, setting up those Medicare info appointments, that info about the 'changes in Medicare',doing those little 'how to get in the door' training sessions, the ones that are much more important than product training and suitability. If you are concerned about being 'lumped' in with the rest of your disreputable company, why don't you pick what's left of your morals and pride, and take your well meaning good service to a company with a better rating than D by Weiss ratings. How's that agent puppymill goin over there in your branch?
We understand how difficult it is to leave. Those chargebacks will be coming. Plan well. You deserve better than Bankers Life and you know it. The only thing that makes you a 'bad' person is knowing the truth and not doing anything about it. So do something.

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ConcernedSon says:

Bravo CBS for bringing light to the egregious business practices of this company that so many paid in good faith with the assurance of care in their twilight years. Every single point recounted by this poor family is in line with what my family has been subjected to. This Christmas was in fact a very dire one as Bankers Life is tens of thousands in arrears in payments they have never denied. My parents are both in need of 24/7 care, their conditions were accepted by Bankers Life and they have made a few payments when we have managed to pay a lawyer to call and hound and threaten them. Otherwise, the story is the same dozens of hours we allocate weekly just to calling, faxing, mailing, all to get word that they have not received, or have lost or need more information. We mail with return receipt and signature to then be told nothing was received. All the while the savings of my father (a decorated WWII veteran who escorted President Roosevelt to Yalta) and mother (a lifelong teacher) are gone, they live on a low fixed income. This as my sister and her husband who has Parkinson's are mortgaging their home. I have paid the past few payments by transferring all my wages, I don't even know how I will pay my mortgage! Shame on Bankers Life and those who work there, a company that can spend $40 million sponsoring the "Fieldhouse" ballpark in Indianapolis. You have no idea what pain and suffering your company is inflicting upon families as ours, veterans and America's greatest generation final years are cheapened and destroyed by your insolence and refusal to live up to your commitments.


Butch3333 replies:: linkicon reporticon emailicon; Want to see how Bankers trains their agents? Google Bankers/Inside Edition.

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USVision says:: Sharyl and The Early Show, you guys have done an excellent job to expose only the tip of the preverbial iceburg with the company known as Bankers Life and Casualty, a subsidy of the previously bankrupt Conseco, who changed their name to CNO Financial Group. As a former agent/supervisor- we were repremanded for helping on claims. We ex-agents have done our best to inform the public on scam.com about all the fines, complaints, horror stories- example- customer service refusing to assist until they speak to the 'deceased' for permission. Sadly their motto (now changed) 'We specialize in seniors', really means we specialize in 'doing' seniors. This company is a blight in the industry. Thank you for your story, and know that the paperwork wasn't ever lost. There's a much bigger story in play.

The 6 year agent who just posted knows, that if you contact a local branch, an agent will run out to sell you another policy. Apparently he can defend his company in spite of all the evidence around him, even in his own branch office.
Doesn't he make you want to do business with him and his company? Get your Mom a policy?....right.
The damage control internal memo went out to the branch offices. Hopefully there will be a lot of free looked policies sent back. They are all being told what to say, ie., how to handle it. It was just one incident, bla, bla,...we do this, we do that.
Excuse me, but with 5.46% of market share and 1/3 of LTC complaints, it is a standard of denial.
They paid another 10 million in fines after the Market Conduct Study, for not doing what they were told to do. So the defenders and explainers of the policy 'language' as related to activities of daily living, should be able to know a 94 year old man who qualified for recieving benefits, should not have been cut off from them when someone decided to call him. All elderly people say they are "fine" when someone calls them and ask.

How those agents can defend this company, is only because of the koolaide induced, cult like, mindset that they have to maintain, to remain a captive agent, in a D rated company by Weiss ratings.; reply

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PeregrineCare says:

It's very important to know that you qualify before you file a claim for long term care insurance. If you and your doctor agree that you need assistance with at least two of the six vital ADLs (activities of daily living), i.e. eating, bathing, dressing, transferring, toileting, and maintaining continence, then you are likely qualified. If the insurance company does not agree, use your doctor as an advocate. And, if the company is still resistant, go to your state insurance commissioner. We've found the California Dept of Insurance extremely helpful in fighting rejected claims. The bottom line is, however, you must qualify. Simply claiming that you are a fall risk is not enough to get you benefits.


pwpend replies:: linkicon reporticon emailicon; I agree.

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mun4u2c says:

I have been an agent at Bankers for 6 years and I currently have 9 clients on claim. The policies I have sold and serviced over the years have saved people hundrends of thousands of dollars. I would reccomend if you are having trouble getting a claim paid, contact the local branch that the policy was purchased from. The assistance of an agent will help drastically and as long as the claim is legitimate, which means the family member meets the criteria for the claims to be paid (Needing assistance with 2/6 activities of daily living=eating, bathing,dressing,toilenting,trasnferring & continence or has a coginitive impairment diagnosed by a DR.) the claim will be paid.
As an insurance company, we are for profit. We are not a not for protit organization, we are here to make money. At the same time, we sell products that DO protect people when the claim criteria is met.
As far as customer service goes, all companies are only as good as your agent is. Use them to help with the claims process and they can help set you up with a patient care coordinator which will help with the claims. Or even better, use an agency that handeling the billing. They know what needs to be done to get a claim paid and realalistically, they should be taking care of all claims if they want to be paid.


rorayner replies:: linkicon reporticon emailicon; no disrespect but you're living in la la land. We did contact the local branch and were told the agent that my father bought the policy from 20 years ago is not there anymore...i'm assuming he's dead, and so will my mother be if we can't afford the care she needs. We've met the "criteria" since october of 2012...no money to day...we need help and we need it NOW. If your so happy and in so tight with Bankers, maybe you can help us. I'll be awaiting your reply.