Probe Finds Abuses in Long-Term Care Policies

A House probe that sent senior citizens undercover to investigate sales of nursing home insurance found abuses by agents pitching high-priced policies of dubious value, legislators said Wednesday.

“I have never seen anything as bad as these long-term care policies and agents,” 73-year-old Lil Simmons, of Alexandria, Va., told two House subcommittees. “I would hate to be at their mercy when I really need help.”

House investigators sent seven senior citizens to meet with 14 agents selling policies for long-term care in nursing homes or at home as part of a broader inquiry that also examined complaints to insurance departments in all 50 states.

“Every single agent, selected at random, either misrepresented their policy, engaged in abusive sales practices or flat-out lied,” said Rep. Ron Wyden (D-Ore.). “Not a single one was truly straight with their elderly customers.”

A report on the investigation was released by Wyden and Rep. Edward R. Roybal (D-Los Angeles), chairman of the House Select Committee on Aging and its subcommittee on health and long-term care. Wyden is chairman of the Small Business subcommittee on regulation, business opportunity and energy.

The subcommittees met Wednesday to hear testimony from senior citizens and advocates for the elderly, and to review secretly recorded videotape of agents pushing policies with false promises.

“Absent remedial regulatory action by state and federal lawmakers, long-term care insurance is of questionable value and not a good buy,” the report said.

The Health Insurance Assn. of America disputed that assertion, saying there are good, affordable policies available from reputable companies. It said consumers need to review policies carefully to make sure they provide what agents promise.

The legislators’ report said common marketing abuses include exaggerating what the policies cover, selling duplicate or unneeded policies, delaying refunds on canceled policies, delaying benefit payments, disqualifying policyholders when they file for benefits and promotional materials that suggest a government endorsement.

Wyden said that the investigation underscored the need for proposed legislation to improve consumer protections and require that policies contain standardized language and include certain benefits, such as inflation protection.