A recent article by the Sentinel about the Department of Insurance's survey of nursing-home insurance completely missed the point. The article suggests that insurers are pulling out of Florida and that this is a Florida-only problem, when, in fact, they are dropping coverage throughout the nation.

The survey revealed that not a single insurer was withdrawing from the Florida market exclusively. In fact, all respondents indicated that, as part of a "national strategy," they were exiting the nursing-home insurance business altogether.

Although this may seem a subtle difference, it has great meaning for policymakers in this state. If insurers were abandoning only the Florida market, state policymakers would need to address this concern at the state level. Instead, this national trend requires a national solution, and we need to examine the reasons from a national perspective.

The question we should address, therefore, is, "Why are insurers pulling out nationwide?"

Insurers are scared away by bad behavior and bad risks. The nursing-home corporations have repeatedly demonstrated themselves to be the worst kind of risk. Let's examine some facts:

• In 1995, the U.S. General Accounting Office reported widespread fraud and endemic corruption among nursing-home chains, citing that the problem was "nationwide and growing in magnitude."
• Recent Securities and Exchange Commission filings continue to document widespread allegations of Medicare fraud, insider trading, false claims and unjust enrichment.
• The GAO has twice (first in 1999 and again just last month) issued reports showing that the rash of bankruptcies was directly related to unacceptable debt caused by reckless expansion and bad business decisions.

In July, the Health Care Financing Administration concluded that more than half the homes in the nation were dangerously understaffed and that this understaffing was directly linked to widespread suffering and the untimely deaths of residents. And, no surprise, these preventable deaths often lead to very serious lawsuits.

If you compound the fraud, corruption and bad business decisions with the crisis in care, it is clear why insurers are pulling out of the market entirely.

Insurers are sending us a clear message: Institutional care for the elderly is a failure. We need to shift away from institutional settings as a primary option and toward community-based care systems that work. We must adequately finance and provide incentives for small adult-family homes, adult day care, adult respite care, custodial-home help and other such proven concepts. These programs have been shown to save taxpayers money and improve care while allowing seniors the opportunity to age with dignity.

If insurers across America are no longer willing to gamble their resources on this failed concept, then why should we?

Jim Wilkes is co-founder of the Tampa-based law firm Wilkes & McHugh, P.A, which represents victims of nursing-home abuse. The firm has offices throughout the Southeast.

 

 

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