July 9, 2020 / 2:02 PM / a month ago

Pandemic pushes U.S. insurers to avoid already strained senior care market

    By Suzanne Barlyn
    July 9 (Reuters) - The coronavirus pandemic has made it even
harder for senior-care centers in the United States to find or
afford standard liability insurance, with rates soaring by as
much as 300%, insurance brokers said.
    Residential care communities like nursing homes and
assisted-living facilities had already faced escalating prices
and a dearth of insurance providers for years. Outbreaks of the
novel coronavirus and a related respiratory disease called
COVID-19 in such centers only exacerbated the problem. 
    "It was already on an upward trajectory but COVID
accelerated it," Deepa Desai, who heads insurance broker Aon
Plc's         healthcare practice, said about rates.
    Senior care facilities need general and professional
liability insurance, which protect against everything from
slip-and-fall incidents to staff-member mistakes that harm
    Senior-care providers with expiring policies have struggled
to find insurers that will offer coverage in recent months, as
some imposed moratoriums on new business deals and others jacked
up prices to unaffordable levels, brokers said. 
     For instance, insurance company Chubb Ltd         imposed a
moratorium on new senior-community clients in March, two sources
familiar with the matter said. Chubb recently ended the
moratorium but is being highly selective about terms and clients
it accepts, they said. A Chubb spokesman declined to comment.
    Senior-care communities who can renew policies are paying
far more for less coverage, industry sources said. Some insurers
are adding exclusions not just for the novel coronavirus, but
for communicable diseases at large. Exclusions for costs related
to class-action lawsuits are also cropping up.
    On June 19, families of three patients who died from
COVID-19 at Summit Manor sued the Columbia, Kentucky-based
nursing home, saying it failed to protect residents. A
spokeswoman for Signature HealthCare, which owns the facility,
declined comment.
    To mitigate those risks, insurers are requiring customers to
answer "COVID-19 questionnaires" that ask about previous
outbreaks, visitation procedures and preparations for a second
wave, said Joanne Wankmiller, national senior care practice
leader for Marsh, insurance brokerage unit of Marsh & McLennan
Companies Inc        .
    Church Mutual Insurance Co's five-page questionnaire asks
about personal protective gear supplies.
    "We have concerns about new shortages being able to emerge
again," said Jim Ketterson, the company's senior living
    It is not yet clear how higher insurance rates are impacting
the U.S. senior care industry, but pandemic-related expenses
have already pushed some entities into the red.
    Hallworth House, a Providence, Rhode Island-based nursing
home, said last month that it would close in August after losing
more than $1.3 million during the past two years. The pandemic
sickened more than half of its 51 residents and 20 staff members
in recent months, and 12 residents died.
    The industry is also experiencing lower revenue, as the
pandemic keeps prospective customers away.
    Nursing home occupancy fell nearly 6 percentage points to
79% in April from 85% in February, according to the National
Investment Center for Seniors Housing & Care. That is partly
because of state and local lockdowns and fewer referrals for
care by some insurance plans due to federal restrictions.
    The senior-care industry is lobbying for broad federal
immunity from lawsuits and also pinning its hopes on efforts in
at least 21 states to grant various forms of immunity, including
to nursing homes and health care providers.
    In the meantime, some senior care companies are thinking
about creating insurance cooperatives to offset surging rates,
said Barbara Duffy, a Seattle-based lawyer who advises senior
communities on insurance.
    "These staggering bills could bring the profession to a
breaking point," Duffy said.

 (Reporting by Suzanne Barlyn; Editing by Lauren Tara LaCapra
and Aurora Ellis)
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