Long-Term Care Insurance Lawsuit Investigation
Last Updated on April 18, 2019
Attorneys working with ClassAction.org are no longer investigating this matter. The information here is for reference only. A list of open investigations and lawsuits can be viewed here.
At A Glance
- This Alert Affects:
- Anyone who had a loved one in a continuing-care retirement community and had to transfer him or her to assisted living or skilled nursing care.
- Why Was This Alert Posted?
- Attorneys working with ClassAction.org were investigating whether certain insurance companies are improperly reimbursing these residents.
- What Companies Were Under Investigation?
- All major long-term care insurance carriers including Genworth, John Hancock, MetLife, Conseco, UNUM, Aegon, Prudential, Northwestern Mutual, Ameriprise and New York Life.
If you placed a loved one in a continuing-care retirement community and had to transfer him or her to assisted living, skilled nursing or other type of dependent care, it’s possible that you may have paid more than you should have.
What’s Going On?
Attorneys working with ClassAction.org believed at one point a class action lawsuit can be filed on behalf of members of continuing-care retirement communities. They had reason to believe that some long-term insurance carriers are illegally refusing to pay out full policy benefits when residents have to move into assisted living or skilled nursing care. One company, John Hancock, had already been sued over this issue. Unfortunately, attorneys working with ClassAction.org are no longer investigating this matter.
What Companies Were Under Investigation?
Attorneys were previously interested in speaking with people who have a loved one in a continuing-care community and have long-term care insurance through any major provider, including, but not limited to, the following:
- John Hancock
- Northwestern Mutual
- New York Life
What Started the Investigation?
In late 2015, John Hancock Life Insurance Company was sued for allegedly cheating certain policyholders out of full reimbursement for assisted living and skilled nursing care. The case pertained specifically to residents who first entered into a continuing-care retirement community and eventually needed to be transferred to dependent care.
According to the suit, these residents had pre-paid – sometimes for years – for potential future dependent care. The suit claimed, however, that when they actually entered dependent care from an independent living community, they were only being partially reimbursed for the increased cost.
For instance, assume an individual purchases a policy with John Hancock and eventually moves into a continuing-care retirement community. He pays a $4000 monthly fee that “pre-pays” for future assisted living or skilled nursing care, should it ever become necessary.
Several years later, the man falls and breaks his hip and requires round-the-clock care in assisted living. The cost of the facility’s services per month is $8000, but the man is only reimbursed for the $4000 pre-payment he made prior to his transfer.
The lawsuit alleged that this practice is illegal due to breach of contract and bad faith issues and that patients who have to be transferred into dependent care from independent living are getting ripped off. In fact, according to the lawsuit against John Hancock, the insurance company admitted that if policyholders had entered directly into dependent care, they would have received full reimbursement for the additional services.
How a Lawsuit Can Help
Lawsuits may be able to help continuing-care residents receive compensation for the dependent care we suspect they were not properly reimbursed for. Taking legal action may also help ensure these insurance companies are prohibited from continuing such practices in the future.
What You Can Do
If your loved one is in an assisted living or skilled nursing facility after being a resident of an independent living community, contact an attorney in your area for more information. It’s possible that your insurance carrier didn’t properly reimburse you for his or her dependent care.
The attorney can review the copy of your long-term care policy, your contract with the care facility and the bills you received after your loved one was transferred into dependent care. It usually costs nothing to speak with an attorney and you’re not obligated to take legal action simply because you spoke to someone about your rights.
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