A recent editorial by the Tribune regarding the Department of Insurance’s survey of nursing home insurance missed an important point pertaining to the departure of these companies. The issue is not as complex as you suggest.

The debate thus far has centered on whether or not Florida’s laws were driving insurers from the Florida market. The survey answered with a resounding “NO”. Their 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. If Florida’s law were somehow causing the problem, then certainly the report would have found at least one company exiting Florida only, instead the report showed a nationwide exodus.

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

To put it quite simply, 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.

• In 1995, the U.S. General Accounting Office (GAO) reported widespread fraud and endemic corruption among nursing homes chains, and noted that the problem was “nationwide and growing in magnitude.”
• Recent SEC 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 this understaffing was directly linked to widespread suffering and the untimely deaths of residents. (By the way, Florida leads the nation in short staffing deficiencies.) 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 towards community based care systems that work. We must pull Florida out of the basement when it comes to funding 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 a lawyer and represents victims of nursing home abuse

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