Nursing Home Liability Insurance Premiums Increasing

The average liability insurance premium for the 900 members of the California Association of Health Facilities -- a trade group representing nursing home owners -- has increased to approximately $1,350 per bed, more than three times the premium rate recorded five years ago, the Sacramento Bee reports. A study commissioned in February by a national association of long-term care providers found California to be among the states with the highest liability insurance premiums in the country, according to the Bee. Betsy Hite of CAHF said that Medi-Cal beneficiaries receiving fixed-rate payments account for 75% of state nursing home residents, making it difficult for the homes to increase prices to account for rising premiums. About 11% of the state's 1,400 nursing homes are in bankruptcy proceedings, and at least eight have been shut down in the last two years, Hite said. Of those still open, an estimated 20% of nursing homes are operating without liability insurance, according to Hite. In addition, some nursing home owners cite "frivolous lawsuits" as the cause of the increases, saying the cost is causing some owners to close their facilities. Pat McGinnis, executive director of the California Advocates for Nursing Home Reform, said, "Rising premiums are no fault of patients and their families," adding that blaming an increase in lawsuits is "an easy excuse" for nursing home owners and "the greedy insurance companies." Nicole Mahrt, spokesperson for the American Insurance Association, said, "It is becoming impossible to accurately predict losses," adding that insurers "don't raise their prices for no reason" (Payne, Sacramento Bee, 4/4).