Talking point: rising insurance premiums another weight on sustainability for aged care providers

Every day, first thing, we spend 30 minutes discussing what is going on in the aged care space. This week, we are hearing about huge increases in insurance premiums, which come straight off providers' bottom line, compounding already concerning sustainability pressures.  Yvonne Timson, CEO of WA Not For Profit home care and disability support provider Community Vision Australia, told The SOURCE their workers' compensation insurance premiums have risen 46% this year, making the increase 134% over the last two years. 

Insurance is now costing the organisation more than $500,000 per annum, with no ability to pass on the additional costs due to caps on administration fees. "To a business of our size with an inability to increase any administration fees, the question of sustainability has to be asked," Yvonne said. Their organisation will have to be "working incredibly lean", putting "pressure on what is already a very pressurised, understaffed, under resourced workforce because of the [workforce] shortages, especially in WA."

She attributes the premium increases to Australia's greater number of natural disasters, COVID-19-related claims, and cyber liability claims. David Reece, CEO of VIC Not For Profit retirement living and aged care provider AdventCare, told The SOURCE its WorkCover premiums have risen 42% on last year, a $350,000 increase which comes "straight off our bottom line". They "hit everyone", David said. These premiums may also rise further. The Victorian Government is currently trying to push through legislation that will limit mental health claims, which, if not amended, could contribute to even higher WorkCover premiums. "If this legislation doesn't get through and it keeps unchecked, we could be facing another three, four, $500,000 a year in extra money. When aged care is at risk of viability, we've just lost 350 grand," David said.