In 2017, Mutual of Omaha, one of the nation’s largest insurers, apparently concluded that Daynard and Hogan were healthy enough to be insured. Each purchased a policy for a combined annual premium of approximately $3,700.
At the time, Daynard was 59 and Hogan 61. Under the policies, the company could not simply abandon them as they aged and their health became more precarious. They were locked up.
But earlier this year, Daynard made a big mistake. She missed a quarterly payment. She told me she always pays by check after the bill arrives. But she and Hogan were traveling a lot at the time and she lost track of the bill. Still, it was her responsibility and she blew it.
“I dropped the ball,” she said. “Highligths.”
But Mutual of Omaha didn’t just impose hefty late fees, like a credit card company would. He ended their coverage, but said the couple could seek reinstatement.
However, the reinstatement review would require Daynard and Hogan to submit their most recent medical records. Daynard, now 65, and Hogan, 67, are in relatively good health. There certainly haven’t been any big changes in their health since they were first approved.
Daynard submitted the couple’s medical records as instructed, but was shocked when the two were quickly dismissed – Daynard due to ‘memory changes’ she was supposedly undergoing, and Hogan due to an ‘illness’. kidney disease”, although he does not have such a condition.
“We were stunned,” Daynard told me. “I don’t have any memory problems and Peter certainly doesn’t have chronic kidney disease. It was totally wrong. »
The loss of their coverage would have serious financial consequences for the couple, both retired teachers. At their age, buying new policies would cost more, compared to their current policies, in which they had already paid nearly $20,000 in premiums.
In recent years, billions of dollars in losses have plunged the long-term care insurance industry into financial crisis, prompting some of the largest insurers to stop underwriting individual policies.
The couple told Mutual of Omaha they seemed to be “looking for any excuse” to cancel their coverage. They implored the company to overturn its denial of reinstatement, but that appeal was also denied.
Daynard then contacted me, asking for help. She shared voluminous medical records and correspondence with the insurer with me.
I wrote on behalf of the couple to the insurer: “It seems to me [Mutual of Omaha] canceled both policies [without] evidence of actual medical condition, relying instead on a few words in their medical records, words that Daynard and Hogan seem to have adequately demonstrated do not indicate any actual medical condition.
It’s true that a summary of a medical exam Hogan underwent earlier this year lists “chronic kidney disease,” but it’s listed as “issue resolved.”
And a letter from Hogan’s nurse practitioner at Newton-Wellesley Hospital to the insurer seems to clearly refute any notion of chronic disease: “My medical opinion is that Peter Hogan does not have chronic kidney disease. He had a transient change in kidney function that resolved on its own. It does not reflect a chronic illness.
Hogan also provided a copy of a letter he received from his doctor. This letter was written a week after a routine urine test showed an elevated level in a category related to her kidney. The doctor had ordered a second test and the letter provided the results: “I am pleased to report that your kidney function has returned to normal and your urinalysis is normal. No other action is necessary, but stay well hydrated.
Hogan told Mutual of Omaha that the previous high level was due, according to his doctor, to “dehydration on the day of the test.”
The company also cited Hogan’s “current physical therapy” in its denial. But that seems even more questionable than his chronic kidney disease quote. Hogan had reported shoulder pain during a medical visit and got a referral for physical therapy. But that didn’t work.
“His arm pain was minor and self-resolving and did not reflect a chronic medical condition,” the nurse practitioner wrote to Mutual of Omaha. Hogan had no physical therapy.
The company appeared to change its rationale for denying Hogan’s reinstatement in its final disclosure: “A new onset of kidney disease or kidney failure requires a period of stability before it is considered to ensure there is no has more progress. Our underwriting guidelines required at least 12 months of stable kidney function before being considered.
For his part, Daynard admits that the “memory changes” are listed in a five-page summary of his annual medical exam in 2021, which Mutual of Omaha cited as the reason for dropping its policy.
But the first reference to “memory changes” is under “medical history” and not listed under “active problems.” The second mention is grouped with other possible “neurological” problems – headaches, loss of balance, dizziness – all of which were listed as non-existent. The third is listed with other possible issues, such as asthma and back pain, seemingly listed as part of a harmless checklist, and is followed by the words “not progressive.”
Daynard told me that the only time she may have started a conversation with a medical professional about anything close to memory issues was when she was treated for breast cancer by chemotherapy 21 years ago. Once introduced decades ago, such a description has apparently been carried over into her medical history, she said.
“I may have complained that I felt ‘hazy’ after an infusion [of chemotherapy]but it was entirely transitory,” she wrote to Mutual of Omaha.
It was apparently not convincing enough for the company. In the letter rejecting Daynard’s appeal for reinstatement, the insurer wrote, “Notes of cognitive issues found in medical records represent an uninsurable risk to our long-term care product.”
“Based on our claims data, cognitive issues are the primary reason for claim frequency and duration,” the letter continues. “The notation in your medical records of ‘memory changes’, even if labeled as non-progressive, exceeds our risk tolerance.”
In other words, Mutual of Omaha pays more claims for dementia than for any other type.
Mutual of Omaha obviously has the right to look after its financial interests. It’s in business to make a profit. And the fine print of his contracts with Daynard and Hogan no doubt give him plenty of leeway to dump policyholders for various causes.
But is one faulty urine test enough to drop a policy? Is any mention of “memory changes”, in any context, sufficient to deny reinstatement? I do not think so.
After sending detailed questions to Mutual of Omaha, one of its executives contacted Daynard. He said he would reinstate Daynard and Hogan, though he didn’t take responsibility for what the company did (and didn’t do).
I’m not sure a reinstatement offer would have happened without my involvement. When will big insurers and the like really listen to ordinary people?
I have a problem? Send your consumer concern to email@example.com. Follow him on Twitter @spmurphyboston.
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