Increasing costs for business property insurance in Florida have contributed to the closure of hundreds of nursing facilities in the last five years, according to data statistics from the state's Agency for Health Care Administration.
Florida Saw Average Closure of 146 Nursing Facilities Annually for Over Five Years
Reportedly, there was an average annual closure of 146 nursing homes or assisted-living facilities in Florida over the five-year period ending in 2023. Over the same five-year span, Florida had a 125% increase in commercial property insurance rates.
Annual rates in the state increased by almost 27% in the last year.
According to nursing home owners who spoke with Bloomberg, the cost of elder care is rising rapidly, and those facilities that have not yet closed their doors are finding it more difficult to fulfill their debt payments. Municipal Market Analytics found that most first-time payment failures on loans granted to Florida retirement communities since 2009 occurred after the pandemic.
Florida's default rate for senior housing is 18%, while the national average is only about 8%.
Increased Insurance Premiums Affecting Assisted-Living Facilities in Florida
Innovation Senior Living in Winter Park runs middle-market senior living communities in Florida, with 339 residents in its network of facilities. Founder and CEO Pilar Carvajal said insurance premiums have increased by at least 50% within the last five years.
Increases in insurance premiums have been attributed to factors such as the storms that have impacted Florida and the scarcity of available workers.
After Hurricane Ian hit the state in September 2022, Carvajal claimed her insurance forced her to construct a $200,000 roof on one of her six sites to preserve coverage.
Palm Garden Healthcare is another provider of care and rehabilitation in Florida. CEO Rob Greene had to shut down one of his facilities earlier this year after his property insurance premium rose to $2.2 million in only two years.
Florida nursing facilities are closing while its population grows. Experts say Florida must develop additional nursing homes via government subsidies or other governmental engagement due to population expansion, according to the New York Post.
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