When discussing estate planning with our clients, we always explain the need to prepare for the possibility of requiring long-term care, and the daunting costs of such care. As Americans are living longer, more and more of us are spending a significant portion of our later life in a long-term care facility. These facilities are not all created equal, and there is a progression of the level of care provided at each type, from very little assistance in a senior citizen independent living or retirement community, to increased assistance at an assisted living facility, to 24-hour skilled nursing care at a nursing home. The cost of each facility only increases as the level of care provided increases. Often, our clients think that they are prepared for the expense of long-term care if they have purchased a long-term care insurance policy. In our experience, however, there can be problems with filing a successful claim for benefits under such a policy. A recent case in the District Court for the District of Connecticut illustrates a common problem where the insurer denies payment because the facility in question does not meet its policy definition of a covered long-term care facility.
The recent decision in Gardner et al. v. Continental Casualty Company (U.S. Dist. Ct., D. Conn., No. 3:13CV1918 (JBA), March 1, 2016), holds that Continental Casualty Company’s across-the-board policy of denying claims for benefits for assisted living facility stays raised sufficient issues of numerous plaintiffs and common harm that a class action was justified. According to the decision, Continental Casualty Company instituted a policy in or around 2012 that claimants who resided in assisted living facilities were not covered under the precise terms of the insurance contracts at issue, and that all such claims would be denied, even if a similar temporary stay for a policyholder had previously been approved. Continental’s policy centered in part upon a strict reading of the contract language concerning licensing of such facilities with the State of Connecticut and the definition of skilled nursing care. No notice was provided to policyholders about this change in the rules for coverage, and no individual inquiry was made as to the actual assistance each facility was providing each claimant with his or her activities of daily living.
Certification of a class for the purposes of consolidating claims against Continental Casualty Company is a very early step in this litigation. Regardless of the eventual outcome of this case, however, it is clear that relying upon a long-term care insurance policy to cover you if you need long-term care services, but can safely be provided for without being admitted to a nursing home, is a risky proposition. In fact, one plaintiff in the Gardner case was forced to move from an assisted living facility - which offered more independence to its residents – to a nursing home facility solely to be able to defray the costs of care by using the long-term care policy benefits. Unfortunately, this caused her to max out her policy benefits much more quickly, since the cost of the nursing home was so much higher than the assisted living facility. A policy of denying coverage for intermediate care may also cause policyholders to spend down their own assets that much faster, if the policy benefit that they have purchased does not cover 100% of the nursing home bill they have now incurred.
In short, it is important to always read and understand the “fine print” in any insurance document. It is also crucial to have an estate plan that takes into account other funding options for long-term care services and does not rely solely on private insurance. At Weatherby & Associates, PC, we work hard to ensure that each client has an effective, custom-tailored plan in place to protect his or her quality of life for as long as possible. If you have any questions about long-term care planning, please contact us at (860) 769-6938.
Long Term Care Attorneys in CT