A four percent annual increase in the average claim size is responsible for the growth of long-term care liability costs, according to a study on 2011 long-term general and professional liability actuarial analysis by the Aon Corporation and the American Health Care Association.

Nationwide, the severity of liability claims increased steadily from $125,000 in 2005 to $153,000 in 2010. In 2011, claims severity is projected to reach $159,000. In addition, the average annual loss rate per bed, which has hovered around $1,400 for the past five years, is projected to be $1,430 in 2011. Likewise, since 2005, the loss cost as a percentage of the Medicaid per diem reimbursement rate has been near its 2010 level of 2.22 percent.

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