Betty Ondera’s weak heart races when she gets nervous, and now her daughter’s heart is racing, too.
Ondera, who is 83 and has a serious heart condition, is being told to leave her Scottsdale assisted living home.
"We don’t want to move her," said Jean Ipema, Ondera’s daughter. "We don’t think she’d be able to handle it. It creates a lot of anxiety."
But Ipema may have no choice. Ondera is one of more than 30 frail seniors in Maricopa County who have been notified by their Medicaid case managers to move to another adult-care home because their current residence does not have required liability insurance. As policies expire, the number of uprooted seniors grows.
The problem began when New Jersey-based Western World Insurance Group, a predominant insurer of assisted living and adult-care homes in the county, stopped writing and renewing their liability insurance policies last spring. Home operators have been scrambling to get new policies, but have found limited options and skyrocketing rates.
"I called so many insurance companies, it’s ridiculous," said Bruce Seitelman, who owns five assisted living homes in Chandler, Tempe and Scottsdale. "Nobody’s able to get this insurance. Something has to be done."
In the meantime, the three companies the state Medicaid program contracts with for long-term care services for low-income seniors — Maricopa Integrated Health System, Evercare Select and Mercy Care Plan — are notifying assisted living and adult foster care home residents that they will have to be moved to homes with insurance.
Since September, lapsed insurance policies have forced Medicaid contractors to terminate contracts with 50 assisted living and adult foster care homes that provide statefunded care to low-income seniors, said John Black, compliance coordinator for the state’s Medicaid program for seniors, the Arizona Long Term Care System. There are about 200 adult foster care and 300 assisted living homes in the county that contract with the system.
Of the 50 canceled contracts, half were with uninsured assisted living homes that did not have any ALTCS residents at the time. The other half, however, were forced to move 31 seniors to other assisted living facilities and adult foster care homes with insurance.
"The fact that we are having to move 31 frail, at-risk, elderly, disabled folks is risky," Black said. "We have not heard of any problems, but that’s always a possibility. Nobody likes to move elderly folks."
With fewer contracted homes, families will have fewer options for care of their frail loved ones, authorities said.
"Right now we’re really at a crisis because nobody’s offering the right kind of insurance," said Shari Zint, adult foster care director for the Foundation for Senior Living, which administers the Maricopa Integrated Health System contract. "It basically squeezes out the smaller providers, the mom-and-pop homes."
Adult foster care homes, which are for Medicaid-only patients, are limited to four residents and assisted living homes can have no more than 10. The state pays the homes $40 to $60 a day for each ALTCS member.
The small size of the homes and their limited incomes make rate hikes of as much as 200 percent impossible to pay, Zint said. It’s a hardship that threatens to eliminate the individual care offered by a small-home setting.
"It is important that we make sure all the options are available to older folks," said Barry Gold, executive director of the Governor’s Advisory Council on Aging, which has been meeting with stakeholders about the insurance difficulties. "I’m not exactly sure what the solutions are."
WHY THE CRISIS?
The reasons for vanishing insurance options are complex, according to independent insurance agents. The economic downturn is likely one factor because it took away the cushion of investments, forcing insurers to rely on premium dollars, said Jim Mann, president of Horizon Insurance Group in Phoenix. Also, insurers have difficulties making the numbers work for adult foster care homes, which carry liability risks but are limited by a fixed income from the state, he said.
But one of the biggest factors affecting insurance rates and availability are lawsuits, agents say. They say Western World left Arizona’s senior home care market out of fears over litigation. At least one lawsuit was filed in Maricopa County Superior Court last year against an assisted living home the company insured, according to court records, and agents said company officials feared more would be on their way.
Western World officials declined comment for this story.
"They (insurers) are getting hit with so many lawsuits, they can’t afford to stay in business," said Jacquelyn Phillips, an independent insurance agent in Phoenix who writes policies mainly for adult foster care homes. "The foster care program is just about being eliminated as far as insurance goes. I don’t know who can write them."
Senior home care operators blame their higher insurance risk on law firms that advertise in late-night television commercials, on billboards and on buses, encouraging people to call them if they suspect nursing home abuse. They also blame the state’s vulnerable adult legislation, which they say makes lawsuits against senior care providers easier to file.
"One mistake can have you sued for millions," said Karen Barno, president of the Arizona Assisted Living Federation of America, which is supporting a bill this legislative session that would change the "vulnerable adult" law. The bill, HB2439, changes the definition of elder abuse to include gross negligence. The bill also limits punitive damages to levels awarded in other civil actions and prevents attorney’s fees from exceeding damages awarded in a case.
"We’re not reducing or taking anything away from consumer protection," Barno said. "We just want to be in line with other tort in the state."
Critics worry, however, that the bill will chip away at protections for frail seniors.
"The fear on the aging network’s side is it waters down the response to people who abuse you," Zint said.
The proposed legislation is a bad idea, especially since the problem lies in the profit motives of the insurance industry not litigation, said Jon Hinz, director of the Fairness and Accountability in Insurance Reform, which is funded by the Arizona Trial Lawyers Association.
"This is taking away rights of individuals. Is that what we want to do?" he said.
WHAT TO DO?
Alan Schafer, ALTCS manager, said he and others involved in the insurance issue are looking into ways to develop a self-insurance pool, which senior home care providers would pay into for liability coverage.
Today, there are about four private companies writing liability insurance for senior care homes, said Phillips. But some have rates that start at $4,000 a year, compared with about $1,800 charged by Western World last year, she said.
Zint said many adult foster care homes were able to find relatively affordable insurance at the last minute through State Farm. But when those policies lapse, there’s no guarantee the homes will find insurance to stay in business, she said.
"I won’t have residents if I don’t have insurance," said Marilou Biano, who stopped taking residents until she obtained insurance for her adult foster care home in Mesa. "You get scared."
Home operators are also encountering more restrictions on insurance.
Policies have been denied for having Alzheimer’s patients, residents who are bedridden or in wheelchairs, or in Seitelman’s case, because there were children living in one of his assisted living homes, he said.
Seitelman has been trying to find affordable insurance since last April. "It’s a nightmare," he said.
Unlike adult foster care homes, which must carry liability insurance, assisted living homes do not have an insurance requirement unless they have ALTCS residents.
As a result, many assisted living homes are giving up ALTCS members and limiting their business to privatepaying residents rather than bearing the brunt of high-cost insurance premiums, Black said.
For Lina Alba, managing director of the home where Betty Ondera received her notice to leave, moving a resident because of insurance problems is upsetting. Alba is still trying to get insurance for the assisted living homes she and her husband operate.
"It’s a terrible thing to do, but we can’t do anything. Our hands are tied," she said. "We don’t know what to do anymore."