Sunday, April 11, 2010

Aren't You Dead Yet? Redux with Update

In 2006, I wrote this post about an HIV-positive woman who was in a legal struggle with the viatalic insurance company that had bought her life insurance policy in 1994, hoping she'd die and they could collect on her death benefit before they were contractually obligated to start paying her health and life insurance premiums after two years. As my post indicates, it didn't turn out the way either of the parties thought it would, and a lawsuit ensued. Because of the recent turn of economic events, especially regarding the subsidizing of insurance companies, and the freshly minted health care reform legislation, I thought it warranted a second look. I've included an update at the bottom, regarding the case and the current condition of our heroine, Miss Intrepid.


A new award -- The Catharine Chronicles Butthead of the Month Award.

Here's a cockle-warming story about a company that is trying to back out of their legally binding contract with a woman because she had the unmitigated nerve not to die as originally planned. In the early '90s, our intrepid heroine (Miss Intrepid hereinafter) learned that an ex-boyfriend who'd died of AIDS related complex had infected her with the disease. For those of you too young or too stoned in the 90s to remember, back then, a positive reading on a Western blot was still pretty much a death sentence. A few years later, Miss Intrepid was diagnosed with an AIDS-related cancer, for which she began treatment. During treatment, while flipping through a magazine targeted at those living with AIDS, she read an ad from Life Partners, a so-called viatalic settlement and life settlement company. These are the companies you see on television ads offering to pay a lump sum if you've had an injury judgment or to pay a pre-death lump sum payment against your life insurance policy.

Life Partners was making a bundle in the late 80s, early 90s, offering to buy life insurance policies from AIDS patients with an upfront cash payment, and cover their health and life insurance premium costs if they lived past two years. The benefit to Life Partners was that they would become the sole beneficiaries of the life insurance policy. Again, back in the early 90s, this was a pretty sound gamble for Life Partners, as most people who had experienced at least one opportunistic AIDS-related disease didn't tend to live too much longer than two years after diagnosis.

Miss intrepid, who was single with no children, thought that sounded like a good deal, so she sold her $150,000 life insurance policy to Life Partners. They paid her $90,000 upfront and after she had survived two years, began paying her continuing health and life insurance. And then a funny thing happened.

She lived. And lived. And... well, here we are in 2006, and our Miss Intrepid, now 50, God love her, is still ticking. See, Life Partners failed to take into account two operative factors in their "bettin' on death" equation: One, that our heroine hadn't contracted the disease from a lifestyle slip, like intravenous drug use. She was an otherwise healthy, strong woman from apparently hearty stock, who took pretty good care of herself and followed doctors' orders. And, two, that within two to three years, researchers would stumble across the single biggest boon to the HIV-infected -- the protease cocktail.

Life Partners has, to date, shelled out over $100,000 on life and health insurance benefits for Miss I., which now total approximately $29K annually. And they're not happy about it. They've continually threatened to refuse to pay her health insurance premiums (once, literally on the due date), and have filed suit to get out of the contract. They sent her an angry letter telling her that Life Partners' stockholders were "no longer willing to bear the burden" of paying her premiums. Miss Intrepid hired lawyers of her own -- and good ones, too -- who reminded Life Partners that a binding legal contract existed between Miss I. and Life Partners and, should Life Partners allow the policies to lapse due to non-payment, they'd be liable for.... well... let's just say that's when things got ugly. They also reminded Life Partners that death, while it does come to us all, was not a contractually prescribed provision on Miss I's part, and her refusal to die could not be considered a material breach. Or words to that effect....

At present, Life Partners is paying for Miss I's insurance, presumably on time. One of their executives has even publicly acknowledged that they are contractually bound to do so, which is nice, I think, considering that, hey, they're contractually bound to so. This is what makes this story so very reprehensible. A conventional insurance company, like, say MetLife, makes its money if you stay alive and they can milk you for your premiums. They want you alive and well and walking around, so you can go out there and earn money and continue to pay them, by golly. So they create actuaries designed to find out what makes folks life the longest (this is why I will always maintain that, more than the BMI scale, which is random and untested, the MetLife weight charts may seem heavy, but folks who fall into those categories tend to live longer and be healthier statistically).

Life Partners, on the other hand, is gambling a lot of money on the fact that you'll die, and be quick about it, please. Here's the thing. Obviously, Life Partners doesn't spend a lot of time in Vegas or Atlantic City. When you gamble and lose in those places, you don't go to the pit boss and ask him for "do-overs." You're likely to get laughed at, then escorted to the nearest exit by a large, dispositionally challenged security guard named Bruno. Likewise, if you're foolhardy enough to bet on whether someone will live or die, and then they actually manage to beat the odds and live, you just have to kind of suck it up and pay the loss. You and your whiny, dumb-ass stockholders. I kind of hope this ends up in court, because I'd like to hear a Life Partners executive actually say out loud, under oath, "Well, yeah, but she violated the terms of the contract first by not dying."

Meanwhile, our Miss Intrepid goes steaming along, in good health and with a positive outlook, all things considered. Aside from the cancer, which has been in remission for over ten years, she hasn't had another opportunistic infection. She says she feels great and she plans to continue living for a good long while, if for no other reason than to spite Life Partners, I'm sure.

So, the inaugural Catharine Chronicles Butthead of the Month Award, April 2006, goes to Life Partners, its board of directors, its chief officers, and, yes, even its stockholders, for their relentless efforts to profit from the fear and desperation of the sick, injured and dying.

Congratulations, Life Partners. You're a butthead, and you don't care who knows it.

Update: In late April of 2006, shortly after the original post was written, the judge hearing Miss Intrepid's case ordered Life Partners to place $837,000 in a trust to benefit Miss I. This is comparable to 29 years of premium payments, which would cover her to the average American female life expectancy of 79 years. Life Partners, of course, whined and filed an appeal, and Judge Vogelson allowed them to place $75,000 in trust (two years' worth of payments) in trust while the case was being appealed. Life Partners then proceeded (as one could only expect them to do) to drag their feet and delay and appeal and appeal.... clearly hoping that Miss I would do the right thing and kick the bucket already. Fear not, Concerned Readers. Miss I is still healthy, still going strong and still fully holding Life Partners to their agreement.

The case finally came to a close in June of last year, when Miss I accepted a $250,000 settlement in cold hard cash from Life Partners. It's a far cry from the $800,000, but I'm guessing Miss I's happy to have the "bird in the hand," rather than in a mutable trust fund. The $250,000 will cover her premiums until she's eligible for Medicare, and then will cover any supplemental insurance she buys for quite some time after that. She expressed relief that going forward, the settlement "allows me to make my own decisions."

As for her health, she reports that, at 53, she is doing well, her cancer has stayed in remission, and her doctor believes that she faces the same health issues that someone her age without AIDS would face. So we expect that Miss I will be around for a long time.

Note: This research for this update comes from links on the news page of the AIDS Law Project of Pennsylvania, and most of the articles where I got my facts were written by Monica Yant Kinney.

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