Arlene Hull, a 90-year-old Montana woman, has won a lawsuit against an insurance company that refused to pay her nursing home bills and now must pony up millions.
Although a state law that caps punitive damage payouts and the probability of an appeal mean Hull could get $12.3 million at most, her victory still strikes a blow on behalf of anyone who's ever been denied by an insurance company despite paying premiums for years.
Hull and her late husband purchased a long-term-care insurance plan in 1997 that was supposed to cover their medical and living expenses during the final years of their lives. After paying premiums for a decade, Hull's health declined and she was diagnosed with Alzheimer's disease five years ago. She moved into an assisted-living facility in 2008.
Ability Insurance, which changed names several times during the years Hull paid premiums, cut her off two years later, the Billings Gazette reported. Although the company agreed to resume her benefits last year, it refused to pay the bills from the time during which it wouldn't cover her. The Montana jury decided the insurance company had breached its contract with Hull.
The health care reform law enacted two years ago forbids health insurance companies from kicking people off their plans once they get sick, a practice known as "recission." But that regulation doesn't apply to long-term-care insurance companies, which aren't health plans.
People purchase long-term-care insurance as a supplement to Medicare or retiree health benefits that cover major medical expenses. Long-term-care insurance is intended for types of expenses, such as home visitation by health care professionals or home aides or for institutional care in a nursing home or other facility, that health insurance may not cover.
Clarification: The timing of Hull's declining health and its consequences, and the insurance company's termination of coverage, have been edited for clarity.