Liability insurance creates barrier for youth mental health services

JACKSON — Lack of insurance coverage is placing Teton Youth and Family Services and organizations like it at risk of losing staff or even closing doors.

Insurance policies are being canceled or rates are drastically increasing because of the high-risk youth and mental health treatment services the providers take on.

Former Teton County Rep. Andy Schwartz, now a lobbyist, was among the experts who presented the problem to the Wyoming Legislature's Mental Health and Vulnerable Adults Task Force. He represents the Wyoming Youth Services Association, which is a collaboration of 18 nonprofit organizations and providers, including Teton Youth and Family Services.

"Most of the state's highest-need youth rely on WYSA member agencies for support," the WYSA report to the task force stated. "However, insurance is just one of the many factors that can hinder an agency's ability to serve high-needs youth. If an agency becomes uninsurable, it jeopardizes its ability to serve any youth. Even if insurance remains attainable but with dramatically increased premiums, agencies may be forced to make difficult decisions like cutting staff to afford insurance."

The Mental Health and Vulnerable Adults Task Force heard the concerns as they prepare to work on legislation and coordinate with state agencies during the interim. The first meeting of 2024 was on Friday in Cheyenne, and the task force forged a path for its next three meetings. Some of its goals before the next legislative session include developing policy that will address challenges in the delivery of mental health services, identifying vulnerable adults' programming and service gaps, and reviewing the Department of Family Services' confidentiality statutes.

Friday's meeting also focused on securing mental health services for children, whether that be in crisis centers, residential treatment facilities and group homes, or getting resources from K-12 districts.

Already, there are between 10 and 20 children with high behavioral needs meandering through the state system without access to long-term care, according to the Wyoming Department of Health. The emergency and short-term basis response often places them in jails, detention centers and hospital emergency rooms, instead of appropriate facilities because of factors like lack of liability insurance coverage.

"Insurance might be very difficult to obtain on some of these highest-need children because of behavioral issues, violence, facility damage and general liability in the malpractice space," said WDH Director Stefan Johansson. "Potentially one legal action or lawsuit could really pose a financial catastrophe or a problem facility-wide or provider-wide in some of these cases."

A survey done by the Wyoming Youth Services Association painted the picture for lawmakers. Residential treatment providers saw premiums for liability insurance surge by more than 69% in the past three years, totaling $405,964. This doesn't include spikes in property and vehicle insurance. Three residential treatment agencies surveyed by the youth association have all experienced cancellations of their Professional, General Liability or Property Insurance coverages within the last five years. Two crisis shelters and group homes have had their insurance coverage terminated in recent years.

Three primary reasons treatment facilities and shelters had their insurance canceled were because of claims; insurance carriers withdrawing from the state or ceasing insuring residential programs; or renewal applications requiring providers to disclose any investigations after critical incidents involving youth.

In other cases, it was simply because of the kinds of services provided.

"In a recent cancellation case, an organization with a bundled insurance plan faced termination. The notice cited that their operations, including youth alternative to detention, court-ordered placement, and youth residential therapeutic services, fell outside the insurer's scope," according to the report.

Another example was in Teton County.

"I know our local provider in Teton county does wilderness activities, and the insurance companies are not very happy about that," Schwartz said. "They just see it as an added high risk with these kids when they are out in the wilderness for two weeks at a time."

The task force was asked by stakeholders to dig deeper into the issue over the interim and it's just the start. But some of the options on the table are "exploring strategies for limiting or sharing liability, as well as leveraging resources to mitigate the escalating risk of insurance loss or premium hikes."

There was also a call to enhance the insurance marketplace in Wyoming.