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Today’s Boston Globe, carried an article exposing a growing problem as predictable as it is disgraceful – long term care insurers refusing to pay for long term care when it is finally needed. With people living longer, and many in the baby boomer generation acknowledging that they could one day require nursing home or other long-term care, long term care insurance is a booming business. Insurance companies have been aggressive in their marketing campaigns. The prospect of receiving premiums for what may be decades before any payout may be required, has proven a powerful incentive for many insurance companies to enter into the long-term market.

The down-side for insurers is that long term care is enormously expensive. Apparently too many insurance companies have figured a way to avoid meeting their obligations – they deny valid claims. If the elderly individual in need of long-term care is too frail to fight, or lacks family to fight for them, the insurer may avoid its payment obligation with no penalty. If they delay for long enough, the insured may die, leaving his estate with nothing but a lawsuit. It is too soon to know yet how pervasive the problem of nonpayment of valid long term care claims has become. Charles Duhigg, author of the Globe article, reported that in California, in 2005, nearly 25% of long term care claims were denied by the insurers.

Consumers, the government, and the trial bar, need to keep a close watch on this problem. Any person who has purchased long-term care insurance, whose insurer denies coverage when long term care is needed, should contact their state’s attorney general’s office, and should obtain counsel, immediately. If the denial is improper, aggressive legal action is the only appropriate response for this new wrinkle on bad faith insurance practices.

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