In March, The New York Times reported that some long-term care insurers had established procedures that made it difficult, if not impossible, for some policyholders to be paid. That article, which focused on Conseco and Penn Treaty, was mentioned by Senator Grassley in his letters to insurers and by the House Committee on Energy and Commerce when it started a similar investigation in May.  Genworth Financial, in a statement, said the company intended to cooperate fully with Senator Grassley’s request. Conseco and Penn Treaty declined to comment or return phone calls.  This week, Mr. Grassley also asked the Government Accountability Office to examine how private equity ownership had affected the quality of care in nursing homes. In particular, Mr. Grassley asked the agency to examine how many nursing homes had been bought by private investment groups and how conditions had changed after those homes were acquired, and to examine the number of health and safety deficiencies cited by regulators at those homes.  A report in The Times last month said that private equity firms had bought thousands of nursing homes and then often cut expenses and staff, sometimes below minimum legal requirements, to increase profits.  Both investigations come at difficult times for the industries.  Many long-term care insurers have recently announced that they are raising premiums because they underestimated how many policyholders would eventually make claims. Genworth, the nation’s largest provider of individual long-term care policies, said last month that it would raise premiums by as much as 12 percent for some policyholders, the first such increase in the company’s history.  In June, Conseco announced that it was setting aside $250 million to pay a settlement in a class-action lawsuit brought by policyholders. That same month, a subsidiary of Penn Treaty was suspended from operating in Florida after regulators said the company failed to file audited financial results. The company has appealed that ruling.  The nursing home industry has also faced questions recently. The Service Employees International Union, one of the biggest labor unions, sent letters to Congress this week asking lawmakers to examine the proposed acquisition of HCR Manor Care, the nation’s largest nursing home chain, by the Carlyle Group, a private equity firm. “Profit for investors cannot come at the price of patient safety and care,” the union said in a statement.  The acquisition of Manor Care is not yet complete. But, the Carlyle Group said, “We expect to maintain the same high quality care that seniors and their families have come to expect.”
The top-ranking Republican on the Senate Finance Committee has asked 11 long-term care insurance companies to explain “troubling data” regarding how policyholders’ claims are handled and paid.