A lawsuit contends that a health insurer ran a scheme to avoid paying in-home care claims from what could be thousands of California’s elderly residents.
Senior Health Insurance Co. 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 statement from the company said its sole mission is to pay eligible claims accurately and in a timely manner.
“SHIP focuses on ensuring that eligible claims are paid in accordance with the policy contracts that its customers have purchased, and operates without a profit motive,” said a statement from Annette Gobrogge, an executive with the Carmel, Ind.-based company.
SHIP has a strong record of compliance, the statement said.
The company is run by a trust created by the Pennsylvania Insurance Department. It was previously known as Conseco Senior Health Insurance Co. and services long-term policies originally sold by Conseco, American Travelers Life, Transport Life, United General Life, and Continental Life.
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 claims 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 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.
“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.
His son, Eric Hall, said his father bought the policy to spare his children some of the time and expenses that many parents require when they get older.
“But SHIP has only drained my family’s resources,” 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.”
Was this article valuable?
Here are more articles you may enjoy.