Quiat on Claims : New York Disability Insurance Lawyer & Attorney : Michael Quiat : Uscher Quiat Uscher & Russo Law Firm : ERISA, Denied Claims

A recent article outlining the effect of insurance regulators trying to do away with the “discretionary clause” in ERISA disability income insurance policies raised an interesting and basic issue concerning life in these United States.

Why do we keep kidding ourselves about what we do?

The “discretionary” issue here concerns whether plan administrators should have the discretion to determine whether a claim is covered by an ERISA policy when the insurance company is both the insurer which will pay the claim and the administrator of the ERISA plan. It doesn’t take a genius to know that this “discretionary” situation creates a powerful incentive for the administrator to favor the insurance company in making that decision.

Defenders of this “discretionary” system say this procedure keeps costs manageable and that to do otherwise would raise the cost of insurance because with the discretionary clause the insurer will pay fewer claims. They are correct. But, what does unfair favoritism have to do with protecting the sick or disabled?

Is it better to call a thing a nice sounding name, but not give the nice-sounding protection the name implies? Have we become so used to Madison Avenue that we are willing to play the ad game with the terms of our insurance policies?

When you buy an insurance policy, you expect to be fully protected against risks you bought the policy for. Why should the insurer insurer have the advantage of unfairly denying your claim and then having the courts constrained to defer to that unfair denial, simply because such a system leads to smaller disability payouts and, hence, lower premiums. If the insurance doesn’t cover what it is supposed to cover, who cares how low the premiums are?

What good is a policy that doesn’t do what it s supposed to do? And, how far do we carry this sham?

Policies are supposed to be statistically underwritten so that the insurance company knows the risk and sets its price accordingly. If the price is high, so be it. Reduce some of the benefits so that the premium meets the cost. Don’t use an artificial stricture on paying benefits to deprive deserving claimants what is due them.

During the last decade, we have all had the experience of living a lie: Banks urging people with bad credit to take their credit cards and use them recklessly; calling “liar’s loans” home mortgages; thinking housing prices would go up and up and up forever; Wall Street becoming a crap-shooting gambler, shuffling paper back and forth and making billions in bonuses on the paper shuffle; rating companies being fooled (or worse, just okaying any deal for the fee money); and on and on and on.

We are suffering for living the lie because it felt so good. Now, let’s start getting real. If insurance requires a certain premium, require that it be paid. Shortcuts created by fudging what is actually going on leads to injustice and worse.

If an ERISA policy calls for “discretion” on the part of an administrator who works for an insurer, and the decision is required to get deference in the courts, let’s call it what it is:

A maybe disability income policy

• Email This
• Print
• Comments
• Trackbacks
• Share Link

We think it was a welcome relief for recently discharged or about-to-be-discharged employees that a law, recently enacted by Congress and signed by President Obama, extended much needed help to those in need. The American Recovery and Reinvestment Act extends COBRA subsidies for an additional six (6) months for a total of fifteen (15). months..

In a move to help those laid off between September 1, 2008, and February 28, 2010, the government provides a subsidy to employers of up to 65% of the COBRA health insurance premium to be paid on behalf of a recently unemployed person. The COBRA beneficiary will have to pay the balance of 35% of the premium.

The subsidy program is available to employees discharged between the requisite dates whose adjusted gross income for tax purposes was less than $124,000 for an individual and $250,000 for a couple.

The details of the legislation are somewhat complex. For those interested in more information, click here.

If the administration and Congress really want to come to grips with this recession, they should provide more of this type of grassroots relief. Such relief gives hope and hope is the foundation stone upon which this country will climb out of the recession. .

• Email This
• Print
• Comments
• Trackbacks
• Share Link

A recent article on the high cost of air ambulance service raised an old issue in our mind: How much would you be willing to pay to save the life of your loved one? Or somebody else’s loved one?

When a child is ill and running a high fever from a cause unknown, a parent would pay almost anything to get the fever down and make the child well. But, once the emergency is over, the parent looks carefully at the charges and may become upset at the cost.

Air ambulances are usually used in emergencies where the medical personnel on the ground evaluates a victim and believes the illness or injury is so severe that the trip to the hospital by ground ambulance would be life-threatening and that the most immediate full facility attention is required.

When this occurs, neither the patient nor any friend or relative, worries about the cost of air transport. They just want to get the best available medical personnel and equipment working to save the victim. It is only after the patient is stabilized and on the way to recovery that the $12,000 to $25,000 cost of the flight becomes an issue.

• This observation is not a criticism of people’s conduct. It is an observation which goes to the     basic foundation of the type of health care system we want in the United States.
• Do we want a system which gives basic medical, hospital and custodial care to all people? Do we want a system which gives the utmost care to all people?
• Do we want a system which gives the utmost care to only people who can afford to pay?
• Do we want a system which gives the utmost care to people who are lucky to be old enough to    be covered by a government system which will pay, while younger people with much longer life expectancies are left out in the cold?

To find our answer to these questions we must put ourselves in the position of a parent with a very sick child. What would we want in the way of care for that child?

The air ambulance is a good example. It is called when time appears to be of the essence. Trained, high-priced air and medical crews have to be on standby 24 hours because one never knows when an emergency call will come in.

Once on the scene, should the aircrew check the victim’s insurance papers before acting? And, if the crew finds the victim isn’t insured should they refuse him or her transportation to a hospital even if it means the person will die?

These are basic questions we must answer to have a coherent approach to health care in this country.

Slick slogans won’t solve the basic problem: Do we want a health care system that gives everyone a chance to get the medical help they need or do we want a system which favors some and ignores others?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Drug companies have been raising their prices in anticipation of a government health reform program which may try to rein in uncontrolled drug price rises the companies have grown used to pocketing over the years.  So, what’s new?

As reported in the NY Times, the wholesale price of drugs has gone up about 9% in the last year while the Consumer Price Index fell by about 1.3% during the same period.  The drug industry claims the prices have risen at this rate, a rate unprecedented for the last
15 years, for good and valid business reasons.  Realists say the industry is preparing for health reform, one of the cornerstones of which is trying to curb drug spending.

Whichever it is, the consumer gets caught in the middle again.  While the drug industry trumpets its agreement to cooperate in lowering the nation’s drug bill by $8 billion a year in support of national health reform, it has already increased the nation’s health bill by more than $8 billion even before the health legislation gets its legs under it.

The excuse they use is the old saw that they have to charge more to generate monies for research and development of new products.  Drug manufacturers have been using this excuse for raising prices for decades although the real reason is to keep their shareholders happy..  But, nobody seems to give a darn about the end user, the person who desperately needs the drug to stay alive or functional. Whether or not these afflicted people can afford the price, they have to find some way to pay. 

Speaking of new product research and development, how about the billions and billions taxpayers spend on basic research at universities which lead to the development of many of these drugs and medications?  Why doesn’t the taxpayer get a cut of the profits just as shareholders do?  Why does all of the good stuff (profits) go to the company owners, while the taxpayer whose funds started the research and development, gets zilch?

It’s amazing how the drug companies, among others, have no argument with the government (taxpayers) putting money into basic research which leads to discovery, but object to government (taxpayers) sharing in the fruits of discovery. 

Businesses in public transportation are held to a higher standard of care in their business because of their obvious obligation to see to the safety of the public.  Why aren’t drug manufacturers which get a patent (and a monopoly) on a critical medication also held to a higher standard when it comes to pricing these vital drugs?  These drugs also are an integral part of public safety for our most disadvantaged population – the elderly, the sick and the injured.

Not only that, the drug companies use the same “research and development” ploy to do away with the competition they claim to love.  They get government agencies, which are huge buyers of their product, to tie their hands when it comes time to negotiate pricing, thereby bloating Medicare and other budgets, while fattening profits for “research and development”.  And, who ultimately pays?  Us, the taxpayer.

It’s time to stop blithely accepting the “research and development” excuse for allowing drug companies to price vital medications at whatever they choose.  “Research and development” should be thoroughly researched to determine a valid percentage of cost which makes sense for the drug companies as well as consumers.  Then that percentage should be used in pricing a new drug so that consumers are not swamped by what drug companies decide they need for “research and development”.

Once that percentage is established, drug companies should not be allowed to price above what that percentage calls for.  No more nebulous “trust us to be fair” leeway for drug companies to price at whatever they see fit while holding a monopoly on a patented drug.

If Congress and the drug companies won’t go for that, then give the taxpayer a “research and development” percentage for all of the tax monies used to develop that drug.

But, don’t add it to the price.  Just take it out of profits, for a change

.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Sometimes getting back to basics is the most helpful way to keep people informed about their disability income insurance coverage. One of the most basic of the basics is to read and understand your disability income insurance policy. It has always distressed us to find that many, many people don’t read their policy - the contract under which they will present a claim for benefits.

The first basic is what type of disability income insurance you have. Is it a group policy covered by ERISA or is it an individual policy?

Many policyholders are not certain of the difference the answer to this question makes in terms of coverage and requirements for proving a claim of disability.

An ERISA policy purchased by an employer for employees is not nearly the same as a policy bought by an individual. The ERISA policy is somewhat of a mystery to the employee because usually no policy is delivered to the individual. The employer has the policy and may give the employee only a Summary Plan Description (“SPD”) of what is in it.

Anyone familiar with insurance companies and policies knows a summary does little good when a claim is contested and the insurance company looks into every nook and cranny of the policy language to find a reason not to pay.

So, if you are covered by an ERISA policy it would be most wise for you to take a good look at it before a disability arises so that you know what protection you have or don’t have and can prepare yourself before a sickness or injury strikes. Ask your boss or your Human Resources Director for a copy so you can read and understand the ERISA policy yourself.

But because a disability income policy may be privately purchased and not subject to ERISA doesn’t mean that it doesn’t remain a mystery. If a policyholder doesn’t read and understand the terms of the policy, the individual doesn’t really know what protection is afforded and is, therefore, as much in the dark as an uninformed ERISA policyholder.

Relying on an insurance agent’s or an insurance company ad’s description of what protection is in the policy is never a good idea. It is a particularly bad idea when a disability income policy is involved because of the complications of exactly what is covered, how it is covered, for how long it is covered, and the difficulty of the hoops the policyholder will have to go through to get benefits.

In both ERISA and individual policies, once you know what you have, you are able to decide if that coverage is what you want for yourself and your family. If it is – fine. If it is not, then you may seek to change your individual policy or buy additional individual coverage to add to an ERISA or private policy to bring your coverage up to your standard.

Either way, once you understand your policy, you will be certain of what protection you have before disaster strikes and it is too late to do anything about it.

We know all too well that insurance policies are boring to read and difficult to understand. But, don’t be lazy. Don’t be intimidated. Take your time. You can do it!

But, if you do all of the above and you still have questions, get the answers you need now while you can still do something about any changes you might want to make for the sake of yourself and your family.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Almost 40% of health insurance consumers don’t understand they can appeal an insurance company denial of a claim, according to a recent survey by the National Association of Insurance Commissioners, an organization of State insurance commissioners.

This statistic means a large percentage of policyholders accept insurer denials at face value even though history clearly shows that most of these companies do their best to deny, deny, and deny claims. Add to this group many claimants reluctant to push their claims in the face of what they see as the impenetrable wall of insurance company resistance and one can begin to fathom the rich returns to insurers and their shareholders of insurance company intransigence.

How this works to the benefit of insurance companies may seem to require monumental mathematical machinations. But it is really quite a simple formula. The insurer calculates its underwriting risk by taking a mathematical “worst case” scenario and calculating its premiums based on this scenario. This affords the insurer the highest amount of premium to cover its risk in the event the worst happens. This is good business practice because there is no guarantee that the worst won’t happen.

But, having collected the highest premiums, the insurance company then wages all out war on claimants, denying many perfectly valid claims. These insurers rely on the fact that many claimants don’t know a claim denial can be appealed and also on the natural reluctance of many claimants to undertake an appeal. (See Don’t Be A Wimp).

What a windfall for the insurance companies! They charge the highest prices for their product because they base the premium on the high end of the underwriting spectrum and then they cut their outlay on claims so as to push them to the lowest end of the spectrum. All of the cash saved in between goes to insurance company profits. And, when you are talking health insurance, the cash saved amounts to billions of dollars.

Can anything be done about this system which hits many sick and injured people at the worst time in their lives? Yes, it takes an all out effort by lots of people to get the word out – insurance company denials are not the Gospel. If a claimant has a valid claim, then they must appeal the denial and right the wrong.

Those who can help:

* Friends and family who know that the insurance company turndown is not the last word. They have to let their uninformed relatives and friends also know.
* Doctors who treat claimants and lawyers who pursue claims have to preach to the uninitiated that they have the right to appeal for benefits for which they may have paid premiums for years.
* In the interests of compassion, fairness and morale, Human Resources Departments should inform employees that they have the right to appeal an adverse ruling by an insurance company even though the employer may think its interest lies in paying the fewest claims.
* Web sites and bloggers have to continually get the word out to those seeking information on claims at their sites that there is life after an insurance company claim denial.
* State Insurance Commissioners should mandate that a denial of a claim must be accompanied by a “plain English” and unequivocal outline of the claimant’s right to appeal the decision and the method for filing such an appeal. To be certain of the simplicity and clarity of the information, the State may require the notice to be in a certain form approved by it.

Insurance companies are entitled to deny claims in proper cases. They have to protect the financial stability of their businesses and have a duty to their shareholders.

But, this duty should not include taking advantage of almost 40% of consumers or a policy of denying claims knowing that a substantial percentage of the turned down claimants either don’t know they don’t have to accept the turndown or don’t have the gumption to fight the denial.

This is especially true when many of these claimants are making health claims at a time when they are seriously sick or injured. Denial may be a good way to jack up profits but it’s an awful way for one human being to act toward another.

And, all insurance companies act through the agency of human beings. Or do they?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

There was a very enlightening statistic in Nicholas Kristoff’s column in the NY Times today (11/5/09) – Americans over 65 years of age have a longer life expectancy than people in the average industrialized nation, while Americans under 65 rank 31st in life expectancy (on a level with Chile and Kuwait) when compared to those nations..

The obvious reason is that people over 65 in the U.S. have the protection of “government-run health insurance” while those under 65 are left to the tender mercies of private insurance health plans or no plan at all.

With this statistic staring people in the face one can only wonder why there is such vehement opposition to a Medicare type health system for all Americans. People tend to forget that there was much the same outcry against Medicare when it was first proposed for passage in 1966. How many Medicare beneficiaries would give Medicare up today?

The latest Ken Burns TV documentary on our National Parks is a strong reminder that not everything run by the government is a flop. In fact, as shown by Burns, some are startling successes and do a lot of good for the American people..

When the statistics show that life expectancy for Americans bumps up substantially when Medicare-style health care comes into the picture, why not try it?

Who knows – in another 60 years we might find that none of us wants to give that up either!
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

We can't help notice the recent striking increase in hospital and health insurer advertising on radio and television. It seems that every hospital and health insurer suddenly feels the need to sing its own praises, in commercials which are elaborately produced, at great expense, by professional spinmeisters, and are designed to inspire a sense of fear and awe in any patient who might even consider going elsewhere.

Indeed, hospitals are now being marketed just like any other commodity. We are told repeatedly, not only of their prowess in medicine and technology, but also of the kindness and caring which makes each one special and superior to the next.

We recently went to visit a friend at a local hospital and were amazed to see, displayed on a mantel behind the main reception desk, (which, by the way, had the look of a 4-star hotel), a series of ornate plaques announcing the ratings given the hospital by a well known private commercial testing agency (heretofore known more for its evaluation of cars than care).

When exactly did we come to this point, and why? Is nothing, including life and death, free of spin anymore?

More importantly, as the hospital and insurer rush to publicly proclaim and "sell" the public about their claimed superiority becomes more pervasive, has there been any corresponding increase in quality of care? Has there been any sign that the cost of health care is going down? Unfortunately, the answer to both questions is a resounding NO. Are the spinmeisters  being hired to distract us from these very sad facts .

As the nation debates the wisdom and cost of national health insurance, and bemoans the outrageous expense of health care in this country, maybe we should start to think about what is really important in the delivery of health care. Why are slick commercials and private ratings accolades becoming so important, and what does that say about the delivery of healthcare in this country?

Perhaps the healthcare and insurance industries, and hospitals in particular, should spend less time and money telling us how good they are, and more time and money actually being good.

What a revolutionary concept!


 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

 Being invited to speak to a doctor’s organization in the New York Metro Area about how confident they should be in the protection they think they get from their disability income insurance policies, got us thinking specifically about doctors’ insurance problems.

And, doctors have plenty of them, although most physicians don’t know it until they are stricken and it is too late.

First off, doctors have to realize that they will get special attention (of the wrong kind) from a disability carrier if forced to make a long term disability claim. Why? Because a doctor’s long term DI claim, especially if the doctor practices in a specialty, usually involves a heavy potential payout for the insurer and heavy payouts are something insurance companies despise.

Most physicians think they have “Own Occupation” coverage and feel secure. Not so fast. Believe it or not, there is no one definition of “own occupation” in insurance policies. For example, a policy may have a perfectly sound “Own Occupation” clause, but with a time limit. Therefore, it may be described by the company as an “Own Occupation” policy, but the protection of the clause ends in say, 2 years, and after that the definition of disability may become much more general.

So, if you are a surgeon and think you are buying a disability income policy that will cover you and your family in the event you can no longer perform surgery, you may be surprised to learn, after 2 years, that you have to go back to work in a lesser medical field and will no longer be paid your disability benefits by your insurer.

Another major issue doctors should resolve before they can feel secure about income if they should become disabled is to determine if their policy is an individual policy or a group policy which involves ERISA, a Federal statute, which adds a completely new set of problems to the doctor’s woes if the unthinkable happens.

It is difficult enough to pursue a disability income claim when the insurance company is determined to find any way it can not to pay, without having the insurer have the advantages that a group ERISA policy gives it.

The way to tackle this problem before a disaster strikes is for the doctor to read and parse every word of his or her disability income policy before the need for claim arises (hopefully it never will), because the policy language (strictly construed) determines the benefits available. No more and no less.

If the doctor wants help to understand the language of the policy a lawyer with disability income insurance experience should be consulted. Don’t rely on what the insurance company ad or the insurance agent or salesman told you. Read it and understand the policy yourself.

And, most important of all – DO IT NOW – while you think of it and BEFORE you have to make a claim.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Being good can be very, very bad for disability income insurance claimants in many ways, all locked away in the fine print of the policy. See Mr. Nice Guy.

A recent New York case added a new pitfall for claimants who try working at a lesser job even when they are physically or mentally not up to it. Insurance companies ambush unsuspecting “Good Joes” waiting for them to fall into the trap of trying to continue to work even if they can’t hack it because of their disability.

The issue in McCauley v. First Unum Life Ins. Co., 551 F.3rd 126 (2nd Cir., 2008) , did not involve the warning we issued in Mr. Nice Guy. McCauley dealt with the insurance company tactic of wrongfully withholding benefits and thereby forcing a disabled person to do anything in order to live, and then claiming that the new work cut off the insured’s right to claim the disability under the terms of the policy.

The First Unum policy in this case contained a provision that if the insured was employed for more than 6 months while earning more than 80% of predisability income, the insured would not be entitled to benefits.

After Unum wrongfully denied him benefits, the insured, desperately needing money to live, worked for 8 months at a salary exceeding the 80% limit. He worked at a company which was sympathetic to his disabling condition and employed him anyway, recognizing the limitations of his disability. But, even with this compassionate help and despite his pressing financial needs, the claimant could not continue because his condition was too debilitating.

Even though the policy was governed by the ERISA statute, First Unum jumped on the issue of claimant’s employment for 8 months, citing the policy language, even though First Unum’s wrongful denial of benefits put the claimant in a position where he needed money to live so desperately, that he was forced to try to work, no matter how trying or demeaning it was to work in his condition.

But, the court, in its wisdom, applied the ERISA doctrine of unconscionability, declaring that to wrongfully deny ERISA benefits and force a disabled claimant to try to earn income at peril to his health, and then to claim this employment destroys the claimant’s right to benefits, is unconscionable and First Unum’s denial of benefits would not stand.

It is heartening when a court recognizes that the reality of just trying to go on living trumps the cold, hard, sometimes unrealistic and impractical, language insurance companies use in their policies.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Isn’t it time for the naysayers on health care reform to face the reality of what is going on? For too long we have buried our collective heads in the sand and refused to look reality in the eye.

What we mean is that the health care system in the United States in going to hell in a hurry and very few seem to want to do anything about it. This seems most true for older people who will be the hardest hit victims of the coming health system train wreck. (Most people don’t recall that when Social Security was passed in the 1930s, life expectancy for men was about 65, the age of retirement. Today the life expectancy for men is about 78, a gain of 13 years).

The health care system is more than the convenience of your next visit to the doctor. We all want to get right in to see the doctor, get the best medical advice and treatment and not pay for it. GREAT! However…

• Medical science is making more and more breakthroughs, prolonging life, which means more costly doctor and hospital visits for more and more people.
• Medicare premiums are not nearly enough to sustain the system for its
ever-expanding population. (Remember the baby boomers).
• Health insurers continually raise premiums to provide more and more profits for their shareholders (and larger and larger bonuses for their execs).
• A “free enterprise” system in which there is no free enterprise. U.S. law prevents Medicare from exercising its vast buying power to lower drug prices in the U.S. Is this free enterprise? U.S. law prohibits Americans from freely buying medications overseas where prices are substantially lower. Is this free enterprise? Exorbitant drug prices eat up health dollars at an alarming rate and deplete the ability of the health system to take care of all of us at less cost.

We could go on and on about the cost of “defensive medicine”, doctors owning an interest in testing and service providers thereby having a great incentive to order unnecessary tests and services which provide them profits, wasteful and harmful recordkeeping, and, worst of all, 45 to 50 million Americans without health insurance, leaving them to fend for themselves by going to hospital emergency rooms or not going to the doctor at all.

We all know the old saw – “You get what you pay for”. If you can’t pay, you don’t get. With fewer people paying into Social Security will there be any security, social or otherwise in our near future or will the system as we now fund it have to change? With Medicare expenses skyrocketing because more and more people are living longer and requiring more and more medical and hospital care and with new and expensive treatments being discovered every year, how can we pay for it with the old Medicare and the “profits at all costs” private insurance system?

There is momentum for change now. It took almost 20 years from the Harry and Louise Days for the country to get up the nerve to face the issue again. We can’t afford to just make cosmetic changes which don’t get to the basic needs of health care in this country. There aren’t another 20 years left to get it right for all of us.

THINK!!!!

• Email This
• Print
• Comments
• Trackbacks
• Share Link

We have just read an appellate court analysis of a technical legal point which carries with it a pressing human consideration under ERISA disability claims..

The legal issue is whether some appeals of ERISA rulings are actually ripe for appeal. Or, should they be dismissed because the remand order of the Federal District Court below was not a “final order”.

The foundation for refusing to rule on such disputes is that an appeals court will generally not hear an appeal unless it is an appeal of a final order or judgment, in which all issues of the dispute below have been adjudicated. Appellate courts generally do not want to make decisions on only portions of a case, leaving other issues unresolved so that the court may have to deal with a later appeal in the same case.

This approach may be OK for cases which do not involve ERISA disability income claims. In ERISA disability cases, an insurance company administrator usually controls the decision in the matter. Knowing the appellate court aversion to ruling on a less than final order, the administrator may find it advantageous to “pingpong” his decision by failing to set forth completely the reasoning for the administrative decision. This would likely cause the hearing court to send the matter back to the administrator to complete the record.

This can lead, as it did in Gerhardt v. Liberty Life Assur. Co. of Boston, U.S.App.LEXIS 16170 (8th Cir, 2009) , to rejecting the appeal of a remand by the District Court because the administrator failed to consider all of the issues in deciding to reject the disability claim.

But, as another court has said, if the process of granting remands becomes routine when an administrator fails to present a complete case, it would allow “Mulligans” to sloppy administrators at the expense of both courts and disabled claimants.

In fact, we are certain, if insurance companies realize that this ploy would add substantial time and expense to a claimant’s burden, we know they will use it to the fullest extent.

We agree with Chicago attorney Mark D. Debofsky who brought this case to our attention in the August issue of his DISABILITY E-NEWS ALERT – “If a claim decision is defective, the claimant deserves an award of benefits.”

Let’s not allow insurers use a racket to play ping pong while claimants in physical and economic pain are forced to follow the bouncing ball.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

There’s nothing a disability insurance carrier likes better than a claimant who is “Mr. Nice Guy”. These are people who keep trying to do work even though they can no longer continue the occupation for which they have an “own occupation” policy and have a
clear cut claim for disability benefits.

What’s wrong with trying to keep working, one may be tempted to say? It’s the pioneer spirit. “Don’t give up the ship” and all that.

What’s wrong is that Mr. Nice Guy may scuttle his claim for benefits by trying to work at another job before making a claim under his policy. The carrier may have the right to say the claimant can perform duties similar to the ones he is performing at the time the claim is made, so he is not disabled as defined in the policy and, therefore, is not entitled to any benefits, let alone benefits for the occupation and income intended to be protected when the policy was purchased.
The problem is that “own occupation” is interpreted to mean the actual occupation at the time of claim – not the original occupation for which the insured originally purchased coverage.

So, if you modify your occupation to accommodate a disability, by giving up the duties you can no longer perform, then those duties are no longer considered part of your occupation when you subsequently file a disability claim.

Also, even if the carrier has to pay, the carrier may be required only to pay benefits based upon the salary or income of Mr. Nice Guy’s employment at the time of making the claim. These benefits would likely be much less than the benefits originally contemplated by the policyholder at the time of purchase. And the hefty premiums paid for the anticipated coverage would be gone with the wind.

So, if you have been astute enough to cover yourself and your family with an “own occupation” disability policy and you become disabled under its terms, don’t be a Mr. Nice Guy. To be safe, make your claim with your insurer under the terms of your “own occupation” policy when you become disabled under its terms and before you start doing any other work.

Certainly be Mr. Nice Guy to your family, your friends and even to people you may meet in the street. But, not to your disability insurance carrier.
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

If you are one of those who still believes the private health insurance industry is there to protect your interests you probably still believe in fairy godmothers, because you are really going to need a fairy godmother when you are sick or injured and the insurance company has to cough up cash.

For a thorough and detailed exposition on the motivations and tactics of disability income insurance carriers such as UnumProvident and Paul Revere, you should read the opinion of U.S. District Court Judge James C. Mahan in Merrick v. Paul Revere Life Insurance Company, et als, 594 F. Supp 2nd 1168 (D. Nerv. 2008).  It is a clear and convincing scorecard of the ways in which the insurance companies hit their policyholders, especially when they are down.

In the carefully worded, detailed opinion, by Judge Mahan, he finds that the reprehensible conduct of these insurance companies has garnered them “…hundreds of millions if not more…” in benefit dollars at the expense of physically, mentally, emotionally and economically vulnerable individuals (their policyholders).

The judge, after hearing all of the evidence presented by both sides, obviously concluded that the reprehensible conduct toward the clearly disabled plaintiff in the case was “…not the result of accident or inadvertence, but was part of a widespread corporate plan or scheme to augment profits through wrongful conduct targeted at disabled policyholders…”.

He went on to declare that the only conclusion he could draw after hearing all of the evidence and weighing the credibility of witnesses for both sides is that the defendants, Unum and Paul Revere, “…engaged in a widespread corporate plan, and conscious course of conduct firmly grounded in established company policy, to disregard the policyholder-plaintiff’s rights and the rights of tens of thousands, if not hundreds of thousands of other policyholders…”

The detailed and thoughtful decision by Judge Mahan puts the lie to opponents of health care reform. The system isn’t functioning for those most in need for it to function fairly, those whose health requires a claim to be made. When you are sick or injured, you are not at your fighting best – and that’s when the insurance sharks start their “delay and deny” act.

If our health system is ever to work properly, insurance companies will have to take seriously their obligations to policyholders and go beyond corporate profits only, “first, last and always”. Insurers will have to give fairness and “peace of mind” to policyholders who will then actually get what they paid for without the unconscionable “scorched earth” policy in regard to claims.

Only those who still believe in fairy godmothers can really believe that anything but government health reform is big enough to force such a change for the better.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Now that we are coming down the home stretch on the Congressional vote on health care reform, the hucksters are getting their baloney machines into high gear. Us guys who are just ordinary folks have to watch out to see that we don’t get slapped between two slices of white bread, doused in mustard and swallowed whole in the barrage of half truths and slanted statements by the people who don’t want change – our friends the health insurance industry. They just have it too good.

An article we posted just a few days ago (What You Can Do For Your Country) becomes more and more important as the battle heats up. Television and newspapers will be filled with pro and con position papers espousing the propaganda of whichever side is footing the bill. The best advertising and public relations minds are hired to press the public’s buttons so as to build support for their side.

We thought of a way to level the playing field in the struggle to come up with a fair law that would do the trick for most Americans:

Prior to Congress undertaking the job of writing a health bill, all of their governmental health coverage should have been canceled with a proviso that when they passed legislation, they would be covered by the new plan which they enact, and would have to pay health premiums for their respective policies out of their own pocket.

Only then, when they were in the same position as the rest of us, could they really act in the interest of all and come up with a fair program for the American people. But, it just ain’t gonna happen.

Many people seem to fall for the “Socialism” and “big government” labels fostered by the insurance company funded ads. But, what is Medicare, if not a “big government” run health care system? Yet, not one of those ads will say a negative word about Medicare because the American people have seen it in action and they know it works.

So, as we said a few days ago, first, it is vital to check who is behind any statement made by any individual or organization in this fight. A group may have a name that sounds strictly neutral – but are they? Know the real people and organizations behind the statement and you’ll be able to evaluate it properly.

Second, is to listen carefully to what is being said. If a statement says nothing more than “big government”, “Socialism” and “health czar”, it offers no help to you in evaluating the merits of the proposal. These are catch phrases which seemed to work before to defeat what the insurance companies don’t want and they are hoping it works again. Don’t allow it.

Evaluate arguments based on more than slogans because the health care issue is of vital importance to you and your fellow Americans. Health care costs are breaking the economy and threaten to become a full-blown economic disaster in just a few years if we don’t try to do something about it now. If each of us is not willing to consider sacrificing a little bit now, we could very well lose it all in the near future.

The false ogre of government-run health care is a false god. Look at Medicare, Armed Forces medical care and the Veterans Administration programs. They are clearly government-run and are operating just fine for many millions of Americans. Why can’t a government program fashioned on these examples operate just as well as an alternative to private insurance? Where is the proof that it wouldn’t?

With the vote in Congress on health care reform not due until some time in September, the health insurance companies have more than a full month to bombard Americans with propaganda that talks about everything but the real issues:
 

* Refusal to cover those with preexisting conditions
* Escalating health insurance premiums which fewer and fewer can afford
* 45 million Americans without any coverage at all
* A serious illness can bankrupt the average uninsured family
 

Any new law must deal with the real issues in the interest of all of us. Your input to your representatives in Congress will have a lot to do with the outcome. Don’t follow the insurance company party line – do what’s really good for you and the rest of us.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

UnitedHealthcare, a UnitedHealth Group company and a major player in the health insurance industry, announced today that it has agreed to acquire Health Net of the Northeast's licensed subsidiaries. Health Net of the Northeast operates a large health insurance business in the New York Metropolitan Area.

Although we are certain the companies involved will profit from this move, we are not so sure about Health Net policyholders.

The transaction, subject to regulatory approvals and other closing conditions, is expected to close within 12 months.

Health Net serves 578,000 members in Connecticut, New York and New Jersey: 437,000 commercial risk members, 35,000 self-funded commercial members, 55,000 Medicare Advantage members and 51,000 Medicaid members, according to the announcement.

Based upon our history with UnitedHealthcare on health insurance claims, we are not certain this ownership change is going to be beneficial to policyholders when they have to make claims.

We guess we will find out soon enough.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

A recent article in The Washington Post reminded us of one of our pet peeves – people relying on studies or reports as incontrovertible fact without checking the background of the person or organization making the report.

The Post article pointed out that Representative Eric Cantor, House Republican whip, and Republican Senator Orrin Hatch both cited the Lewin Group as “nonpartisan” when speaking out against proposed Democratic health care change legislation.

The Lewin report predicted that 100 million people would go off the rolls of private, employer-sponsored health coverage if a version of a health bill was made into law. This was seized on immediately by opponents of new health care legislation and cited time and time again as an “independent” study. (The Congressional Budget Office came to an entirely different conclusion after a study. The CBO estimated that enrollment in a public plan would involve only 11 to 12 million people.

What was unsaid by Mr. Cantor and Mr. Hatch was that the Lewin Group is wholly owned by UnitedHealth Group, one of the nation’s largest health insurers. Further, Lewin is a part of Ingenix, a UnitedHealth subsidiary which was accused in New York for skewing doctors’ fee data to save health insurers millions in out-of-network insurance payments to policyholders. (Earlier this year, United Healthgroup agreed to a $50 million settlement with New York State on this issue).

This is a “nonpartisan” organization when it comes to health insurance issues? We think
not!

With the health care battle entering its final stages, it becomes more and more important for people trying to untangle the complicated issues in health care coverage to take the statements of each side with several “grains of salt”. This is particularly true when either side makes a statement based on an “incontrovertible” source for its information. It is up to us the listeners to delve further into relationships and history to see if the claim of independence of judgment really holds up.

But, this holds true for more than just the present most important health care battle. Whenever a claim is made that raises any doubts, the listener should take it with a grain of salt. Who made the claim? Whom does the claim benefit? Who paid for the study upon which the claim is purportedly based? Are there relationships which might cast doubt on the veracity of the claim?

Prime examples are advertising endorsements. Without an affidavit as to how much the endorser received for providing the endorsement, who can believe in it? Yet, many people must or else the ad agencies wouldn’t spend so much time and money on them.

The upcoming health care decisions in Congress are vital to the future of America. Each person has a vital interest in the outcome. There will be many “nonpartisan” claims made by both sides. Get out your salt shaker and investigate them yourself.

The future of yourself, your family and your country truly depend on it.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

A recent editorial in the New Jersey Law Journal (7/13/09) reignited a fire in us about how insurance companies play hard ball with their policyholders because litigation wears down the hardest claimant and leads to settlements totally advantageous to the insurance company.

As a result of this hard ball policy, insurers get another advantage – policyholders usually have to pay their own attorney’s fees and legal costs (many times, considerable) even when the courts find their claim was absolutely justified.

The genesis of the problem is the “American Rule” which requires each party in a contract action to bear his or her own legal expenses. This rule is the law in most States, except where they have been modified by statute or court rule.

In New Jersey, R. 4:42-9(a)(6) permits the award of attorney fees to a litigant for being forced to pursue a third-party claim against their insurer. The New Jersey Law Journal editorial decried the distinction made by the court rule which allows policyholders to collect their legal fees from the insurer if the company wrongfully refuses to defend them against third parties, but not if their insurer wrongfully refuses to pay the policyholder in a direct claim, under an individual disability policy, for example.

From years and years of practice in pursuing disability income insurance carriers, both ERISA and private, we have come to understand that with many insurance companies, obfuscation and delay are primary strategies because these companies know that many litigants will become discouraged and either drop their claims or accept a lot less than they deserve under the terms of their policies, simply because they cannot afford the enormous cost of litigation.

The worst part is that because of the American Rule, there is no downside for insurance companies. Under the Rule they do not have to pay the policyholder’s legal fees and costs, even when they are wrong, so the insurers “song and dance” their way through litigation, all to their benefit and to the heartache and loss of their policyholders.

On the policyholder’s side, there is a definite downside to the insurer’s recalcitrance. If the insurer pushes the “NO” button, even on an open and shut claim, when the policyholder wins, the policyholder still loses because the attorney fees and legal costs, which must be paid by the policyholder, substantially reduce the net value of the judgment won.

When an industry uses the American Rule as a defensive tactic to impair the rights of policyholders who have been paying premiums for years, it is time the Rule is held not to apply to insurance companies.

If insurers decide to dispute a claim, they are much less likely to do so when the claimant is likely to prevail, if they are required to pay attorney fees and costs when they lose. Such a rule would give them pause in many cases in which they have no real defense , but defend anyway to see if they can discourage the claimant and because they have nothing to lose. The entire burden of such defense is put on the insured.

Effectively, contrary to the very idea of insurance itself, this Rule allows the insurer to shift a substantial (and in many cases, crippling) part of the risk of loss back to the insured, even though the insurer has been collecting premiums for years, to assume the entire risk.

With nothing to lose, insurance companies use denials without fear (and, in many cases, without conscience) all to the detriment of the policy buying public.

This injustice should end now.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

A recent article in the NY Times decried the fact that doctors receive little or no training in treating older patients even as more and more of the population attains advanced age.

Pointing out that 80-year-olds do not always have the same symptoms nor require the same treatment protocols as 50-year-olds, Dr. Roseanne M. Leipzig blamed the lack of knowledge on the startling fact that medical schools do not require training in geriatric medicine.

With more people going into long term care, there is a pressing need for clinical training in geriatrics. According to Dr. Leipzig, patients 65 and older account for 48% of all inpatient hospital days and yet few medical schools offer training in elder care.

The doctor suggests, and we agree, that Medicare, which contributes more than $8 billion a year to support medical residency training, require that part of that residency training focus on the unique health care needs of older persons.

Long term care insurance companies should join in the effort to offer this elder care training which would lead to better medical results and give older people the ability to live on their own longer.

Wider geriatric knowledge in the medical profession would mean better insight to the needs and treatment of older people. This better insight would mean fewer of these people needing long term care facilities.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

A former PR exec for insurance companies told it like it is last week when he told a Senate subcommittee, in essence, “Don’t trust insurers”.

Wendell Potter, a former Cigna vice-president, testified that health insurance companies have a policy of trying to avoid paying benefits to their policyholders, use deliberately incomprehensible documents to mislead consumers and sell “junk” policies that do not cover needed care.

Potter declared that insurers make paperwork confusing because they realize that people will simple give up and not pursue a claim if they think it is difficult to do so.

Potter’s revelations reinforce our previous warning in this blog to claimants and potential claimants that disability income insurance companies rely on many a person’s visceral dislike for conflict to save insurers untold millions on claims they should pay, because they know people just give up on them. (See “Docility” below).

We cannot stress too forcefully that giving up should not be an option for a health claimant facing economic hardship. The insurance companies have a policy of making benefits collection a hard road. Claimants have to make up their minds to take the ride or suffer the consequences on top of their illness or injury.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

If an adjustor or other agent of your disability income insurer wants to talk with you as a claimant, talk. But, there is no way you should invite the agent into your home or office. Meet the agent at your lawyer’s office with your lawyer present.

By the very nature of the insurer-claimant relationship, it is obvious the insurer is not your friend. Therefore, neither is the insurer’s employee, the adjustor.

An adjustor may try to charm you into a “convenient” visit to your home just to get “your view” of your claim. Don’t fall for this line. The adjustor works for the insurance company which is trying its “darndest” to reject your claim or at least find some reason for reducing it.

Why host a meeting at your home or office which will give your adversary a leg up on how you live, what you own and how tough an adversary you are likely to be? Also, acting as a “host” you are less likely to carefully scrutinize the statement that the adjustor is likely to write as you talk and ask you to sign.

If the adjustor wants to talk, your policy requires you to cooperate and talk. But, the time and place of the discussion has to be mutually agreed upon.

The best place for such a meeting is your lawyer’s office with your lawyer acting as host.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Because a disability income insurance claim requires you and your physician(s) not only to describe the medical (or psychological) nature of your disability but also why the disability makes it impossible for you to perform your occupational duties, any error or uncertainty is guaranteed to be seized upon by the insurer and used to attack your right to benefits.

Why is it of vitally more importance for a claimant to have good, knowledgeable advice about how to file a disability claim before filing a claim, than it is in filing a claim in just about any other field of insurance? An expert should help you understand the details required to file a DI claim in an accurate, responsible manner, with the proper supporting documents in proper form so that the insurance company will have no technical excuse for rejecting the claim or demanding more information from you before reviewing your claim.

This is particularly so if your claim is covered by the ERISA statute. Giving your insurer the least little edge at the time of filing your notice, provides the insurer with a big leg up in resisting benefits payments to you. This is because the ERISA statute provides the insurer with the first opportunity to declare whether, in its opinion, your claim is valid or invalid. More on ERISA.

It’s the same as with anything else. The party starting off with a decision in its favor has the advantage in that the other party -- in this case you -- has the burden of proof to show that the original decision is faulty. Sometimes when trying to do this, you are forced to rely heavily on the papers and reports you supplied in making the claim and if these documents are in error or are incomplete, they can hurt you in trying tomeet this burden of proof.

While on the subject of filing a claim, an important part of this area is the type of medical and occupational reports which are furnished to the insurer on your behalf. Medical experts are very important to presentation of your disability income claim as the entire basis of your position is that your illness or injury prevents you from attending to your occupation or, perhaps, any occupation.

So, the first thing is to be hopefully treated and examined by a doctor who is fully familiar with and experienced in your disability. However, no matter how skilled and knowledgeable a physician is, it does your insurance claim no good if the doctor can’t or won’t properly communicate the details of your true condition and the nature of your restrictions and limitations to the disability insurer.

So, while you are being treated it behooves you to express clearly to your physician that you expect to make a claim under a disability income policy. You may also explain that since you are disabled and can’t work, under the terms of your policy your future depends on the doctor providing the insurer accurate and complete reports on your condition.

Request that the doctor personally attend to any reports required on your behalf and that the reports be as complete and thorough as possible in describing your condition.

Try to impress upon your treating professionals how much your future wellbeing depends on the outcome of your disability claim and how you would appreciate their full and complete attention to your reports.

After all, just as in treating your injury or illness, the doctor’s knowledge and attention to detail in reporting your true condition determines your future.
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Federal judges are quickly wising up to the tricks of the trade used by insurance companies to deny disability income claims. The penchant of many insurance company medical examiners to disregard valid first-hand evidence of disability, while themselves relying on medical reports and other “long-distance” diagnoses in making decisions, is receiving less and less support from the courts.
 

One trick the courts seem to really have caught onto is the Social Security Disability “scam”. While flooding Social Security with practically every group long term disability claim on their books, insurers consistently disregard the Social Security findings of disability whenever it suits them.
 

The way it works is that the insurance company will force a disabled group policyholder to file for SSDI benefits with the Social Security Administration by threatening to cut off their disability benefits if they don’t. The insurer will even supply an attorney to handle the claim for its policyholder. Seems like a generous move, eh?
 

Not so. If the SSDI claim is successful, the insurance company gets to deduct the amount of the SSDI payments from the claimant’s insurance company benefit payments, a definite plus for the insurer. But, does this affect how the insurance company looks at the claimant’s benefits claim? In a great many cases, not at all!

In reviewing and deciding disability under the terms of its own policy, companies many times pay little or no attention whatsoever to the SSDI decision (while accepting the benefits of reducing their claims payments). In other words, they are saying, “We’ll accept the SSDI judgment that the claimant is disabled (and take the money), but not when we have to decide if the claimant is disabled under the terms of our policy”.
 

However, since the decision in Metropolitan Life Insurance Company, et al v. Glenn, 128 S. Ct. 2343 (2008), recognizing the inherent conflict of interest when an administrator who makes the decision in a  disability case is the same entity which would have to pay the claim, courts are more and more giving weight to the SSDI decision in determining whether an insurance company refusal of disability benefits was proper.
 

Insurance companies have had their cake and ate it for far too long. It’s time disabled policyholders get their fair share.
 

For recent decisions on this issue:
 

          Barteau v. Prudential Insurance Co.,2009 WL 1505193 (C.D.,Cal.) 

         MacNally v. LINA, 2009 WL 1458275 (D.Minn.)
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Taking the first step in filing a claim for disability income benefits is not nearly the same as filing a claim for an auto accident, which is how many of us have our first claims experience with insurance companies. In fact, it is so different that an unintentional mistake in this first step can bring your whole hope of obtaining a benefit to a crashing halt, never to be resurrected.

In filing auto insurance claims, one usually gets the police report to open the claim and then follows with medical reports detailing the injury as a follow up. This procedure is usually enough to have the insurer either deny the claim or start to negotiate a settlement with you.

Not so with disability income insurance claims. With these claims there is an added factor – not only must you show you were you incapacitated to some degree by accident or illness, but you must also show that the incapacity prevented you from performing your work, either your usual occupation or any occupation, depending on the terms of your policy.

What makes this first step so vital is that disability carriers have large staffs of trained, experienced people going over disability income claims with a fine-toothed comb looking for any omission or inconsistency in the claim submission. It may be that your doctor’s report was too general in describing your disabling condition or that your description of your occupational duties omitted a key element or mistakenly described one of its functions. Without experience in filing such claims you would have no way of knowing you were making such an error.

If your disability income claim contains an error or omission, it will haunt you throughout your upcoming battle for proper benefits. At any administrative or judicial hearing, the insurance company will continually bring up the “warts” on your initial claim form to try to impeach your claim, no matter how you amend it to conform to what is required.

At the very least, the insurer will use the inadequacies of the initial claim to delay paying whatever monies may be due you.

The best defense against this insurance company defense tactic is to file a complete, accurate initial claim form.

Save yourself loads of headache – get it right from the get-go.


 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

With financial earnings in the dumps and prospects for an early recovery dim, insurance companies with disability income and other long-term payouts on their books are on the prowl for claimants who need cash NOW!

Disability insurers know that many of their beneficiaries are having trouble making mortgage payments, meeting college tuitions or just plain paying their bills in this severe economic turndown.

With long term disability beneficiaries in a stressed and highly vulnerable mode, having lost a good part of their incomes and retirement packages in the stock market meltdown, what better time to dangle a relatively large lump sum of cash in front of the insured?

Policy and settlement buyouts are complex issues and broad experience in successfully negotiating such deals is critical. Insurers like nothing better than dealing with a novice in buyout negotiations, especially if the novice needs the money and allows personal involvement determine the outcome.

How tempting for a beneficiary to grab a lump sum now and not worry about the long term consequences.

Issues which must be carefully considered for the beneficiary are:
 

* Understanding the true value of the claim.
* Family circumstances and needs.
* Are there other investments or incomes (i.e., annuities? pensions? SSDI?) which will replace the settled-away insurance benefits for the family?
* In view of the nature of the disability, what is the likelihood of the beneficiary living to the end of the benefit term? These benefits usually end at death.
* In view of the nature of the disability, what is the likelihood of the beneficiary recovering the ability to resume work before the end of the benefit period? Ability to resume occupation as described in the policy would terminate DI benefit payments.

To try to answer some of these thorny questions, a knowledgeable, experienced, not-personally-involved, adviser in the beneficiary’s corner is a must.


 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

We recently handled an insurance case which required us to do heavy research on the meaning of the word “accident”.

There are tons of insurance cases out there that hinge on the meaning of “accident” in all types of insurance policies issued by all kinds of insurance companies and in all jurisdictions.

What struck us was the fact that all of the insurance policies involved, which generally try to define every meaningful word in them to the nth degree, never try to define the word “accident” in their policy language. Is this an “accidental” oversight or is this failure to define deliberate so that insurance companies would have an open door to contest any claim based on an accidental happening?

This failure to define is not an insurance industry oversight. Insurance companies wouldn’t leave such a gaping hole in their policy language unless the hole was one which was advantageous to the insurers.

The companies use the nebulous word “accident” to enable themselves to mount and maintain a legal defense in a court of law. This immediately puts the claimant on the defensive. It means that the claimant is looking at much heavier legal fees and costs (if the claimant can even afford them) and a much longer period of time before any benefits are forthcoming.

Add to this the claimant “Docility Factor” (see post April 29, 2009, below) and it is easy to see that failing to define “accident” in policy language leaves a gaping hole which becomes a graveyard for many a claim.

Undefined “accident” is no accident.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Most plaintiffs’ disability income insurance lawyers are aware of the heightened emotional and psychological needs of their clients – up to a point. Our Kathleen takes up whatever slack our clients miss in the way we communicate with them.

Although attorneys in the disability field know that their clients are usually in pain, economically behind the 8-ball and aching for some one to talk to them about all aspects of their case, attorneys are not always able to spend all of the time on the phone some clients think they require.

That’s where Our Kathleen comes in. She is a paralegal who is knowledgeable about the factual requirements of properly pursuing a disability income claim. But more than that, she seems to have a natural empathy about the human needs of the people filing such claims. And, she makes the time to talk to clients and prospective clients who call our office and need a “listener” who cares, shares and wants to help.

Every attorney in plaintiffs’ disability insurance work would do well to make sure they have an “Our Kathleen” on staff to alleviate some of the stress their clients are feeling as they pursue their claim under the most trying circumstances.

That’s if you can find another Kathleen.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

It was brought to our attention by a reader of an April 17 blog entry about ERISA discretionary clauses that there is a need in the disability insurance business for an easy way for people having business with state insurance regulators to have access to names, addresses, phone numbers, email addresses, etc.

This information is necessary not only to people who have complaints or suggestions for the insurance regulator in their state, but also for insurance agents and brokers for remote licensing and for attorneys who may have business or questions for the regulator.

As a service to claimants, lawyers, insurance agents and brokers we have established on the firm web site, a handy address book for all 50 states giving the pertinent information concisely.

Knowing that the information in this address book is a fluid entity, we will have the information in the address book updated periodically so that the data is not stale. We also intend to update the address book with specific addresses and phone numbers for licensing, etc. if the need arises.

So, hoping it is helpful, we offer state insurance regulators.



 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Today’s high-speed world seems tailor made for centralized, quick-as-a-flash oversight which can keep pace with the latest trends in finances. That’s the basis for a strong push in Washington to take supervision of insurance products away from the states and hand it over to a Federal agency, the same system which was watching while the financial system crashed.

WHOA!  Not so fast. The one area of the financial world which did not go into a tailspin in the past year is the insurance industry which is generally governed by those slow-moving, conservative state insurance regulators. Three cheers for slow-moving and conservative.

Why? Because insurance companies must abide by rules set down by the 50 state regulators and these regulators were not “sophisticated” enough to jump on the free-wheeling, anything goes financial bandwagon of recent years. This saved insurers from the money meltdown and safeguarded policyholders during the current crisis.

One may point to AIG, a major insurance company, which owes the Government more than $175 billion, and say “How come?” The answer is that AIG got into a financial products operation which is the part of the company which is in deep trouble. The insurance part of the business is on a relatively even keel.

So, why race to go Federal when the states seem to have saved the day for the nation’s policyholders? In today’s rush-rush world a little time to think about consequences is needed so that the herd doesn’t stampede towards a cliff.

Remember the fable about the tortoise and the hare!

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Ever wonder why insurance companies pursue a policy of turning down apparently valid claims out of hand? I have and the only thing I can figure is that they are relying on the “docility” factor. They have found through experience that a substantial number of people will accept a turndown, right or wrong, and do nothing further about it.

One would expect an insurance company to have a tendency to say “no” when asked to pay a claim. That is not what is surprising. What is surprising is that they say “no” in cases where they know they are likely to have to pay. This is because when they say “no”, there are a slew of additional costs in defending a claim which they know they are likely to have to pay anyway.

Why they do this is a mystery which seems to have one likely solution – they do it because it saves the insurers money.

The one thing you can bet on with certainty is that insurance companies can mathematically calculate the probability of any financial result they face. They know how much the legal, medical, court, and internal costs of litigating a claim will likely be.  And, they know these costs are substantial. So, why do they do it?

They do it because they have also calculated the “docility” factor – the chance that a valid claimant will not challenge a denial of a claim for a variety of reasons. Nobody but the insurance companies know the percentage of valid, but denied, claims which are never pushed to a conclusion, but even if the number is between 10% and 20%, the savings turn out to be a big windfall for the insurance companies.

Some of the reasons people may not fight for their rights are innate - they hate conflict and controversy. Other reasons (excuses) are:
 

• "You can't fight City Hall", i.e.,insurance companies are too big and powerful ever to be challenged by an individual.
• They find it difficult to cope with stress.
• They believe the insurance company acted fairly and made an unprejudiced decision.
• They won’t take the risk of spending money on fees without a guarantee they will win.
• They have an aversion to getting involved with a lawyer (I wonder if insurance companies have been fostering all of those “shark” jokes about lawyers). The vast majority of lawyers don’t bite, no matter what the jokes lead you to believe. If they are retained by you, lawyers work for you and only for you and your claim.

There is a whole host of reasons (maybe excuses) why a goodly number of people will not take on an insurance company. And, in that goodly number of people lies a treasure for insurers.

This is particularly so in disability income and long term care insurance claims. The payments for these types of claims can go on for decades and cost millions of dollars. Evading payment on 10% or 20% of these types of claims comes to a hefty amount of money saved for the insurance companies. And, since insurers do this consistently, one has to believe that they know that the “docility” savings more than offset what they spend to defend claims they know they will have to pay – if the claimants undertake and follow through on the job of properly pursuing the claim.

Advice to the leery claimant: Before you become one of the “docility” herd, have a competent insurance attorney evaluate your claim and advise you on if and how to challenge a denied claim.

Only then is it fair to yourself to decide whether or not to pursue you claim.
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The easier things become, the harder some people make them. Wouldn’t you think that when medical science advances so that a patient can swallow a pill and replace chemotherapy with all the expense and trouble it involves, it would make the treatment process simpler? Wrong!

As President Obama said recently, insurance payment protocols, like the ship of state, are humongous, and can’t be changed quickly. Pill treatment, which would seem a no-brainer since it will lead to less medical and hospital costs for patients and therefore insurance companies, should be received with open arms by insurers. Not so.

As reported in the New York Times recently, insurance companies seem to be hung up on the issue of how to classify pill treatment. Drugs which are administered at a clinic or hospital are usually treated as a medical benefit. Prescription drug plans cover pills and normally require copayments which are sometimes substantial.

With all of the talk about how Social Security and Medicare are going broke, why don’t the insurers or the government jump on this opportunity to save big dollars on cancer drug treatment?

Some one in authority should do a fast analysis of what it costs to go to a place, have a trained medical person administer an infusion, have a doctor on premises, pay for the chemicals, the rent, equipment and personnel, and compare it to the cost of the pill medication. It seems obvious that the lesser cost would be the pill even omitting the patient’s loss of time and transportation costs.

The State of Oregon, according to the Times, is the only state so far to deal with the situation. It 2007, Oregon passed a law requiring insurers to reimburse oral and intravenous chemotherapy drugs equally. Other states, including Colorado, Hawaii, Minnesota, Montana, Oklahoma and Washington are in the process of passing similar legislation.

I’m thinking a lot more states ought to be joining the parade – and ASAP.
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Do 27 years of legal battle give a foot soldier the right to offer his opinion to the world on how to run a war? I obviously think so, because here I am going out front of the world with my thoughts and ideas on ERISA, other health insurance claims and whatever else occurs to me. 

My hope is that at least one person who reads here will benefit.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link