Lawsuit filed over denial of senior's home care

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A lawsuit contends that a Carmel-based health insurer ran a scheme to avoid paying in-home care claims for potentially thousands of California's elderly.

Senior Health Insurance Company of Pennsylvania, or SHIP, had a claims process "designed to frustrate and confuse policyholders with needless demands for irrelevant information" in violation of its own policies and California law, according to the suit filed Tuesday in San Bernardino County Superior Court by the group Consumer Watchdog.

"They're preying on the elderly," group founder Harvey Rosenfield said Wednesday.

A call to the company seeking comment was not immediately returned.

The not-for-profit insurer is run by a trust created by the Pennsylvania Insurance Department. It was previously known as Conseco Senior Health Insurance Company and it services long-term policies originally sold by Conseco, American Travelers Life, Transport Life, United General Life, and Continental Life.

Senior Health Insurance operated as Conseco Senior Health Insurance until late 2008, but Conseco (now CNO Financial Group) transferred the unit to an independent trust based in Pennsylvania when it abandoned the long-term care insurance market due to heavy losses. Conseco took a $1.2 billion charge to unload the unit.

It has about 10,000 California policyholders, Rosenfield said.

The average age of its policyholders in 2009 was 80, according to the California Department of Insurance. That year, the company agreed to pay $500,000 to settle claims by state regulators that it had improperly denied claims on long-term care policies and that its claims-handling practices were confusing and onerous. The company agreed to repay claims dating back to 2004.

The new lawsuit makes similar allegations. It alleges that SHIP tried to avoid reimbursing policyholders for long-term care by ignoring or taking an unreasonably long time to respond to claims; requiring unnecessary paperwork and medical examinations, and requiring that the caregivers have licenses in violation of company policy and California law.

The suit, which seeks class-action status, was filed on behalf of Dr. William Hall, 78, of Upland. Hall, a retired chief of medicine at a California hospital, bought a long-term care policy in 1994 and submitted claims in 2010. SHIP refused to reimburse all but 20 percent of his expenses.

"He immediately ran into a brick wall" and was forced to pay tens of thousands of dollars for his home care, which depleted his savings, Rosenfield said.

"My Dad bought this policy to spare his children some of the time and expenses that many of our parents require when they get older, but SHIP has only drained my family's resources," his son, Eric Hall, said in a statement. "Because of SHIP, my family has spent more time and expense on his care than if he had never bought the policy in the first place. It has been an uphill battle."


  • The Board of Trustees
    Check out the Board of Trustees for "SHIP"

    John J. Morrison, former State Auditor and Commissioner of Insurance for the State of Montana

    Julianna M. Bowler, former Commissioner of the Massachusetts Division of Insurance

    Cecil D. Bykerk, FSA, MAAA, FCA, Retired Chief Actuary, Mutual of Omaha

    Tom Hampton, former Commissioner of Insurance for the District of Columbia
    George V. Serio, Esq., former Superintendent of Insurance for the State of New York
    The following comment was copied from the Insurance & Financial Advisor website:
    Mark Wolff Says:
    April 11th, 2011 at 3:25 pm
    SHIP has been impossible to deal with in the last few months.
    They are preying on my 91 year old mother denying her one claim after another for no reasons, other that thier own ineffeciencies and misinformation.
    The consistently get the wrong information on my mother to deny her claims, then once it is pointed out that thie information is wrong they come up with another reason to deny her claims.
    Their business practices are poor. You cannot contact anyone via email.
    You cannot contact anyone via phone at thier respective extension.
    They have not merged thier systems in over 3 years and information that should be readily aavailbale to thier customer service people is not. The level of exasperation from their personnel is very high. It seems they know that they are under orders to DENY, DENY and DENY some more.
    Thier CEO , Greg Serio, is unresponsive. I guess the windows in his office have changed from rose colored to smoke. It matches the mirrors that the company uses to portray themselves as efficent and caring when in my opinion they are anything but.
    My long term care is in the hands of a 5A1 company not a company like SHIP.
    God help the people who put thier trust in the management people of SHIP

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