Rejecting patients

Assisted living centers struggle with insurance


— Bob Grub pointed out the numerous edible plants that sprout from the raised gardens behind the assisted living center he and his wife operate.

The peas and squash, onions, herbs and spinach were thriving under the care of the former soil scientist turned elderly caretaker. At one corner of the garden, a rhubarb plant grew in the shade. Grub recalled the rhubarb arrived as a root cutting transplanted from a resident's home.

"We went and dug up some of the rhubarb that she loves," Grub said.

Small assisted living centers, such as Grub's "Rainbow Living Center" and "The Jewel," provide a homey environment and limited care for elderly clients who cannot to live alone but might not need the intensive care provided by nursing homes.

But a spike in the cost of liability insurance is causing the centers to turn away a potentially large portion of their patient population.

The centers must carry $1 million in liability insurance in order to retain the license that allows them to get reimbursed for services they provide to Medicaid patients.

Two years ago, Rainbow was paying $2,500 a year for the insurance, Diane Grub said. Almost overnight, the premiums more than quadrupled.

"The insurance went from $2,500, to ... $16,000 was the first quote we got," she said.

Subsequent quotes came in at about $12,000 -- still too much for the facility to absorb.

For nearly two years, state officials let Rainbow continue to care for the Medicaid patients it housed.

"They wanted to keep us," Diane Grub said. "They tried so hard. We have the only Medicaid license in Moffat County for assisted living."

"From my perspective, they drug their feet as long as they could," Bob Grub said.

On Friday, the Grubs got a call telling them the grace period was over. Residents using Medicaid were scheduled to be notified Wednesday that they would have to move.

The Grubs will have to lay off two employees. Three residents will have to be relocated.

The Grubs hope Craig's new nursing home, the Sandrock Ridge Care and Rehabilitation Center, will open in time to give the residents a local home.

Sharon Salman, who operates a similar facility, The Jewel, lost her Medicaid license for the same reason.

"We did take Medicaid," Salman said, "and we stopped because of the skyrocketing (insurance) fees."

"It's leaving the elderly in a bad situation," Salman said. "Most people don't have the funds to cover private pay."

With no Medicaid reimbursements, the assisted living centers will have to restrict their clients to private-pay customers only.

At times, Medicaid clients made up as much as half of the resident population at Rainbow. The home can care for as many as 10 people.

The Medicaid patients' departures will leave the home with only five residents.

The Grubs had spent years building the center. It began in 1989, operated out of the couple's home. When they outgrew it, they bought a church building next door. Throughout the 1990s, they made additions and improvements, adding two wings and a small apartment.

"It was a case of building the additions and serving what we thought was a need in the community," Bob Grub said.

The home has a gazebo out front, gardens in the back and is outfitted with expensive equipment, including a commercial fire suppression sprinkler system and a bath tub for the disabled that rotates from a vertical to a horizontal position.

The lack of insurance is not a resident-safety issue, Grub said. It's just a protection from lawsuits. Rainbow will continue to operate without it.

Bob Grub admitted it was risky.

"I have to trust the (residents') families," Bob Grub said. "We're assuming the risk."

He said he would be less comfortable taking that risk "if we didn't have the quality people and families who understand this situation."

The skyrocketing insurance costs are caused by several factors, said Dave Schwerin of Moffat Insurance, which writes the kinds of policies Rainbow and Jewel need to carry.

After Sept. 11, 2001, the market began to change, Schwerin said. Large insurance companies consolidated. There was less competition to write policies. Returns on investment dropped. The insurance companies had to take a hard look at their prices, Schwerin said.

"When profitability went by the wayside, companies were not able to make up losses with investment income anymore," Schwerin said.

It affected insurance across the board, but the cost spike was "particularly profound in medical insurance," Schwerin said.

One of the residents the Grubs must send away has lived at the home for 10 years.

"It's going to be hard on him," Diane Grub said.

Jeremy Browning can be reached at 824-7031 or

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