Long Term Care Essay

Case Analysis: Fallow vs. Bankers Life and Casualty Company

Overview Bankers Life and Casualty sold a long term care policy to Katherine Fallow in 2002. In 2009 Bankers Life and Casualty notified Fallow that she was eligible to receive long-term care benefits. Fallow began receiving home-care from licensed or certified home health care workers in the same year. Initially Bankers Life and Casualty paid the claims for home-care workers for Fallow. In December of 2009, during a routine benefit check, a Bankers Life specialist determined that the caregiver at Fallow’s home did not qualify as a “qualified home health care provider” and ceased reimbursing Fallow for her claims. (leagle.com) Leagle.com goes on to say: The Policy covered long-term care expenses, including regular visits by a "Home Health Aide," defined in the Policy as "a licensed or certified home health care worker, other than a Physician, nurse or professional therapist, who performs Personal Care Services." The Policy further required that the Home Health Aide be either part of a Home Health Care Agency, or be an independent "Qualified Home Health Care Provider." The Policy defined "Qualified Home Health Care Provider" as "an individual or organization licensed or certified to prove home health care services."
Fallows died in July of 2011. Shortly before her death Fallows filed an action for breach of contract, bad faith and fraud. In July of 2013 the courts ordered Bankers Life and Casualty Company to pay the unpaid claims to the estate of Katherine Fallow. In September of 2013 the court also awarded legal fees to Fallow’s estate. “The court sided with Fallows on the breach of contract claim but did not find Bankers engaged in bad faith or fraud.” (oregonlive.com)
A class action suit has since been filed in the state of Oregon (among other states) against Bankers Life & Casualty alleging elder abuse. (lawyersandsettlements.com)

Legal Analysis
There is simply no doubt that Bankers Life & Casualty breached the contract with Fallows. Fallows purchased the long-term care contract for the exact benefit that was withheld from her. The long-term care policy was a conditional contract that became enforceable when Fallows qualified for long term care by not being able to perform the necessary activities of daily living. The condition precedent or express conditions were triggered when Fallows could not perform the activities of daily living. Fallows honored the concurrent condition of the contract by paying her premiums as they became due prior to going on claim (at which point they ceased). Bankers Life did not provide substantial or complete performance under the contract.
There was no relief for Bankers through an Alteration of the Contract, Impossibility of Performance or Commercial Impracticability. (Kubasek, p. 256). In addition to receiving reimbursement of medical claims and attorneys fees the plaintiff should have received punitive damages. The idea that an aging population is encouraged by the financial and insurance industry to purchase a product that will financially aid them during an emotionally, physically and financially vulnerable time in their lives only for those policyholders to find themselves in a position of fighting to secure those benefits is reprehensible.

Relevance to Business Environment
Insurance companies began selling long-term care insurance over 30 years ago. Two of the most popular long-term care insurers are GenWorth and John Hancock. Recently John Hancock increased their premiums 40% for a specific band of policyholders. I know this because of family members who have John Hancock long-term care policies. I am also aware of at least two premium increases for existing GenWorth policyholders. Met Life was a third well known participant in the long-term care industry. In 2010 MetLife announced they would discontinue writing long-term care policies. They continue to service

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