Long-Term Care Insurance: Yes or No?

Yet Another Reason to Reconsider Long-Term Care Insurance: A Class Action Lawsuit

In the class-action lawsuit you referenced in your question, Gardner v. Continental Casualty Company (CNA), the insurer was being sued for acting in bad faith by changing its policy interpretation regarding coverage for assisted-living facilities without alerting policyholders.

The suit alleged the insurer acted illegally when it denied the claims of seniors who were insured by them, using “a scheme of fraud, deception and manipulation of policy terms” all while pursuing massive premium increases.

According to the complaint, Marie L. Gardner, 91, paid premiums on her long-term-care policy for 15 years before breaking her hip in 2008 and moving to an assisted-living facility.  She received benefits until February 2011 when CNA determined that her condition had improved.  After she fell down a flight of stairs at the facility a year later and fractured her sacrum, CNA denied her claim for benefits.

And, Gardner was not the only one. A class action suit of at least 20,000 CNA policyholders nationwide was brought to court, on behalf of the policyholders who claimed they were unfairly denied coverage. The lawsuit asked for class certification and an injunction to prevent the insurer from excluding claims for stays in Connecticut assisted living facilities, and the court ruled in favor of the plaintiffs. For the full text of this decision, go to: https://ecf.ctd.uscourts.gov/cgi-bin/show_public_doc?2013cv1918-168

Other Options to Pay for Long-Term Care

If you have done your research and decide long-term care insurance is still the right choice for you and your family, you should incorporate it as part of your long-term care plan, not as the only form of planning for long-term care.  Keep in mind that there are dozens of long-term care asset protection strategies other than long-term care insurance.

-Medicaid Planning can be started while you are still able to make legal and financial decisions, or can be initiated by an adult child acting as agent under a properly-drafted Power of Attorney, even if you are already in a nursing home or receiving other long-term care assistance.  In fact, the majority of our Life Care Planning and Medicaid Asset Protection clients come to us when nursing home care is already in place or is imminent.

-If you are still healthy and not yet on the “long-term care continuum,” then instead of Life Care Planning and Medicaid Asset Protection Planning you should consider our Living Trust Plus™ Asset Protection Trust, which is a simpler and less expensive method of asset protection for clients who will most likely not need any long-term care for at least five years. For most Americans, the Living Trust Plus™ is the preferable form of asset protection trust because, for purposes of Medicaid eligibility, this type of trust is the only type of self-settled asset protection trust that allows a settlor to retain an interest in the trust while also protecting the assets from being counted by state Medicaid agencies.

As always, if you have not done Long-Term Care Planning, Estate Planning or Incapacity Planning (or had your Planning documents reviewed in the past several years), please call us to make an appointment for a no-cost initial consultation:

Fairfax Elder Law: 703-691-1888
Fredericksburg Elder Law: 540-479-1435
Rockville Elder Law: 301-519-8041
DC Elder Law: 202-587-2797

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