Long-Term Care Insurer Gets Sued for Excluding Assisted Living Claims

| January 2, 2014

A major Chicago-based long-term care insurer is being sued by an elderly group policyholder who says the company “abruptly” changed its policy and began denying her claims for assisted living care, according to Courthouse News Service.

The company, CNA, provides group long-term care insurance and initially sought to hike premiums for a certain group of seniors by 45% in Connecticut, where lead plaintiff Marie Gardner, age 91, lives. The state ultimately approved a 30% premium increase for Gardner’s group.

“Defendants have engaged in an illegal course of conduct designed to reduce its exposure to costly long-term care claims by denying claims of elderly insureds through a scheme of fraud, deception, and manipulation of policy terms, while seeking massive premium increases at the expense of these same insureds,” Gardner says in a federal class action suit she’s bringing against CNA, Courthouse News reports.

Gardner claims her policy originally covered a range of assisted living communities but was changed by CNA to cover nursing home care, only. The plaintiff says she broke her hip in 2008—after paying into her insurance policy for 15 years—and subsequently moved into an assisted living community. CNA approved her claim and began paying out the monthly benefit, Courthouse News says.

The payment benefits ended in February 2011 when Gardner was considered to have recovered. About one year later in April 2012, she fell and fractured her sacrum. However, CNA told her that in order to qualify for long-term care insurance benefits, the assisted living community where she lived would have to be staffed 24/7 by an on-premise nurse.

That requirement differs from a settlement in a previous class action settlement against CNA requiring a nurse to be on call 24 hours a day, and a nurse to be on site for more than five hours a day, seven days a week.

“(A)t the time the CNA reached an alleged ‘agreement’ with the Connecticut Insurance Department, CNA did not disclose to the Insurance Department that it had previously been covering stays at assisted living facilities under this same policy,” the lawsuit says, reports Courthouse News.

Because CNA is now denying new claims for assisted living community care despite a previous claim having been paid out at an assisted living community, Gardner claims the insurer used the remediation process in the previous class action as a way to invent new ways to avoid claim liability.

Gardner is seeking class certification for her lawsuit, along with an injunction preventing CNA from excluding claims for Connecticut assisted living community stays. Additionally, she is seeking monetary damages for class members who have been denied stays based on the assisted living community definition or staffing levels. The class would include around 383 people in Connecticut and at least 20,000 nationwide, according to Gardner’s estimates.

Read more at Courthouse News.

Written by Alyssa Gerace


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Category: Assisted Living, Long Term Care, Senior Care, Senior Housing, Senior Living

Comments (2)

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  1. Dave Wiltsee says:

    Long-term care insurance, as currently structured, is unsustainable. Both the financial underpinnings and the treatment of individual policy holders spell doom for the industry. It is time for America to take a comprehensive look at long term care, and simultaneously to develop appropriate financial tools built on individual responsibility, humanitarian priinciples, and mutual trust.

  2. Stephen D. Forman says:

    Not enough information in the article to make much of a determination… will have to wait and see. So far I see nothing out of the ordinary here. It's rare but not exceptional for carriers to amend policies, ie by requiring 24hr nurse presence to protect policyholders).