September 21, 2021

Your Money: Fine Print and Red Tape in Long-Term Care Policies

But some family members are shouldering another type of burden: one that involves piles of paperwork and repeated phone calls, as they are forced to navigate a labyrinth of requirements to collect benefits that the insured spent many years paying for.

“There is no possible way an elderly person who is ill and needs help can possibly do this work,” said Fiona Havlish, who coordinated her father’s home care in Pottstown, Pa., before he died last year, a week after his 90th birthday. “It took six to eight weeks to get the insurance into place, and this was working on it every single day. It was an incredible amount of work.”

Ms. Havlish, a former nurse who now works as a life coach in Boulder, Colo., said she first had to find a home care agency that was not only covered by the long-term care policy but one that she felt comfortable entrusting with her father’s care. Later, she had to follow up continually with the aides and doctors to make sure they were filing the proper paperwork so that they insurer would pay. “Three months after he was gone,” she added, “I was still fighting with them over paper.”

At least the bill for her father’s care was eventually paid. In other cases, families have had to fight to overturn denials, and have gone as far as hiring lawyers to file suit. Many Americans now in their 80s and 90s who are collecting benefits — or trying to — bought their policies decades ago when the policies were more restrictive than now. On top of that, many insurers have since left the business after mispricing the policies and failing to judge the economics of the industry, which has made collecting payments even more difficult.

“Everything is not rosy,” said Jesse Slome, director of the American Association for Long Term Care Insurance. “When insurers stop selling or exit the business, many of them hire these third-party administrators to adjudicate claims and that is where interpretations don’t seem to be as liberal.”

Insurance agents who have specialized in long-term care policies for a couple of decades, however, told me that most of the top-rated insurers pay claims without issue. And clearly, claims worth billions are paid each year: An estimated 264,000 people received long-term care benefits at the end of 2012, according to Mr. Slome, and $6.6 billion in benefits were paid that same year.

Still, “the process can be pretty daunting for people,” said Bonnie Burns, a policy specialist at California Health Advocates, an education and advocacy group.

If you need to file a claim on behalf of a loved one, it helps to know why claims are denied and where filers tend to get tripped up. Here’s what I gathered, from longtime brokers, consumer advocates and lawyers who do battle with insurers on these issues:

DEDUCTIBLES. In the long-term care world, deductibles work a bit differently than typical insurance policies. The policies have waiting periods, or elimination periods, and they are typically measured in days: 30, 60, 90 or 100 days. So if your policy covers $150 a day for in-home care, and you have a 60-day waiting period, you will typically owe the first $9,000 — 60 times $150 a day — before the policy kicks in.

But the way the waiting periods are counted is critical, too. “If a person is getting home care a few days a week, and the company only counts those days of care toward the waiting period, the total time needed to satisfy the waiting period will be much longer than 60 days,” Ms. Burns said. “So it isn’t just the $9,000, but the total time that has to be satisfied.”

With certain older policies, meanwhile, the insured person must also spend three days in the hospital before the policy will pay any benefits. “Some of these older policies have requirements that most states don’t allow today,” Ms. Burns said. “But these requirements must still be met in these older policies.”

ELIGIBILITY. To become eligible for benefits, patients must be expected to need “substantial assistance” for at least 90 days, either because they are suffering from a form of dementia, for instance, or because they can’t perform two basic daily activities from a list of six, including items like bathing, getting dressed and eating. (This applies to certain policies written after 1997.)

“What we are finding today is that when people are getting assessed, they fire on 8 or 10 cylinders on some days and they will trick people,” said Brian I. Gordon, president of MAGA, a long-term care insurance agency in Riverwoods, Ill. “They want to become Superman the day the assessor comes out. And then the insurer may deny the claims.”

Glenn R. Kantor, a lawyer in California whose firm focuses on insurance claims, said he represented a woman, blind from severe macular degeneration who was receiving benefits for home care. But when the representative from the insurer asked her if she could bathe by herself, the woman told the company she could as long as her aide led her into the shower and gave her soap and a washcloth. Shortly thereafter, the insurer cut off her payments.

Then, “they sent her to collections to get the money back,” Mr. Kantor said, because the caregiver was not within arm’s length but left the bathroom to go into the next room while the woman bathed. The insurance company settled, but the terms were confidential so Mr. Kantor could not divulge the insurer or the exact amount it paid.

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In South Sudan, a Rough Start to Press Freedom

It was hours to deadline for The Citizen, until recently the only daily print newspaper in South Sudan, and its staff had to wait until the generator was refueled.

Making a newspaper anywhere these days is not easy; making a daily newspaper in South Sudan can seem nearly impossible. The country is twice the size of Arizona and 80 percent of its roughly 10 million people are illiterate. Power losses, a scarcity of paved roads, scattershot Internet access and increasing tribal violence make it that much harder.

And yet since its founding in 2005 The Citizen hasn’t let down its readers a single day. But now the paper faces another challenge in the form of a new military leadership — one not always hospitable to a free press — running the world’s youngest state, one that gained independence only this year. On a morning in mid-November, a reporter named Ater Garang Ariath entered the news hut where two of his colleagues were discussing the day’s events. The editor in chief, Nhial Bol, was elsewhere. He had other things to do: the paper’s supplier of newsprint had stopped supplying it, so The Citizen had to decrease its circulation to 2,000 copies from 6,000.

That day, Mr. Ariath, 27, covered a dialogue forum for representatives of the South Sudanese media and national security services. He walked the mile to the event, since there was no bus stop nearby and a boda-boda, or motorbike taxi, was too expensive for him. Mr. Ariath said he made about 900 South Sudanese pounds a month, around $300. He has to write up to 40 articles for that and supports his family with the money.

Mr. Ariath began his career as a reporter at the paper of his refugee camp in neighboring Uganda. There is no one at The Citizen whose life hasn’t been affected by the war. Another reporter, Joseph Lagu Jackson, was a former child soldier and learned how to use an AK-47 at the age of 8; the news editor received death threats from the Arab rulers in the north when he was a radio journalist.

Though Mr. Ariath is very proud to work for one of the country’s most popular papers, he said the 16-page, English-language tabloid needed more editors. It is full of mistakes and typos, sometimes in the banner headline on the front page. Many reporters are not fluent in English. Mr. Ariath also said the paper needed more color. “In our pictures, Obama is white,” he said.

Since independence on July 9, several newspapers have been newly established in South Sudan. The country’s new constitution guarantees freedom of the press. But currently, that freedom is in jeopardy.

In October, another South Sudanese newspaper, The Destiny, ran a column that described the marriage of President Salva Kiir Mayardit’s daughter as unpatriotic because she had married an Ethiopian. The columnist and the editor in chief were arrested by the National Security Services and held in prison for two weeks. The Destiny was shut down. President Kiir later said the arrests were justified. The Destiny had tried to become South Sudan’s second daily.

A few weeks later in December, Alfred Taban, a former BBC correspondent in Khartoum, started the Juba Monitor which is now South Sudan’s second English daily. Mr. Taban’s Khartoum Monitor was banned by the Arab rulers along with five other South Sudanese owned newspapers printed in Khartoum when the south became independent. The Juba Monitor is also printed at The Citizen which is the only newspaper with a printing machine in South Sudan.

At the dialogue forum for the media and security services, both sides were called on to get along with each other. But the event didn’t seem to ease tensions. A spokesman for the Sudan People’s Liberation Army, or S.P.L.A. as the new country’s army is more popularly known, told reporters what they could cover and what would be risky for them — a list that included covering the army, for example. Philip Chol, a spokesman for military intelligence, said: “If you’re a responsible journalist, you will do something that is applicable to the country.”

Many reporters got angry. “The recent actions are actually the ones we suffered from in Khartoum,” said Mr. Taban, addressing the case of The Destiny. “I mean we’re trying to establish a democracy here.”

Many of the reporters who had come to the event said they had had bad experiences with the new military leaders who now ruled the country after years of oppression by the regime in the north. Mr. Ariath said when he once wrote about an official’s business deals, he got a phone call. If the paper ran the article, the person at the other end said, Mr. Ariath would get into trouble. The Citizen ran the article. Mr. Ariath was not arrested, but the editor in chief, Mr. Bol, was. Mr. Bol has been arrested three times since 2007 by South Sudanese authorities for articles that accused officials of corruption and mismanagement.

At 1 a.m., well after the writing and editing in The Citizen’s newsroom was done, four young men sat in the pale light of battery-powered halogen lamps inside the printing house next door. Listening to a smartphone playing Arabic folk music, they folded fresh copies of the newspaper by hand because the old German press couldn’t fold them automatically.

At dawn, Juba’s paperboys lined up in front of The Citizen. Some of them read the paper. Mr. Ariath’s article made it to the front page — with no misplaced letter in the headline, just a comma: “Deputy Minister Calls for Security, Media Cooperation.”

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High & Low Finance: Inevitability of a Default in Greece

“It would have a tremendous cost, with no benefit,” the minister, George Papaconstantinou, said in an interview on Greek television. “Greece would be out of markets for 10, 15 years.”

To financial markets, and to many other observers, it is more than thinkable. It is very close to a sure thing. When, how, and how messy it will be are open to question.

It was just a year ago this weekend that Europe bailed out Greece, amid much self-congratulatory talk. Olli Rehn, the European commissioner for monetary policy, said the move was “particularly crucial for countries under speculative attacks in recent weeks,” a reference to Spain and Portugal.

Markets — described by Anders Borg, Sweden’s finance minister, as “wolf packs” — returned to their lairs on the Monday after the bailout. The yield on three-year Greek government bonds plunged to 7.7 percent from 17.5 percent, as the price of such bonds soared 28 percent in a single day.

And how have things gone since then? Just fine in Germany, where growth is accelerating and unemployment is lower than at any time since German unification. The European Central Bank is even raising interest rates to curb inflation there. It’s going more or less acceptably in France and Italy, each of which recorded G.D.P. growth of 1.5 percent in 2010, well below Germany’s 4.0 percent. But it’s not going well at all in the country that supposedly was rescued. Greece’s economy shrank 6.6 percent, far more than the 1.9 percent decline in 2009.

The market wolves are howling again. The yield on Greek three-year bonds is more than 23 percent, not that anyone thinks that yield will really be received. The yields on similar Portuguese and Irish bonds have also soared into double digits. Investors are a little more skittish about Spanish and Italian bonds than they had been, but there is no sense of impending disaster.

Longer-term rates on Portuguese debt did slide a little this week after a tentative agreement on a bailout, but they remain at levels that show widespread doubts about the country’s ability to pay.

The trading patterns of Greek bonds indicate that traders expect a restructuring, and they think it will be messy.

That yields are as low as they are — if you can call 23 percent low — is a reflection of the fact that the bailout has been going on below the surface. The European Central Bank has been lending money to Greek banks, accepting Greek bonds as collateral on loans to other banks, and even buying bonds.

Keeping up the fiction that all will somehow be well if we just wait has its own disadvantages.

“Delays in restructurings are costly,” Alessandro Leipold, the chief economist of the Lisbon Council, a Brussels-based research group, and a former official of the International Monetary Fund, wrote in a paper this week. He warned that the longer the inevitable was delayed, the more potential economic production would be lost and the greater the amount of good money that would be thrown after bad in the form of ever larger bailouts. Ultimately, he said, the result would be larger losses for bondholders.

“The real problem is capital shortfalls in European banks,” said Whitney Debevoise, a partner in Arnold Porter and a former executive director of the World Bank, who has been involved as a lawyer for countries and creditors in several restructurings. Until the banks have more capital, forcing them to admit to losses would be problematic, to put it mildly.

Stalling has worked before. In the early 1980s, major American banks could not afford to admit that they had lost huge sums in the Latin American debt crisis. “There was,” Mr. Debevoise said in an interview, “a five-year period of temporizing while Citibank and other banks rebuilt capital.” Finally, there was a debt restructuring and the banks admitted to their losses.

Currently, some European banks would probably be hard pressed to take losses, a group that may include some of the German landesbanks, which are generally owned by state governments and are badly in need of new capital.

The European Central Bank itself would hate to report losses, which is one reason that the first Greek restructuring, when it comes, may avoid forcing bondholders to accept “haircuts,” or reductions in principal. Instead, cutting interest rates and postponing maturities could allow the central bank to pretend it had not lost money. Eventually, however, haircuts seem inevitable.

Although there have been plenty of defaults and restructurings by national governments in recent decades — a partial list includes Argentina, Brazil, Uruguay, Russia, Ukraine, Pakistan and Ecuador — there is no agreement on the way to arrange a restructuring. Nearly a decade ago, the I.M.F. tried to put together what it called a “sovereign debt restructuring mechanism,” a sort of international bankruptcy law. The effort collapsed.

As a result, restructurings can be messy. Some bondholders can try to hold out on approving a plan, hoping they will be paid more than those who agree. Lawsuits will be filed.

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After Japanese Crisis, New Urgency to Develop Radiation Drugs

But the two men — who were injured in a nuclear fuel accident in Japan in 1999, not during the current crisis — did not die right away. Drugs and procedures unavailable when the atomic age began kept Mr. Ouchi alive for 82 days, and Mr. Shinohara for about seven months.

As radiation spreads in Japan from crippled nuclear reactors, with workers at the Fukushima Daiichi nuclear plant potentially exposed to extremely hazardous levels, experts say that progress has been made in developing treatments for radiation poisoning. But there is still much work to do.

The crisis has put a spotlight on some small biotechnology companies developing drugs to treat people exposed to radiation. Some say they are accelerating their efforts in light of the problems in Japan.

Most of the companies are working under contracts from the United States government, aimed at treating people after a military or terrorist attack involving a nuclear or radioactive weapon. Such drugs would also be of use in a nuclear power plant accident, particularly for the nuclear plant workers, who might be exposed to the highest doses.

“There would definitely be a zone around ground zero where you could save a lot of people with these drugs,” said Mark H. Whitnall, program advisor for radiation countermeasures at the Armed Forces Radiobiology Research Institute in Bethesda, Md.

Based on tests using animals, he said, the drugs under development would allow people to survive doses 20 to 40 percent higher than what is now considered lethal. “We’d like to do a lot better,” he said.

The Japanese crisis has caused brief upticks in the shares of some of the companies focusing on this research, like Cleveland Biolabs. Some 5.6 million shares of Aeolus Pharmaceuticals changed hands on a single day after the crisis began, many times the usual trading volume.

“It was crazy, just crazy,” said John McManus, chief executive of the company, which is based in Mission Viejo, Calif. In February, it received a federal contract worth up to $118 million to help it develop a drug to protect the lungs from radiation damage.

Several of the companies say they want to make their drugs available for use in Japan, but the government there has not ordered any. The drugs in question have not been approved by the Food and Drug Administration, and it is unclear whether anyone in Japan, even workers at the Fukushima plant, have been exposed to enough radiation to warrant such treatments.

Most of the drugs in development are two to five years away from possible regulatory approval, federal officials say, and even once approved there would still be some slight uncertainty about how well they would work in people. Because it would be unethical to expose people to high levels of radiation in a clinical trial, the F.D.A. allows approval of this type of drug if it proves effective in two species of animals and is shown to be safe in people at doses corresponding to those used in the animals.

Getting federal support for the research is one thing. It might be tougher to get the federal government to buy large quantities to be stockpiled for use in an emergency.

A cautionary tale is that of Hollis-Eden Pharmaceuticals, which was developing a steroidlike compound that was championed by Defense Department scientists. But in 2007, after the company spent $85 million on development, the Department of Health and Human Services decided not to buy the drug, saying it did not meet technical requirements.

Hollis-Eden’s stock price collapsed and has never recovered. The company dropped the drug and changed its name to Harbor BioSciences.

Some federal officials and experts say that Health and Human Services decided it needed drugs that could be effective even if not given until 24 hours after exposure, reasoning that in the event of a terrorist attack it would be hard to get the drug to people immediately. The Hollis-Eden drug did not meet that requirement.

The department plans a big purchase, but not of an experimental drug developed by a tiny company. Rather, it is looking to buy hundreds of millions of dollars worth of Amgen’s Neupogen or a similar drug, including generic versions of Neupogen that have been approved in Europe, according to Robin Robinson, director of the department’s Biomedical Advanced Research and Development Authority.

Neupogen helps the body build infection-fighting white blood cells, which can be depleted by radiation. The drug is approved to help prevent infections in cancer patients undergoing chemotherapy, but the F.D.A. has issued an “emergency use authorization” that would allow the drug to be used to treat radiation exposure.

Biodefense work has largely fallen to small biotechnology companies because they need the money, especially at a time when investors are averse to risk. Federal research grants can help defray the costs of developing a drug for commercial uses. In the case of radiation treatments, the commercial use would mainly be to protect cancer patients from the side effects of radiation therapy.

“It’s significant funding for a biotech company like ours,” said Ram Mandalam, chief executive of Cellerant, a private company that won a federal contract worth up to $153 million over five years to develop a drug using stem cells to help bolster the immune system after radiation exposure.

Radiation can have various health effects, depending on the dose and form. For nuclear power plant accidents, the major exposure for the public would come from radioactive isotopes, and there already are some approved drugs for these that are in the federal stockpile.

Potassium iodide can help prevent thyroid cancer that can be caused by iodine-131, which has been detected in some milk, produce and tap water in Japan. Elevated levels of radioactive iodine have also been detected in milk in Washington State and California but the levels are still far too low to pose a health threat, the Environmental Protection Agency said on Wednesday. It has stepped up monitoring of radiation levels.

Exposure to cesium-137 can be treated with Prussian blue, a pharmaceutical version of an industrial dye, while plutonium exposure can be treated with DTPA. Both drugs bind to the isotopes and help the body to excrete them.

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