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Congress is investigating long term care insurance.

A Congressional committee yesterday began looking into business practices in the long-term care insurance industry.

The House Committee on Energy and Commerce has asked Conseco and the Penn Treaty American Corporation, two of the nation’s largest sellers of long-term care insurance, to produce documents showing how the companies market long-term care policies and handle policyholder claims.

The requests, which are expected to be a precursor to hearings by the committee, come as the Government Accountability Office prepares to begin a separate investigation. At least five senators, including Hillary Clinton, Democrat of New York, and Barack Obama, Democrat of Illinois, have asked the agency to open an inquiry.

In March, The New York Times reported that some long-term care insurance companies had developed procedures that made it difficult, if not impossible, for policyholders to get paid. That article — which focused on Conseco and Penn Treaty — was cited by the House committee and in the senators’ letters as the instigation for their investigatory requests.

What has prompted this:

According to court documents, Conseco, Penn Treaty and other insurers developed policies that rejected policyholders’ claims because they had failed to submit unimportant paperwork, filled out the wrong forms after receiving them from the insurance companies or because facilities had been deemed inappropriate even though they were licensed by state regulators. In California alone, nearly one in every four long-term care claims was denied in 2005, according to the state.

Those details, when reported by The Times in March, prompted an outcry of complaints among insurers who said that most long-term care policyholders were satisfied with how their claims had been handled.

“There is a tiny percentage of disgruntled policyholders filing complaints,” said Frank A. Keating, president of the American Council of Life Insurers, an industry trade group. “To the extent that this probe will shine a light on companies that are making mistakes, that will be a positive thing.”

I hope Congress can weed through real problems for many vs. a few because this regulation could just drive up the costs for insurance- many elderly people have purchased LTC policies that are designed to cover the first couple years of assisted living or nursing home stays. I have a policy that I bought a few years ago and I add a small amount to it each month; my hope is to pay for my own care and have a choice as to where I might be admitted. When the government is paying your bill, you don’t have that choice and you go wherever the empty bed is. Usually this is within a reasonable distance of your hometown or nearby where your children live. But not always. And no thanks. I want to go where I deem fit.