More than 6 million Americans have long-term care insurance, and while the policies are supposed to cover nursing home or at-home care for recipients, many policy holders find it impossible to get paid.
That was the experience of Vera Smith, the daughter of former slaves, who moved to California in 1945 with $1 to her name to seek out the life of her dreams. Her proudest achievement was when she acquired her own house, but it would eventually be sold to pay her medical bills.
At 87, when her health was failing, Smith bought long-term care insurance to cover her medical expenses.
"She didn't want to be a burden to my family … and I said, 'Mom, it's my time to take care of you, you took care of me,'" Smith's daughter Veray told ABC's Deborah Roberts.
After Vera Smith began to show signs of dementia, the insurance plan paid for nurses' aides. But as she weakened and her daughter took her in, the insurance payments stopped.
The insurer, Penn Treaty Corp., denied coverage, saying, "Care services are to be provided in the policy holder's residence" and that Vera Smith was in violation of her policy. Her children think the company simply didn't want to pay the growing tab.
"She outlived what I guess the life expectancy [was]," Veray said. "No matter what I did, they weren't interested. They wanted me to disappear and go away."
Read the Fine Print
Overwhelmed with mounting medical bills, Smith's children made the heartbreaking decision to sell their mother's cherished home and file a lawsuit. Two days before going to court, Vera Smith died and the insurance company settled the suit.
Complaints like this one are growing, up 40 percent in the last few years, according to one estimate. Even Congress is now looking into the long-term health care business.
"An insurance policy is a legal document — you have to read the fine print," said Carol Abaya, the health industry writer who coined the term "sandwich generation" to describe those raising children while having to care for their aging parents.
She says the big problem is that many people aren't clear on what services their policies provide, but that should not discourage people from considering this form of insurance.
"In most businesses, the good outweigh the bad," Abaya said. "I think long-term care insurance is extremely useful, becoming much more important than it was 10 or 15 years ago because more people are living longer — they want to stay in their own home."
Another recipient, 72-year-old Barbara MacMullam, knew exactly what she was getting when she enrolled. After she had a stroke, her long-term care insurance company, Genworth, kicked in and paid for a caregiver in her own home.
"I would have been bankrupt without Genworth … because I don't have that kind of money," MacMullam said. "It was several thousand dollars."
"It's worth it to protect your assets to make sure you get the care that you want and the care that you deserve," Abaya said. "It's worth it to take the burden off your kids from having to run all your errands and take care of you."
Most experts agree that the insurance industry is solid and say MacMullam's case is more typical of the kind of experience people can expect.
But there are a few things to know before you buy long-term care plans — compare rates from at least three companies, buy from a reliable company licensed by your state and, most important, read the plan closely.