Posted On July 30, 2022.

Many nursing home operators said their property and personal liability insurance premiums increased between June and July – sometimes dramatically.

In fact, professional liability premiums rose “significantly,” according to 30% of nursing company respondents to the latest National Investment Center for Seniors Housing & Care (NIC) Executive Insights survey.

Lack of competition in the insurance market, Covid concerns and litigation were cited as some of the main reasons. Increased frequency of natural disasters, along with a nationwide increase in frequency and severity of claims are other ties to insurance jumps, according to NIC’s summary of the findings.

John Atkinson, managing director and leader of the national senior living and LTC Industry Group for Marsh, said carriers are also looking with a higher degree of scrutiny at how nursing homes are responding to the staffing crisis.

The survey found 50% of all participating post-acute care segments, including nursing homes, saw a slight increase in professional liability insurance; an additional 30% of nursing home respondents said this type of insurance increased “significantly.”

Property insurance findings were similar, according to the NIC survey, with 50% of respondents saying their property insurance increased a small amount, while one-quarter to one-third seeing a large bump to their property insurance.

Atkinson said there was already a hardening of the liability insurance marketplace between 2018 and 2019.

When Covid hit, there was a lot of concern over a potential tsunami of Covid-related claims made against operators – that concern was even more acute in the nursing home sector, he said.

Some states like California, New York and Florida were litigation hotspots, said Atkinson, resulting in higher liability insurance increases.

While there’s still an influx of Covid-related claims driving up insurance rates, it’s still not to the level that people anticipated, he added.

In terms of future insurance rates, Atkinson expects more capacity and in turn more competition to drive rates back down.

NIC survey respondents were owners and executives of 50 skilled nursing and senior living operators, with 67% owning or operating one to 10 properties. About 20% operate 11 to 25 properties and 13% have 26 or more facilities. More than half of respondents were for-profit providers, 38% were nonprofit providers and 10% operate both.

NIC’s executive survey was established in March 2020 to present real-time insights into pandemic impact on post-acute care sectors, and take a look at the road to recovery.

Since that time, NIC researchers were able to confirm the pace of move-ins is closely tied to Covid infection cases – most recently, there was a decrease in reported acceleration of move-ins when facilities were dealing with the highly transmissible BA.4 and BA.5 subvariants between the end of May and July.

Specifically for nursing homes, the pace of move-ins in the last month decelerated 29%. This marks the second consecutive wave where fewer nursing home organizations reported accelerated move-in pacing.

Move-in acuity has also increased for nursing homes, according to 64% of nursing care respondents, an increase of two percentage points from the NIC executive survey between April and May.

Surprisingly, staffing shortages were not a driving factor in overall deceleration in the pace of move-ins, according to the NIC survey. In the previous survey, conducted in June, 16% of respondents said labor shortages were causing a drop in move-in pace.

Instead, 76% of respondents to the latest survey said deceleration was due to slowed lead conversions and sales. About 18% said slowed move-ins were tied to organization-imposed bans on admissions, and 6% said resident or family member concerns contributed to slowed move-ins.

Original Post: Nursing Home Operators Stung by ‘Significant’ Insurance Cost Increases