Patients’ Life Policies Name Kin of Operator

The small, frail-looking retarded woman doesn’t know it, but she is paying monthly premiums on $5,000 worth of insurance on her life.

Neither does she know that, when she dies, the sister of the woman who owns and operates the run-down community care facility in which she lives will collect the insurance money.

In fact, the thin young woman with wide vacant eyes doesn’t even know the meaning of the word insurance.

She sits on the foot of a bed in her room in a squalid old motel on West Washington Boulevard that has been converted into a home for the retarded and the mentally ill. The woman, who is in her 30s, giggles to herself as a visitor looks around the room. The bare tile floor is filthy, the window is cracked, the ceiling light is an uncovered bulb, there is an old beat-up dresser, there are no chairs.

“It’s pretty,” she said of the room, speaking through gaps in her yellowed teeth. “I like it.”

The woman is one of about 50 residents of the facility owned and operated by Bobby Jean Hopkins. The state pays Hopkins $572 to $1,025 per month for each resident housed in the the Salubrium, as the home is called. Hopkins said she took the name from the word salubrius, meaning healthful.

When the residents of the Salubrium venture out onto Washington Boulevard, Hopkins said, they are frequently robbed and cheated of their meager state allowances by drug addicts who hang out in the tough neighborhood.

Hopkins acknowledged in response to questions that 12 of the residents are buying life insurance policies with death benefits ranging from $500 to $5,000 from United Insurance Co. of America, a firm that sells policies door to door. Nine of the policies, she acknowledged, name her sister, Esther Williams, as beneficiary in case of death, for a total of $17,500 in benefits.

The residents pay insurance premiums ranging from $9.60 to $15.82 per month out of their state allowances of $76 to $96 per month. For most of these residents, the state allowances are their only funds to pay for all personal expenses, such as clothes, cosmetics, candy--anything beyond the basic necessities that are supposed to be provided by the facility.

Victor Lekar, a United Insurance agent, said that each month he picks up a check covering the insurance payments from Hopkins, who handles the residents’ funds.

Hopkins said that several years ago, after a resident of the Salubrium died and was cremated by the county, some of the other residents were upset and expressed interest in buying insurance policies so that they would have funerals and burials and not be cremated when they died.

But when The Times recently spoke to seven of the dozen policyholders, four expressed no knowledge of whether they hold life insurance policies or even what life insurance means. Two others were aware that they have insurance policies but were confused about what was covered. Only one, an older mentally ill man, seemed to be somewhat familiar with details, such as how much he pays for his policy--and he said he doesn’t want it.

The man pays $15.82 a month out of his monthly state allowance of $76--or 21% of his personal income--for a life insurance policy that names Hopkins’ sister as the recipient of $1,000 in benefits when he dies.

“If I die,” said the man, “somebody will get the money. I don’t know who it is. I don’t know what they will do with the money. . . . I didn’t join the thing my own self. They put me in it--Mrs. Hopkins. . . . I’d rather have the money. It don’t do me no good to give somebody else my money if I die.”

Told of the results of The Times’ interviews with policyholders, Hopkins said:

“Every month it’s listed on their receipts (for expenditures of state allowances). I don’t know how they can say that.”

Hopkins said that previously the nine policies payable to her sister had been payable to the estates of the residents but that the beneficiary was changed last year after a resident died and Hopkins learned she could not use the policy as written to cover funeral expenses.

When Thomas Rain, 62, died of chronic bronchitis at the Salubrium last January, Hopkins sent the body to the Angelus Funeral Home and started to make funeral arrangements when she learned from the mortuary that Rain’s death benefits from his insurance policy would have to be handled through the county public administrator because there were no relatives and the policy listed Rain’s estate as beneficiary rather than an individual.

The county picked up Rain’s body from the funeral home, and Hopkins said she doesn’t know whether he was buried or cremated.

In fact, the office of the public administrator failed to process Rain’s insurance policy until August--seven months after he died--and the former resident of the Salubrium was cremated as an indigent.

Had Rain’s policy been in her sister’s name, Hopkins said, she would have been able to arrange for the funeral and handle expenses.

“It would have been full funeral arrangements,” she said, “with burial . . . at either Lincoln (Memorial Park Cemetery) or Woodlawn (Memorial-Park).”

Contradictory Records

But Angelus Funeral Home records show that before Hopkins learned that she could not pay for the funeral through Rain’s insurance policy, she had made preliminary arrangements to have the body cremated and the ashes scattered at sea.

The cost estimate, according to the funeral home, was $756, and Rain’s death benefits were $2,000, according to the office of the public administrator.

“We had not completed all the arrangements,” Hopkins said when asked about the figures.

Asked why she told The Times that Rain was to have been buried when she had arranged for cremation, which is much cheaper, she said, “I don’t recall that.”

She said that neither she nor her sister has ever made any money from the residents’ insurance policies and that several years ago she used money from a policy that named her as beneficiary to pay for the funeral of a resident.

“If I was really trying to do something,” she said, “instead of having 10 or 12 people (with insurance policies), wouldn’t I have 40 or 48 people on it?”

There is no indication that either Hopkins or her sister, Williams, has benefited from the insurance policies sold to residents of the Salubrium, but neither is there any legal requirement that any future death benefits paid to Williams must be used for funeral expenses.

State Investigation

Officials of the state Department of Social Services, which licenses the Salubrium, say they are looking into the question but know of no state regulations preventing operators of community care facilities or their relatives from being named as beneficiaries in life insurance policies of retarded or mentally ill residents.

“That creates a really suspect situation,” said Social Services attorney Mark D. Ginsburg. “This may call for a need for a possible regulatory change to give licensing (officials) more direct control over that kind of thing.”

Ginsburg said it could be a “violation against the rights of the client” if a resident were paying for life insurance without the mental capacity to comprehend the arrangement.

Hopkins opened the Salubrium about 20 years ago, she said, when “people were being sent out of state hospitals to less restrictive environments.”

“I can help handicapped people,” she recalled thinking at the time.

The 55-year-old widow, who said she formerly worked as a postal employee and as a bedside nurse, possesses more than $1 million in real estate in Los Angeles, according to conservative assessor figures, including rental units and a run-down nursing home in South-Central Los Angeles called Good Shepherd Manor.

‘Maybe’ a Millionaire

Hopkins said in an interview with The Times that “maybe” she would be worth close to $1 million if her debts were subtracted from her assets.

During the three years that Hopkins has owned Good Shepherd Manor, it has been repeatedly cited by licensing inspectors for poor conditions, as has the Salubrium.

Hopkins contended, however, that she has worked hard on maintainance at both facilities.

She said the Salubrium is regularly repainted and refurnished, arguing that the residents are destructive. She also insisted that she has made a “180-degree” improvement in conditions at Good Shepherd Manor since she bought it.

Until October, 1987, Hopkins also owned and operated a small group home for the retarded on Spaulding Avenue, several blocks northwest of the Salubrium, but she voluntarily closed it after a police drug raid on the facility.

According to state licensing records, the manager of the facility and several of his friends had turned the home into a wild party house where they drank, sexually abused a male resident and gave him cocaine. Hopkins said she plans to reopen the facility as a home for abused 12- to 17-year-old girls.