Hundreds of Texas Nursing Homes Dropping Liability Insurance Because of High Costs
Increased medical liability insurance rates have forced hundreds of nursing homes in Texas to shut down or operate without coverage, the Houston Chronicle reports. Many liability insurers have exited the Texas market, and those that remain have increased premiums for nursing homes. In the nursing home market, a "niche" market for insurers, one large liability settlement or award could account for all of the premiums collected from a facility in a year. This year, liability insurance rates for nursing homes have increased fivefold -- to about $500,000 per year for some facilities -- a trend that insurers and nursing homes attribute to an "unprecedented barrage of lawsuits." As a result, more than 25% of the state's 1,200 nursing homes operate without liability insurance. According to nursing home operators, a lack of liability coverage places the facilities at risk for closure and "unfairly exposes" doctors, nurses and board members to lawsuits. Consumer advocates add that a lack of liability insurance at nursing homes leaves residents with "no recourse in the event of accidents or neglect." Joyce Lilly, a registered nurse and plaintiff's attorney, said, "I think it gives the facility that doesn't have coverage (the impression) they are judgment-proof. They can give bad care and not have claims filed. I think that's very bad for the consumer and dangerous for the residents."
State Response
Under a new Texas law, nursing homes in the state must purchase liability insurance by September 2003. Nursing homes that fail to purchase coverage could lose their Medicaid contracts, the Chronicle reports. However, many nursing home operators say that they cannot afford liability insurance, despite the mandate. The state's "insurer of last resort," the Joint Underwriting Association, recently opened to nursing homes, but few facilities have participated. Nursing home operators cite "high prices and inadequate protection," the Chronicle reports (Hopper, Houston Chronicle, 8/11).
