Ruth is 88, still quite independent, taking care of herself at home. She does her own shopping and cooking and pays her own bills. Great at her age, right? But when it comes to memory, that’s a problem. And forgetfulness plus an unforeseen glitch caused a financial disaster for her. Here is what happened.
Ruth has Medicare and buys an additional supplemental insurance to cover the portion of bills Medicare doesn’t. Typically, Medicare pays 80% of covered services and the supplement picks up the other 20% of most hospital and doctor visits. The extra 20% doesn’t sound like a lot, unless you have a crisis and have to go to the hospital.
Ruth was having occasional trouble receiving her mail. The mail carrier sometimes lost envelopes addressed to various folks along the route or he put them in the wrong mailbox. That’s just what he did with Ruth’s supplemental insurance bill for her monthly premium. She didn’t pay the bill one month because she never got the bill. That was the glitch. Unfortunately that is exactly the month that she had a major health crisis and had to be hospitalized, spending time in ICU, then in rehab. She never knew that her supplemental insurer had missed a premium payment from her until they denied payment to the hospital for the amount due after the hospital got paid in full by Medicare. She was very upset and called them. They brushed her off. She told them what happened. You would think an insurer for supplemental coverage for people over 65 would get it that sometimes one of their customers might have a health issue and miss a payment or might not get the premium notice. She had never paid late nor had she ever missed a payment. They didn’t care. Her bill for the amount Medicare didn’t cover was over $80,000. They flatly refused to pay it.
The insurer not only denied coverage for the month in question, it cut her off from coverage altogether after that and forced her to get another company to give her supplemental insurance. She is fighting it. However that involves hiring an attorney who specializes in going after companies that mistreat their own insureds. She is making what is called a “bad faith” claim. That means that she will try to prove that the insurance company wrongfully denied coverage when her overlooking the bill was simply because she never received it. The case could take quite some time.
Ruth’s case is not the first time I’ve seen a situation when an older person fails to pay an insurance premium notice either because of illness, dementia, not receiving the bill or other valid reason. And some other companies are more reasonable that Ruth’s. Some will allow reinstatement of coverage when the amount owed is paid in full. Her former supplemental insurance company has been horrible, clearly to get out of the large bill they would have had to pay. They’re probably happy about it. Ruth is distraught.
Now imagine that Ruth is your mother, grandmother or other family member. Most write checks by hand for paying bills, as they have done all their adult lives. Making a change in how to manage bills would be daunting for many seniors. Lots of people in their 80s don’t use a computer or are able to do so with many limitations. And this is the one thing you, the younger family member can do to prevent a disaster like Ruth’s. Get your aging loved one set up so that payments for ongoing, recurring expenses are auto debited from a bank account. This applies most especially to insurance premiums. Ruth is certainly not the only person to have ever missed an insurance payment nor is she the first to be treated so badly when she tried to make up for the missed payment. Two months went by before she realized what had happened. By then it was too late, as the insurance company used the excuse that she had a month and she “didn’t do anything”. Never mind that she was still in a rehab facility at the time.
Even if you do not use auto pay yourself, it is something you really must do for your loved ones to prevent the disaster Ruth is facing now. We all know that hospitals charge what look like outrageously high sums for everything. That bill coming to a loved one because of a simple error can be a source of extreme stress. Take the time now to talk with your loved ones about the prospect of auto pay for all of their recurring bills. Even if they are unsure of how to set it up, you the family member can offer to do this for them. It’s a small step but hugely helpful to prevent financial loss.
