Nursing Home Insurance: Programs, Liability, Costs & More
April 29, 2020
- Last edition
May 13, 2020
The aging US population makes nursing home insurance a growing market. Investopedia reports 10,000 Baby Boomers retire daily. As more of them reach age 65 and older, their healthcare needs are causing an increasing need for nursing home programs. You can see it in the Census data showing rising demand for senior living insurance. The Census reports the number of mostly elderly adults who will need insurance for nursing home care or alternative residential care will more than double from eight million in 2000 to 19 million by 2050.
Distribution of Long-Term Care Providers
Nursing home insurance programs cover Adult Day Services Centers, Home Health Agencies, Hospice, Nursing Homes, and Residential Care Communities. This chart comes from a 2016 study by the Center for Disease Control (CDC). Its statistics show long-term care service providers by sector and region. Continuing Care Retirement Community (CCRC) numbers are not listed separately on the chart below.
Insurance for Nursing Home Care Providers
The scope and complexity of providing proper protection for the owners and administrators of nursing home operations are broad and challenging. The expanse of jobs and processes within several types of nursing homes, including in-home care and custodial care, requires both admitted and non-admitted insurance to cover nursing home insurance risks adequately.
Insurance Coverages for Nonprofit Nursing Homes, Assisted Living Facilities, and Senior Living Facilities
Here are many of the coverages that all types of long-term care facilities need:
● Professional Liability
● General Liability
● Excess Liability (high limits available)
● Cyber Liability
● Property Coverage for buildings, personal property and business interruption (monoline)
● Commercial Automobile (including private passenger and transport vans)
● No exclusion for Physical & Sexual Abuse Liability
● Protection for Medical Directors while acting within the scope of their administrative duties
● Facility Barbers & Beauticians Coverage
Errors and Omissions Insurance for Medical Defense and Billing Companies
Nursing homes that deliver either direct medical or medically related services are typically eligible for these coverages:
● Defense costs and civil fines and penalties coverage for Billing Errors, HIPAA, EMTALA and Stark proceedings
● Standalone HIPAA Protector - Defense costs and civil fines and penalties coverage for governmental HIPAA proceedings.
● Full Prior Acts available
● Broad definition of Insured
● Broad definition of Billing Errors Proceedings to include both governmental and commercial payor audits and investigations, qui tam plaintiffs, or voluntary self-disclosure
● Waiver of co-insurance upon selection of panel counsel
● Sub-limit available for Medical Board Proceeding defense cost reimbursement
● Payment for shadow audits
The Impact of Covid-19 on Nursing Home Insurance Plans
In April 2020, it's not possible to know the full extent of COVID-19 nursing home considerations. Only time will tell how Covid-19 will impact long-term care insurance coverage for nursing homes and other eldercare businesses. It's easy to speculate that insurance for senior living homes and home care will undergo extensive review and change in response to the devastation caused by the coronavirus. Changes to the average cost of nursing home insurance are a near certainty.
Because the elderly population is particularly vulnerable to coronavirus, its virulence has caused widespread and very high per-capita deaths in nursing homes across the US. With the coronavirus unchecked at this time, one can extrapolate much pent-up demand is building toward potential litigation regarding Covid’s extensive effects on nursing homes. With most non-essential businesses closed, and much of the US population staying home, it will take considerable time to understand the full legal and insurance ramifications of Covid-19 on nursing homes.
The National Law Review published an informative article, Coronavirus – Business Insurance Policies Which May Apply. While not specific to nursing home insurance programs, its insights on how the coronavirus will affect business insurance apply to them. Coverages mentioned include Business Interruption Insurance, Commercial General Liability/Professional Liability, Workers' Compensation, and Directors & Officers Liability Insurance.
A separate article, Staff Shortages Threaten Residents at Nursing Homes, also from the National Law Review, quotes David Grabowski, a healthcare policy professor at Harvard Medical School. He says, "Staffing is one of the most important measures of nursing home quality, and it accounts for about two-thirds of a facility's spending on average." Underwriters, agents, and brokers will find the advice to consumers who are researching nursing homes for loved ones also applies to them—that is, staffing is the top factor to consider.
Another essential article is from the Harvard Business Review, What Will U.S. Health Care Look Like After the Pandemic?. It addresses what the system can learn from the existential challenges it faces due to the spread of Covid-19. The essay provides a penetrating look at some of the emerging, broad lessons we are learning from the pandemic. As one example, much of the medical profession has long shunned telemedicine. Due to the need the coronavirus has created for social distancing, it has now become indispensable. Telemedicine and other trends in medical care and healthcare insurance are sure to evolve in some format in the new normal, post-Covid-19 era.
New risks with the need to cover them are inevitable. We’ll track and report on changes affecting nursing insurance on this blog. It’s a smart move to subscribe to it now.
Nursing Homes Are Getting into the Insurance Business
A recent article from US News & World Reports indicates a new trend. That is a small number of nursing home companies have begun selling their own private Medicare insurance policies. The move is not without causing controversy and conflict. It will take time to learn the full impact of shifting dynamics like this on patient care and costs, as well as on whether agents and markets embrace, fight, or otherwise learn to live with the concept.
Medicare Relaxing Rules in Response to Covid-19
With elderly beneficiaries at the highest risk for Covid-19, Medicare is changing some rules. The following "Medicare Is Updating Coverage to Help in the Coronavirus Crisis" excerpt is from the New York Times,
What about nursing or long-term care after a hospitalization?
Normally, Medicare covers care in a skilled nursing facility for up to 100 days after a qualifying hospitalization. During this crisis, patients can be covered if they need to be transferred to skilled care to make room at hospitals, or need that care because of the Covid-19 emergency, regardless of whether they were previously hospitalized.
For enrollees in the traditional program, Medicare covers all costs for 20 days, and there is a daily co-pay of $176 after that. The most popular Medigap supplemental plans pick up 100 percent of that additional cost. For Medicare Advantage enrollees, costs vary by plan.
Medicare does not cover long-term stays in long-term care facilities.
This insightful NYTimes article is worthy of a full read. It provides explanations and details of how Medicare will cover testing and vaccines for coronavirus and related issues.
Administrators Licensure Requirements
The NAB (National Association of Long Term Care Administrator Boards) develops and administers the licensing examinations for states. To get licensed, Nursing Home Administrators (NHA) and Residential Care/ Assisted Living Administrators (RC/AL) must pass NAB examinations in their respective states. States have unique requirements. The NAB site publishes useful resources, including PDF downloads of state-by-state licensure requirements.
Nursing Home Insurance Programs
Program Business offers options for specialty nursing home underwriting. Our participating underwriters specialize in nursing home insurance programs, including Senior Living Facilities, Skilled Nursing Facilities, Assisted Living Facilities, Independent Living Facilities, Nonprofit Nursing Homes, and CCCRs.
The providers you find listed in ProgramBusiness.com are experts who understand the complexities of insuring all types of nursing homes, assisted living, and in-home care operations. They have valuable knowledge on how to navigate differing state laws regarding nursing home facilities and their multifaceted healthcare coverage insurance needs. By tapping their expertise on nursing home insurance coverage and long-term care insurance, you increase your odds of successfully closing business from your top nursing home insurance prospects. Subscribe to our blog for updates on available Nursing Home Insurance programs.