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Senior Care | Bigger Market, Bigger Concerns

Senior care risk management is becoming increasingly complex. Our growing elderly population has created a greater demand for in-home care and assisted living facilities. As this demographic grows and becomes more diverse, so do the risks and challenges facing senior care providers. To remain successful, care providers must assess current and emerging trends, and understand the challenges that insurance companies must solve in this evolving industry.

Supply and Demand vs. Senior Care Risk Management
Senior care risk management will be significantly affected by baby boomers. The last baby boomers will reach age 65 in 2029. With nearly 60 million people, this group will represent more than 20% of the total U.S. population. About 70% of that 65-and-older population (many with cognitive disorders) will require some form of long-term care.¹senior care

According to a report titled, “Getting to 2025: A Senior Living Roadmap,” the number of senior living communities in the U.S. increased by 39% between 2001 and 2014.² During that same period, the 85-and-older population grew by 43%, a fairly proportionate increase based on supply and demand. The report predicts that there will be 29,700 senior living establishments by 2025 – a 21% increase from 2014.

This greater demand is also ushering in a preference for alternative care models – such as in-home care. More people are opting to age in their homes, which is prompting many caregivers to offer in-home services. Expanding and modifying services can have a serious impact on a provider’s risk profile. As the industry grows and caters to new preferences, providers must adjust their senior care risk management practices accordingly.

Additional Risk Management Challenges
Historically, insurance capacity for senior care providers has been plentiful and affordable. This has allowed businesses to operate profitably, but this trend may not last. We are seeing a less predictable market with the greater demand for care. Senior care risk management can be further complicated by things such as:

  • Ongoing repeal and replace efforts for the Affordable Care Act (ACA)
  • Changing guidelines issued by the Centers for Medicare and Medicaid Services (CMS)
  • Declining federal reimbursement from Medicare and Medicaid (Reimbursement levels aren’t trending up, but the expenses of running these facilities are.)

Increased liability and workers’ compensation costs could also put a strain on the insurance market. Current projections point to higher liability costs for long-term care professionals. The overall insurance loss ratio is predicted to increase by 6%, which is a strong year-over-year growth. Skilled nursing care centers are also predicted to have an increased loss rate of $2,450 per occupied bed during 2018.³ These numbers could mean higher premiums and fewer insurance alternatives.

Finding and keeping quality employees is another challenge in this industry. Poor staffing is often to blame for injuries and other claims against senior care providers, so investing in talented staff is a vital part of any senior care risk management plan. With the industry’s expected growth and cuts to federal reimbursement, it will become even more important to minimize turnover and recruit dependable talent.

Work with an Expert
When developing a senior care risk management plan, it’s important to work with industry specialists who understand the specific challenges faced by these providers. At SilverStone Group, we have trained professionals who are dedicated to serving this specific niche. We help clients understand their total cost of risk and provide solutions to address their needs now and into the future. A thoughtful risk management strategy can help you remain a trusted and reliable source of senior care, and nothing is more important than that.

¹ Wells, Andrea. “The Senior Care Market Still Going Strong.” November 20, 2017. Insurance Journal. Accessed on January 23, 2018 at
² “Getting to 2025: A Roadmap for the Senior Living Industry.” April 2016. Argentum. Accessed on January 29, 2017 at
³ “Aon/AHCA 2017 Long Term Care General Liability and Professional Liability Actuarial Analysis.” Aon website. Accessed on January 25, 2018 at

This article originally appeared in the 2018 | ISSUE ONE of the SilverLink magazine, under the title “Senior Care Risk Management | Bigger Market, Bigger Concerns.” To receive a complimentary subscription to the SilverLink magazine, sign up here.

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