Thursday, April 17, 2014
YOLO COUNTY NEWS
99 CENTS

A cautionary tale on insurance

TomEliasW

By
From page A6 | July 23, 2013 | Leave Comment

Back in 1996, Monterey resident Janice O’Brien, then 75, began paying almost $5,000 per year for long-term care insurance. Her idea was that should she ever need them, per-diem payments from the Continental Casualty Co. policy would prevent her from ever becoming a burden to her seven children.

It hasn’t exactly worked out that way for O’Brien, a past president of the League of Women Voters of the Monterey Peninsula, one of whose sons, Pete, played first base for the Texas Rangers, Seattle Mariners and Cleveland Indians for 11 seasons.

Her case and the lawsuit her family filed over it serve as a cautionary tale for policy buyers, but a large judgment or settlement might also be a warning to recalcitrant insurance companies.

Now almost 92, O’Brien began sensing signs of dementia in 2011 and she, her children and doctors determined she should no longer live alone. She also had frequent dizziness, interfering with her mobility, and needed help doling out her medications, getting to the toilet and bathing. All of those are among the criteria for payouts from long-term care insurance policies.

So she and her family brought in home care providers, expecting Continental Casualty, usually called CNA, to pay the daily rate called for in her policy. The family made sure her premium payments were always up to date.

The lawsuit says CNA refused to cover more than 49 hours per week, saying the round-the-clock care O’Brien got was not medically necessary, even though every doctor consulted said it was. No one in the family was wealthy enough to keep paying caregivers $20 to $24 per hour for all but 49 hours per week.

Eventually, the family gave up on CNA paying much and daughter Tarin, in her 60s, sold her travel agency in Washington state to move in with her mom as a full-time caregiver. Still, CNA refused to pay up.

Nationally, state insurance commissioners receive more than 5,000 complaints yearly of payment refusals by long-term care insurance companies. Most don’t become high-profile lawsuits, but the O’Briens found their way to a Claremont-based law firm headed by William Shernoff, who has won hundreds of millions of dollars from insurance companies refusing to pay on policies.

Their suit, filed by Shernoff partner Samuel Bruchey, calls CNA’s claims process “abusive” and says it victimizes “society’s most vulnerable. … CNA deliberately places demands on policyholders that … could only be (intended) to cook up grounds to deny claims.”

A CNA spokeswoman said the company won’t discuss pending litigation, but Bruchey said after the suit was filed, the company offered to compensate the O’Briens for everything they have spent on home care this year. A mediation conference in the case was set for Friday in San Diego, with Bruchey saying his clients won’t be satisfied with mere compensation for what they’ve spent this year.

Even before she gave up her business, daughter Tavin said, she and her siblings were taking care of their mom in relays, each staying with her 30 days at a time. The family wants compensation for what it’s gone through, along with punitive damages to deter similar practices.

California law requires that long-term care policies list seven conditions, any two of which can trigger payouts. But the lawsuit charges that O’Brien’s policy, sold after that law took effect, only included five, making it tougher to qualify for payouts.

“It was never the intent of the drafters of the law to demand impairment so great that people would be forced into nursing homes before they could get payment,” said Bonnie Burns, a Scotts Valley-based insurance consultant who helped write the law. “Long-term care benefits are not intended just for people with impairment so great they need 24-hour care.”

One 2008 report indicated that about 25 percent of all long-term care claims go unpaid because insurance companies insist policy holders be so impaired that almost no one can qualify. The O’Briens want their lawsuit to at least limit that alleged practice.

The bottom line for insurance buyers barraged by television commercials and direct mail ads pushing long-term care insurance: Make sure any policy you buy contains all seven conditions California requires and says only two must be met in order to trigger payouts.

It’s a classic “caveat emptor”-buyer beware situation that has already left many thousands of policyholders frustrated and living less well than they expected in their later years.

— Reach syndicated columnist Tom Elias at tdelias@aol.com

LEAVE A COMMENT

Discussion | No comments

The Davis Enterprise does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

News

Benefit set for local bike legend

By Adrian Glass-Moore | From Page: A1

 
Jury deliberates murder, elder-abuse charges

By Lauren Keene | From Page: A1

 
Davis wins USA Today Best Cycling Town honor

By Dave Ryan | From Page: A1

 
Three killed in attack on Ukrainian base

By The Associated Press | From Page: A2 | Gallery

State’s health care sign-ups beat projections

By The Associated Press | From Page: A2, 1 Comment

 
For the record

By Enterprise staff | From Page: A2

 
California residents divided on drought solution

By San Francisco Chronicle | From Page: A2

For the record

By Dave Ryan | From Page: A2

 
Scholar will discuss human trafficking in Friday talk

By Enterprise staff | From Page: A3

Downtown post office set to reopen

By Thomas Oide | From Page: B3

 
Run or walk to prevent child abuse in Yolo County

By Enterprise staff | From Page: B3 | Gallery

Nominations sought for charity paint giveaway

By Enterprise staff | From Page: B3

 
Learn more about Google Glass at talk

By Enterprise staff | From Page: A4

 
Per Capita Davis: Now, for some good news

By John Mott-Smith | From Page: A4

Birch Lane hosts 50th anniversary party

By Enterprise staff | From Page: A4

 
Hannah Stein reads poetry at gallery

By Enterprise staff | From Page: A4

Davis Food Co-op to offer free bags on Earth Day

By Enterprise staff | From Page: A4

 
Get in the picture with school board candidate

By Special to The Enterprise | From Page: A4

KDVS hosts on-air fundraiser April 21-27

By Enterprise staff | From Page: A4

 
Tickets on sale for Pence Garden Tour

By Enterprise staff | From Page: A4

Fundraiser planned for Allen’s campaign

By Enterprise staff | From Page: A4

 
Food Co-op board plans open house

By Enterprise staff | From Page: A4

Davis Downtown hosts candidate forum

By Dave Ryan | From Page: A4

 
Barbecue celebrates winter shelter program

By Special to The Enterprise | From Page: A5

Sign of things to come

By Fred Gladdis | From Page: A8

 
Davis Soroptimists celebrate 60 years

By Special to The Enterprise | From Page: A8

.

Forum

Fancy meeting you here …

By Special to The Enterprise | From Page: B5

 
A great community effort

By Letters to the Editor | From Page: A6, 1 Comment

Public Health Heroes honored

By Letters to the Editor | From Page: A6

 
Tom Meyer cartoon

By Debbie Davis | From Page: A6

Don’t miss a Trokanski dance

By Letters to the Editor | From Page: A6

 
Frank Bruni: The oldest hatred, forever young

By New York Times News Service | From Page: A6, 1 Comment

Expert: Free parking is a myth

By Special to The Enterprise | From Page: A6, 1 Comment

 
Have they really learned?

By Letters to the Editor | From Page: A6

.

Sports

Foster steps down as Lady Blue Devil basketball coach

By Bruce Gallaudet | From Page: B1 | Gallery

 
River Cats’ streak reaches six wins

By Enterprise staff | From Page: B1

Landry evolves into UCD women’s lacrosse leader

By Bruce Gallaudet | From Page: B1 | Gallery

 
Huge inning propels Pleasant Grove past DHS

By Enterprise staff | From Page: B1

Giants edge Dodgers

By The Associated Press | From Page: B1 | Gallery

 
Youth roundup: Martinez, Chan come up big at gymnastics regional

By Enterprise staff | From Page: B2 | Gallery

Kings drop season finale to Suns

By The Associated Press | From Page: B2

 
Angels get past A’s in extras

By The Associated Press | From Page: B8 | Gallery

.

Features

.

Arts

Wineaux: Good deals off the beaten path

By Susan Leonardi | From Page: A7

 
Rockabilly phenom to play at The Palms

By Enterprise staff | From Page: A7

HellaCappella showcases a cappella singing

By Enterprise staff | From Page: A7

 
‘One’ singular sensation to open at DMTC

By Enterprise staff | From Page: A7

25th annual state clay competition exhibit at The Artery

By Enterprise staff | From Page: A7

 
.

Business

.

Obituaries

Tapan Munroe

By Special to The Enterprise | From Page: A4

 
.

Comics

Comics: Thursday, April 17, 2014

By Creator | From Page: B6