Search Articles

Find Attorneys

Long-Term Care Insurer Refuses to Deliver on 10-year-old Policy

  • June 21st, 2004

A California case about to go to trial will test what constitutes lying about one's health on an application for long-term care insurance. The outcome could have implications for many who buy policies and later suffer from diseases that cause cognitive impairment.

When Harold Carrington bought long-term care insurance in 1995, he expected it to be there when he needed it.

Now at age 76, he needs it. Carrington suffers from Alzheimer's disease and spends his days in a nursing home that costs about $4,000 a month. All told, the cost of his care has topped more than $200,000.

But although Carrington has paid more than $20,000 in premiums, his long-term care insurance company refuses to pay a dime.

In court documents, the insurer, John Hancock Insurance Co., says it denied the claim because Carrington committed fraud on his original application 10 years ago by failing to disclose important medical information. Carrington's 74-year-old brother and legal guardian, Ray, is fighting the company, and the case is to go to trial in the fall.

Meanwhile, Carrington is completely unaware of the legal battle surrounding him. According to the San Francisco Chronicle, which has written about Harold Carrington's unfortunate case, the "case serves as a cautionary tale showing that when consumers are purchasing coverage for peace of mind, things can go terribly wrong."

What went wrong in this case is open to debate and in part lost in the ebbing sands of Carrington's memory. Carrington met with a long-term care insurance agent in October 1994. While he did not purchase the policy then, he filled out an application that included his medical background. The application didn't mention memory loss.

Carrington, who was then 65, visited his doctor one month later and mentioned then that he'd been experiencing some memory loss. According to court documents, the doctor noted suspicions of early signs of dementia or possible Alzheimer's in Carrington's medical records, but made no mention of that to Carrington.

Carrington purchased the long-term care policy in April 1995. He wasn't diagnosed with Alzheimer's until 1998.

In court documents, John Hancock claims it was deceived by Carrington and that he was obliged to report symptoms of memory loss before he signed the policy. Carrington's attorney says it's up to the insurer to conduct a medical evaluation as well as to review the applicant's medical records, as allowed by law. In this case, the attorney says the company failed to review the records until Carrington's brother initiated a claim in 2000. He adds that Carrington may not have viewed the memory loss he experienced in 1994 as particularly significant.

Consumer health advocates following the case are particularly interested in the implications for other cognitive disorders, such as other forms of dementia and Parkinson's disease.

"People could be in the early stages of one of these disorders, and they wouldn't necessarily know it," said Bonnie Burns, policy specialist for California Health Advocates, an association of advocacy and counseling programs for Medicare beneficiaries.

Hancock has offered to return Carrington's $20,000 in premiums, but his brother won't drop the lawsuit. Although as it turns out Carrington, who was an exceedingly frugal man, has more than enough money to cover his nursing home expenses, his brother says it's the principle of the thing.

"The fight is 'How dare they!' " he said of the insurer's refusal to pay and the company's accusation that his brother lied.

To read the entire article in the San Francisco Chronicle, click on: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/06/13/BUGL574S4G1.DTL

Local Elder Law Attorneys in Your City

Elder Law Attorney

Firm Name
City, State

Elder Law Attorney

Firm Name
City, State

Elder Law Attorney

Firm Name
City, State


Last Modified: 06/21/2004
Learn the secrets of estate planning from an expert
ADVERTISEMENT
Medicaid 101
What Medicaid Covers

In addition to nursing home care, Medicaid may cover home care and some care in an assisted living facility. Coverage in your state may depend on waivers of federal rules.

READ MORE
How to Qualify for Medicaid

To be eligible for Medicaid long-term care, recipients must have limited incomes and no more than $2,000 (in most states). Special rules apply for the home and other assets.

READ MORE
Medicaid’s Protections for Spouses

Spouses of Medicaid nursing home residents have special protections to keep them from becoming impoverished.

READ MORE
What Medicaid Covers

In addition to nursing home care, Medicaid may cover home care and some care in an assisted living facility. Coverage in your state may depend on waivers of federal rules.

READ MORE
How to Qualify for Medicaid

To be eligible for Medicaid long-term care, recipients must have limited incomes and no more than $2,000 (in most states). Special rules apply for the home and other assets.

READ MORE
Medicaid’s Protections for Spouses

Spouses of Medicaid nursing home residents have special protections to keep them from becoming impoverished.

READ MORE
Medicaid Planning Strategies

Careful planning for potentially devastating long-term care costs can help protect your estate, whether for your spouse or for your children.

READ MORE
Estate Recovery: Can Medicaid Take My House After I’m Gone?

If steps aren't taken to protect the Medicaid recipient's house from the state’s attempts to recover benefits paid, the house may need to be sold.

READ MORE
Help Qualifying and Paying for Medicaid, Or Avoiding Nursing Home Care

There are ways to handle excess income or assets and still qualify for Medicaid long-term care, and programs that deliver care at home rather than in a nursing home.

READ MORE
Are Adult Children Responsible for Their Parents’ Care?

Most states have laws on the books making adult children responsible if their parents can't afford to take care of themselves.

READ MORE
Applying for Medicaid

Applying for Medicaid is a highly technical and complex process, and bad advice can actually make it more difficult to qualify for benefits.

READ MORE
Alternatives to Medicaid

Medicare's coverage of nursing home care is quite limited. For those who can afford it and who can qualify for coverage, long-term care insurance is the best alternative to Medicaid.

READ MORE
ElderLaw 101
Estate Planning

Distinguish the key concepts in estate planning, including the will, the trust, probate, the power of attorney, and how to avoid estate taxes.

READ MORE
Grandchildren

Learn about grandparents’ visitation rights and how to avoid tax and public benefit issues when making gifts to grandchildren.

READ MORE
Guardianship/Conservatorship

Understand when and how a court appoints a guardian or conservator for an adult who becomes incapacitated, and how to avoid guardianship.

READ MORE
Health Care Decisions

We need to plan for the possibility that we will become unable to make our own medical decisions. This may take the form of a health care proxy, a medical directive, a living will, or a combination of these.

READ MORE
Estate Planning

Distinguish the key concepts in estate planning, including the will, the trust, probate, the power of attorney, and how to avoid estate taxes.

READ MORE
Grandchildren

Learn about grandparents’ visitation rights and how to avoid tax and public benefit issues when making gifts to grandchildren.

READ MORE
Guardianship/Conservatorship

Understand when and how a court appoints a guardian or conservator for an adult who becomes incapacitated, and how to avoid guardianship.

READ MORE
Health Care Decisions

We need to plan for the possibility that we will become unable to make our own medical decisions. This may take the form of a health care proxy, a medical directive, a living will, or a combination of these.

READ MORE
Long-Term Care Insurance

Understand the ins and outs of insurance to cover the high cost of nursing home care, including when to buy it, how much to buy, and which spouse should get the coverage.

READ MORE
Medicare

Learn who qualifies for Medicare, what the program covers, all about Medicare Advantage, and how to supplement Medicare’s coverage.

READ MORE
Retirement Planning

We explain the five phases of retirement planning, the difference between a 401(k) and an IRA, types of investments, asset diversification, the required minimum distribution rules, and more.

READ MORE
Senior Living

Find out how to choose a nursing home or assisted living facility, when to fight a discharge, the rights of nursing home residents, all about reverse mortgages, and more.

READ MORE
Social Security

Get a solid grounding in Social Security, including who is eligible, how to apply, spousal benefits, the taxation of benefits, how work affects payments, and SSDI and SSI.

READ MORE
Special Needs Planning

Learn how a special needs trust can preserve assets for a person with disabilities without jeopardizing Medicaid and SSI, and how to plan for when caregivers are gone.

READ MORE
Veterans Benefits

Explore benefits for older veterans, including the VA’s disability pension benefit, aid and attendance, and long-term care coverage for veterans and surviving spouses.

READ MORE