The American population has started to change dramatically. When you consider what that means for senior care facilities from an insurance standpoint, it's even more dramatic.

First, some data:

  • Over the next 15 years, 8,000 baby boomers a day will turn 65, according to AARP.
  • By the time that spike ends, more than 20 percent of U.S. residents will be 65 or older, compared with 13 percent in 2010 and less than 10 percent in 1970, according to U.S. News & World Report.
  • The number of seniors in 2012 (43.1 million) will nearly double to 83.7 million by 2050, according to U.S. News & World Report.

The decisions those aging baby boomers are making differ from their parents and grandparents, and that has ramifications. Today's assisted living facilities often treat residents who are 10 or 15 years older than previous generations of residents. And skilled nursing facilities frequently work with people who tend to be sicker and older than residents from years past. These facilities may not be properly staffed and equipped for the rising level of risk.

Consider this data from a recently published report1 that shows what's happened to the cost of professional liability claims from 2008 to 2014:

  • Loss rates per occupied bed have jumped from $1,210 to $1,940.
  • Claim frequency per 100 occupied beds has risen from 0.70 to 0.91.
  • Claim severity has climbed from $172,000 to $214,000.

The report predicts these trends will continue, with loss rates climbing another 5 percent in 2015, claim frequency rising by 3 percent and claim severity increasing by 2 percent.

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