Last week, the New York Times ran an extremely troubling story about Long Term Care Insurance. Apparently, some Long Term Care Insurance companies are using bureacratic tactics to delay payment of claims until the insured dies, or is outright denying them.

In depositions conducted on behalf of angry policyholders, Conseco employees described bureaucratic obstacles that prevented payment of claims. Those depositions were sealed in settlement agreements but were obtained by The Times.

In a 2006 deposition, a Bankers Life and Conseco claims adjuster, Teresa Carbonel, testified that she denied claims because of missing records but was prohibited from calling nursing homes or physicians to request the documents. She also testified that when a claim was denied, she was forbidden to phone a policyholder, but instead used a time-consuming mailing system.

Ms. Carbonel’s testimony, recorded during lawsuit on behalf of a 94-year-old policyholder, Rhodes K. Scherer, also disclosed that if policyholders did not mail requested documents within 21 days, Conseco might abandon their claim, sometimes without informing them.

In the case of Mr. Scherer, who was institutionalized after a bathroom fall, it was difficult to obtain a response, Ms. Carbonel said, because the company’s requests were mailed to his home address, rather than the nursing center where the company had been notified that he had moved. Ms. Carbonel, who is no longer with the company, did not return calls. Conseco declined to comment on her testimony.

Long term care insurance is supposed to help alleviate pressure on Medicaid. Yet, if some companies persist in the kind of conduct described in the article, that certainly won’t happen.

And–what does this mean for providers accepting admissions of people with insurance from these companies?

(HT Wesley J. Smith)