Long-Term Healthcare Plan Denied for Care in Assisted Living Facilities

Marie Gardiner purchased a long-term care policy from insurance company giant CNA in 1993.  The idea was to have security in knowing that in the event of her need for a nursing home or an assisted living facility to take care of her, she would have this policy in place.  Gardiner unfortunately broke her hip in 2008 and moved into The Village at Buckland Court (Village).  She then filed a claim with CNA, and it was approved.  When her health improved, CNA terminated the coverage for the claim in 2011 advising Gardiner that if her “care needs change or increase in the future,” the company would review her policy.

In 2012, Gardiner fell down a flight of stairs and fractured her sacrum.  She reapplied for benefits at CNA under the long-term healthcare policy.  CNA denied her claim, noting that the Village was “not a qualified provider.”

In the lawsuit Gardiner filed against CNA, she stated that a company representative denied her claim because a nurse was not on the premises at all times and because the Village was a “managed residential community,” not a licensed assisted living services agency.

Before the lawsuit was filed, Gardiner protested to CNA that a previous class action settlement terms already allowed her claim.  (Pavlov v. Continental Ins Co., No. 07-02580, Doc. 107 (N.D. Ohio Oct. 7, 2009).  In the Pavlov case, the plaintiffs there argued that Continental Casualty Co., the underwriter for CNA, refused to pay long-term health insurance claims because policyholders were being treated in facilities outside the insurance contract.  In the Gardiner case, she argued that the Village did have a nurse on call at all times, which was consistent with state licensing requirements and the Pavlov settlement.  But CNA persisted in denying her claim.

CNA had previously covered assisted living facilities in its policies.  But the lawyer for Gardiner, Sean Collins, argued that CNA is avoiding long-term facility obligations to policyholders and exploiting state licensing requirements as a scheme to escape claim liability.

Because the population generally is growing older and the need for long-term care is more prevalent, CNA’s strategy is to maneuver as much as it can to avoid paying these high costs even though the insured has paid the premiums for so long.  When long-term care insurers started underwriting these policies in the early 1990s, the company’s profit margins were high.  CNA takes the position that its policies are redefined to include coverage only for stays at nursing homes, excluding assisted living facilities.

CNA continues to use this strategy to avoid paying for its insureds’ long-term care policies by relying on this licensing loop hole.  It may be doing this same tactic in other states.

Gardiner v. CNA Fin. Corp., No. 3: 13-cv-01918-JBA (D.Conn. filed Dec. 27, 2013).

Kreisman Law Offices has been successfully handling nursing home abuse cases, assisted living injury cases and long-term healthcare injury cases for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of another for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Chicago Heights, Lansing, South Holland, Homewood, Olympia Fields, Country Club Hills, Tinley Park, Frankfort, Palos Heights, Alsip, Oak Lawn, Evergreen Park, Chicago (Avalon Park, Calumet Heights, South Deering, Pullman), Bridgeview, Summit, Countryside and Hinsdale, Ill.

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