The Safety Net She Believed In Was Pulled Away When She Fell

[UpInArms]

http://news.yahoo.com/news?tmpl=story&cid=2026&e=7&u=/latimests/20050821/ts_latimes/thesafetynetshebelievedinwaspulledawaywhenshefell

Until a few years ago, Debra Potter made sure that her family could cruise the Caribbean, watch the NFL on big-screen TV and keep her elderly mother and in-laws at home in comfort.

She did so by earning $250,000 a year selling more insurance than almost anybody else in the state of Virginia, virtually all of it disability and health policies that she thought put a safety net under middle-class and affluent families such as her own.

Potter so believed in the protection she was providing that she made sure she was covered under a policy her employer, Southeastern financial services giant BB&T, had with UnumProvident Corp., the nation's largest disability insurer.

But when Potter began falling down in 2002 and was subsequently diagnosed with multiple sclerosis, she discovered that the protection didn't work anything like she'd expected.

snip

"People who file disability claims today are worse off than they were two or three decades ago," said Judge William M. Acker Jr., who was appointed to the U.S. District Court in Alabama by President Reagan. "The law that was supposed to protect them has been turned on its head; the chief beneficiaries are now the insurance companies," said Acker, who has presided over a variety of disability insurance cases and has written extensively on the subject.

...more...

[Duer 157099]

1. OUCH. It's painful to read

because I have personal experience, nearly identical to this story. And I know of hundreds more with the SAME story.

The kicker part is this:

"But over the last 25 years, the Supreme Court has read the "relate to" provision so broadly that claimants who believe they have been wrongly denied benefits are rarely able to sue for punitive damages under state bad-faith or fraud laws.

"The court has said the most that claimants generally can win by suing in federal court is the original benefits due them, no matter how long their wait or, often, how steep their legal fees."

This means there is NO CONSEQUENCE for them denying claims. NONE. Worst case for them is they pay what they would have had to anyway. And the claimant gets a fraction of what they would have (must pay attorney fees). Who wins? Insurance companies and attornies. Period.

[BrklynLiberal]

2. Thanks very much for this post. It was an important article. I have

sent it to everyone on my email list.

[UpInArms]

5. the insurance corporations are just scamming the public

from further in the article

When Deskins fell ill in 2002 — like Potter, with multiple sclerosis — administrators for her employer's disability insurance plan apparently were so convinced that she would never work again that they assigned a specialist to help convince Social Security that she met the government's stringent standard for federal disability payments, which requires that applicants be unable to function in any occupation.

Disability insurers have a huge financial interest in getting people who are seeking benefits from them onto the Social Security rolls. In effect, these insurers have come up with ways to shift much of the risk of having to cover ill and injured workers from themselves to Washington even as they continue collecting premiums.

Most disability contracts require claimants to apply for Social Security as a condition of receiving benefits under their employer-provided plan. In cases where claimants finally win Social Security benefits, the contracts give insurers the right to offset what they owe by the amount the government pays.

In fact, merely having people apply — even if their applications for government benefits ultimately are rejected — helps insurers by reducing what they have to set aside as reserves to ensure that they can pay what they owe. Documents show that in some instances insurers can reduce these reserves by as much as 30%.

[OzarkDem]

3. Interesting and worrisome

Insurance companies are finding more and more ways to protect their bottom lines at consumers expense. There's a great deal being pushed through Congress and state legislators that undermines people's rights, but no one knows its going on.

Another example is regs being pushed by the GOP for "new and flexible" types of health insurance plans (example Assocation Health Plans or AHP's) that strip out most of the regulations governing what health insurance companies are required to cover. These are being touted through glitzy marketing strategies to the news media as "innovative plans" to "help small businesses" but are nothing more than a cover to strip rights from consumers.

It sickens me that the news media would rather waste our time reporting on "news porn" and the pervert of the week instead of reporting on these issues.

On edit: I'm sending a copy to my legislators, state and Congressional.

[pop goes the weasel]

4. no freaking duh

This is what comes of Americans thinking they one of the 1% richest, or on their way to joining them, instead of relating to the poorest 20%. This is what comes of Americans thinking that disabled people are pulling some sort of scam, what with those great parking spaces and Social Security disability payments of $600/mo. This is what comes of Americans thinking that profit-driven corporations should be trusted with citizenship and real humans be downgraded to consumers.

[havocmom]

6. My sister too- good job, best insurance, now having to deal with SS

disability before her insurance company will accept her permanant disabillity claim. They will deduct what she gets from SS from the benefit she THOUGHT she was paying for over 2 decades. She bought the best disability insurance so she wouldn't have to rely on SS, and she is devestated to find the system she believed in and worked for is just a racket.

Anybody who thinks they are OK because they have insurance coverage is in for a very nasty lesson in the school of hard knocks. The insuance companies have no intention of living up to the promises they make when they take your premium payments to play on Wall Street.

And the malAdministration wants younger workers to let them invest payroll taxes in the same Wall Street pyramid scheme.

Face it, America the corporations and ultra rich want a return to a feudal system where we pay and they play. Getting there faster than the middle class thought would happen.

[OzarkDem]

7. What excuse did they use?

For refusing her claim?

I've seen similar experiences lately with health insurers refusing claims based on pre-existing conditions when they don't have a valid argument. I can only assume they're doing it just to delay covering medical costs as long as possible.

[Duer 157099]

8. They delay because they can

Under ERISA (which, I believe, applies to *any* benefit purchased for you by your employer) punative damages cannot be sought -- that's the whole basis for this travesty.

And people, educate yourselves about this NOW, and don't rely on the thinking that either 1) it won't happen to me or 2) I'll deal with it IF and WHEN it happens. Forewarned is forearmed. Trust me on this one.

Spread this word wide and far, please.

[havocmom]

10. Yep, they play delay game. She had cancer. They probably figure

she will get it again and die while they drag their feet. She got the policy so she wouldn't have to 'take welfare'. She was running a large company and made good money. She felt like she was taking care of herself and now she finds out she has no value to society since her buying power is not what it had been. Now she finds herself treated just like she was as a poor kid growing up on the wrong side of the tracks. It is a very bitter pill. Though free of cancer now, I know many people get it within 5 years of a major life trauma. This is certainly increasing the risk for my sister.

Very difficult for people to find out everything they were told about working hard and making financial arrangements for their later years was all lies to get them to buy into the corporate system and make $$ for them. Like legions of loyal workers, they find out they are just debris when it is supposed to be payday.

[havocmom]

11. They are just stalling, making her jump through ever-changing hoops,

and proving that the promises they made when selling the policy, like you never have to worry about $$, you just work on getting better... were lies. They make her constantly fill forms, gather records, get more sworn statements from doctors, so on... They wear people down, just like the tobacco industry did when they were sued.

It is robbery to take money for policies sold with false promises. But they buy the politcians to change laws and what they want suddenly becomes legal.

[China_cat]

9. Check your policies

you'll find in very small print "valid only until needed".

[spinbaby]

12. A bump for a great article

No wonder the middle class feels so insecure.

[CheshireCat]

13. bump

too important to skip

[tibbir]

14. I've been receiving Mass Mutual disability since 1995 (private policy)

They did have me qualify for SS-D (after they'd started paying me), but they paid the attorney so I got all the SS back pay. Luckily my policy doesn't have any sort of exclusion for psychological because my disability is bipolar disorder.

I've been damned lucky. I just didn't realize how lucky I was until I read this article.

Wow.